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Notes to Accounts of Intellect Design Arena Ltd.

Mar 31, 2026

(p) Provisions and contingencies

A provision is recognised when an enterprise has a present obligation (legal or
constructive) as a result of past event; 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 of the amount of obligation. Provisions are determined based on best
estimate required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to reflect the current best
estimates. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost.

A contingent liability is a possible obligation that arises from past events whose
existence will be confirmed by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the Company or a present obligation
that is not recognised because it is not probable that an outflow of resources will
be required to settle the obligation. The Company does not recognise a contingent
liability but discloses its existence in the financial statements.

(q) Earnings per share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the
period attributable to equity shareholders by the weighted average number of
equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period and
for all periods presented is adjusted for events, such as rights issue, bonus shares,
treasury shares, other than the conversion of potential equity shares that have
changed the number of equity shares outstanding, without a corresponding
change in resources. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period is adjusted for
the effects of all dilutive potential equity shares.

(r) Share based payment (Employee Stock Option Scheme)

Stock options are granted to the employees under the stock option scheme, the
costs of stock options granted to the employees (equity-settled awards) of the
Company are measured at the fair value of the equity instruments granted. For
each stock option, the measurement of fair value is performed on the grant date.
The grant date is the date on which the Company and the employees agree to the
stock option scheme. The fair value so determined is revised only if the stock
option scheme is modified in a manner that is beneficial to the employees.

That cost is recognised, together with a corresponding increase in share-based
payment (SBP) reserves/stock options outstanding account in equity, over
the period in which the performance and/or service conditions are fulfilled in
employee benefits expense. The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Company''s best estimate of the
number of equity instruments that will ultimately vest. The Statement of Profit and
Loss expense or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period and is recognised
in employee benefits expense.

Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Company''s best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other conditions
attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate expensing of an award unless
there are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately vest because nonÂ¬
market performance and/or service conditions have not been met. Where awards
include a market or non-vesting condition, the transactions are treated as vested

irrespective of whether the market or non-vesting condition is satisfied, provided
that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense
recognised is the grant date fair value of the unmodified award, provided the
original vesting terms of the award are met. An additional expense, measured as
at the date of modification, is recognised for any modification that increases the
total fair value of the share-based payment transaction, or is otherwise beneficial
to the employee. Where an award is cancelled by the entity or by the counterparty,
any remaining element of the fair value of the award is expensed immediately
through profit or loss.

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

If the options vests in instalments (i.e. the options vest pro rata over the service
period), then each instalment is treated as a separate share option grant because
each instalment has a different vesting period.

(s) Treasury shares

The Company has an Associates Benefit Trust, having Company''s shares, for
providing benefits to its employees. The Company treats Trust as its extension and
shares held by Trust are treated as treasury shares. Own equity instruments
(treasury shares) are recognised at cost and deducted from equity. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or cancellation of the
Company''s own equity instruments. Any difference between the carrying amount
and the consideration, on sale, is recognised in equity.

(t) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one
entity and a financial liability or equity instrument of another entity.

A. Financial assets

i. Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial
assets not recorded at fair value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.

ii. Subsequent measurement

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

a. Debt instruments at amortised cost.

b. Debt instrument at fair value through profit or loss (FVTPL).

c. Equity instruments at fair value through profit or loss (FVTPL).

Debt instruments at amortised cost

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

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

â¢ Contractual terms of the asset give rise on specified dates to cash flows that
are solely payments of principal and interest (SPPI) on the principal amount
outstanding.

After initial measurement, such financial assets are subsequently measured at
amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the profit or loss. The losses arising from impairment are
recognised in the profit or loss.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does
not meet the criteria for categorisation as at amortised cost or as FVTOCI, is
classified as at FVTPL.

In addition, the Company may elect to classify a debt instrument, which otherwise
meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is
allowed only if doing so reduces or eliminates a measurement or recognition
inconsistency (referred to as ''accounting mismatch'').

Debt instruments included within the FVTPL category are measured at fair value
with all changes recognised in the profit or loss.

Equity instruments at FVTPL

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity
instruments which are held for trading are classified as at FVTPL. For all other
equity instruments, the Company decides to classify the same either as at FVTOCI
or FVTPL. The Company makes such election on an instrument-by-instrument
basis. The classification is made on initial recognition and is irrevocable.

Equity instruments included within the FVTPL category are measured at fair value
with all changes recognised in the profit or loss.

iii. De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a
Company of similar financial assets) is primarily when:

â¢ The rights to receive cash flows from the asset have expired, or

â¢ The Company has transferred its rights to receive cash flows from the asset
or has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a ''pass-through'' arrangement; and either
(a) the Company has transferred substantially all the risks and rewards of the
asset, or (b) the Company has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the asset.

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

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

iv. Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL)
model for measurement and recognition of impairment loss on the following
financial assets and credit risk exposure:

^â¢ Financial assets that are debt instruments, and are measured at amortised
cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

The Company follows ''simplified approach'' for recognition of impairment loss
allowance on Trade receivables and Revenues accrued and not billed.

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

Lifetime ECL are the expected credit losses resulting from all possible default
events over the expected life of a financial instrument. ECL is the difference
between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive, discounted
at the original EIR. When estimating the cash flows, an entity is required to
consider:

â¢ All contractual terms of the financial instrument (including prepayment,
extension) over the expected life of the financial instrument. However, in rare
cases when the expected life of the financial instrument cannot be estimated
reliably, then the entity is required to use the remaining contractual term of
the financial instrument; and

^â¢ Cash flows from the sale of collateral held or other credit enhancements that
are integral to the contractual terms.

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

ECL impairment loss allowance (or reversal) recognised during the period is
recognised as income/ expense in the statement of profit and loss (P&L). This
amount is reflected under the head ''other expenses'' in the Statement of Profit and
Loss. The balance sheet presentation for various financial instruments is described
below:

Financial assets measured as at amortised cost: ECL is presented as an allowance,
i.e., as an integral part of the measurement of those assets in the balance sheet.
The allowance reduces the net carrying amount. Until the asset meets write-off
criteria, the company does not reduce impairment allowance from the gross
carrying amount.

For assessing increase in credit risk and impairment loss, the Company combines
financial instruments on the basis of shared credit risk characteristics with the
objective of facilitating an analysis that is designed to enable significant increases
in credit risk to be identified on a timely basis.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on
initial recognition. After initial recognition, no reclassification is made for financial
assets which are equity instruments and financial liabilities. For financial assets
which are debt instruments, a reclassification is made only if there is a change
in the business model for managing those assets. Changes to the business model
are expected to be infrequent. The Company''s senior management determines
change in the business model as a result of external or internal changes which
are significant to the Company''s operations. Such changes are evident to external
parties. A change in the business model occurs when the Company either begins
or ceases to perform an activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification prospectively from
the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Company does not restate any
previously recognised gains, losses (including impairment gains or losses) or
interest.

B. Financial liabilities

i. Initial recognition and measurement

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

The Company''s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts and derivative financial instruments.

ii. Subsequent measurement

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

After initial recognition, trade and other payables are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised as well as through the EIR amortisation
process.

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

De-recognition of financial liabilities

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

C. Derivative financial instruments and hedge accounting

The Company uses forward contracts to hedge its risks associated with foreign
currency fluctuations relating to firm commitment or highly probable forecast
transactions. The Company uses hedging instruments that are governed by the risk
management policy which is approved by the board of directors. The policy
provides written principles on the use of such derivative financial instruments. The
Company designates such instruments as hedges and performs assessment of
hedge effectiveness based on consideration of terms of the hedging instrument,
the economic relationship between the hedging instrument and hedged item and
the objective of the hedging. The Company does not use derivative financial
instruments for speculative purposes.

Derivatives are initially recognised at fair value on the date a derivative contract is
entered into and are subsequently re-measured to their fair value at the end of
each reporting period. The accounting for subsequent changes in fair value
depends on whether the derivative is designated as a hedging instrument, and if
so, the nature of item being hedged and type of hedge relationship designated.

For the purpose of hedge accounting, hedges are classified as Cash flow hedges
when hedging the exposure to variability in cash flows that is either attributable to
a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction or the foreign currency risk in an unrecognised firm
commitment.

If the hedging instrument expires or is sold, terminated or exercised without
replacement or rollover (as part of the hedging strategy), or if its designation
as a hedge is revoked, or when the hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss previously recognised in OCI remains
separately in equity until the forecast transaction occurs or the foreign currency
firm commitment is met.

At the inception of a hedge relationship, the Company formally designates and
documents the hedge relationship to which the Company wishes to apply hedge

accounting and the risk management objective and strategy for undertaking the
hedge. The documentation includes the Company''s risk management objective
and strategy for undertaking hedge, the hedging/ economic relationship, the
hedged item or transaction, the nature of the risk being hedged, hedge ratio and
how the entity will assess the effectiveness of changes in the hedging instrument''s
fair value in offsetting the exposure to changes in the hedged item''s fair value or
cash flows attributable to the hedged risk.

Such hedges are expected to be highly effective in achieving offsetting changes in
fair value or cash flows and are assessed on an ongoing basis to determine that
they have been highly effective throughout the financial reporting periods for
which they were designated.

Cash flow hedges

The Company designates forward contracts as hedging instruments to mitigate
foreign currency risk exposure in relation to forecast transactions and firm
commitments.

When a derivative is designated as a cash flow hedge instrument, the effective
portion of changes in the fair value of the derivative is recognised in other
comprehensive income (OCI) and accumulated in the cash flow hedge reserve. Any
ineffective portion of changes in the fair value of the derivative is recognised
immediately in the net profit in the Statement of Profit and Loss. If the hedging
instrument no longer meets the criteria for hedge accounting, then hedge
accounting is discontinued prospectively. If the hedging instrument expires or is
sold, terminated or exercised, the cumulative gain or loss on the hedging
instrument recognised in cash flow hedge reserve till the period the hedge was
effective remains in cash flow hedge reserve until the forecasted transaction
occurs or the foreign currency firm commitment is met. The cumulative gain or loss
previously recognised in the cash flow hedge reserve is transferred to the net profit
in the Statement of Profit and Loss upon the occurrence of the related forecasted
transaction. If the forecasted transaction is no longer expected to occur, then the
amount accumulated in cash flow hedge reserve is reclassified to net profit in the
Statement of Profit and Loss.

Amounts recognised as OCI are transferred to profit or loss when the hedged
transaction affects profit or loss, such as when the hedged financial income or
financial expense is recognised or when a forecast sale occurs. When the hedged
item is the cost of a non-financial asset or non-financial liability, the amounts
recognised as OCI are transferred to the initial carrying amount of the non-financial
asset or liability.

Offsetting of financial instruments

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

(u) Segment reporting

Ind AS 108, Operating segments, establishes standards for the way that public
business enterprises report information about operating segments and related
disclosures about products and services, geographic areas, and major customers.
The business of the Company falls under a single primary segment i.e. ''Software
Product License & related services'' based on âManagement approach" as defined
in Ind AS 108 - Operating Segments. The Chief Operating Decision Maker monitors
the operating results of its business as a single primary segment for the purpose of
making decisions about resource allocation and performance assessment.

(v) Changes in accounting policies and disclosures

The Ministry of corporate Affairs ("MCA") notified amendments on 7 May 2025

and 13 August 2025 under the Companies (Indian Accounting Standards)
Amendment Rules, 2025 and the Companies (Indian Accounting Standards) Second
Amendment Rules, 2025, respectively, which is effective from annual reporting
periods beginning on or after 1 April 2025.

(a) Amendment to Ind AS 7 and Ind AS 107 - Supplier Finance Arrangement:

The amendments to Ind AS 7 ''Statement of Cash Flows'' and Ind AS 107 ''Financial
Instruments:

Disclosures'' clarify the characteristics of supplier finance arrangements and require
additional disclosures for such arrangements. The disclosure requirements in the
amendments are intended to assist users of financial statements in understanding
the effects of supplier finance arrangements on an entity''s liabilities, cash flows
and exposure to liquidity risk.

The Company does not have any supplier finance arrangements during the
reporting period.

(b) Amendment to Ind AS 1 - Classification of liabilities as current or non-current
and non-current liabilities with covenants:

The amendment specifies the requirements for classifying liabilities as current or
non-current in the balance sheet, and clarifies the following:

a) An entity''s right to defer settlement of a liability for at least twelve months
after the reporting period must have substance and must exist at the end of
the reporting period. The classification of a liability as current or non-current
is unaffected by the likelihood that the entity will exercise its right to defer
settlement.

b) If an entity''s right to defer settlement of a liability is subject to covenants,
such covenants affect whether that right exists at the end of the reporting
period only if the entity is required to comply with the covenant on or before
the end of the reporting period.

c) In case of a liability that can be settled, at the option of the counterparty, by
the transfer of the entity''s own equity instruments, such settlement terms do
not affect the classification of the liability as current or non-current only if the
option is classified as an equity instrument.

These amendments have no effect on the measurement of any items in the
standalone financial statements of the Company. The Company did not make
retrospective adjustments as a result of adopting the amendments to Ind AS 1.

c) Amendment to Ind AS 12 - Pillar-Two Tax Reforms

The Company is not within the scope of the OECD Pillar Two Model Rules, as Pillar
Two legislation has not yet been enacted in any of the jurisdiction in which the
Company operates. The amendments provide a temporary mandatory relief from
deferred tax accounting for top-up tax and disclose that they have applied the
relief. This relief is immediate and applies retrospectively

d) Amendment to Ind AS 21-Lack of exchangeability

The Amendments introduces requirement to assess when a currency is
exchangeable into another currency and when it is not. The amendment requires
an entity to estimate the spot exchange rate when it concludes that a currency is
not exchangeable into another currency. These amendments had no effect on the
standalone financial statements of the Company.

The below amendments are notified but not yet effective

Amendment to Ind AS 1 ''Presentation of Financial Statements''- Classification of
Liabilities as current or non-current and non-current liabilities with covenants:

The amendment includes specific provisions that will take effect for reporting
periods beginning on or after 1 April 2026, retrospectively, as outlined below:

a) Breach of material covenant for long-term loan arrangement on or before end
of reporting period with effect that liability becomes payable on demand as
on reporting date, then it shall be classified as current liability, if lender
agreed after reporting period and before approval of financial statements to
not demand payment as a consequence of breach.

b) Classify as non-current liability, if lender agreed by end of reporting period to
provide grace period ending at least 12 months after reporting period within
which entity can rectify the breach provided lender does not demand
immediate repayment.

c) Disclose information about the timing of settlement to understand the impact
of the liability on the financial statements.

The Company does not expect this amendment to have an impact on its operations
or standalone financial statements.

Performance obligations and remaining performance obligations

Information on Company''s performance obligations and remaining performance
obligations is summarised in accounting policies (also Refer note 3(k)).

The aggregate value of performance obligations that are completely or partially
unsatisfied as at March 31, 2026, other than those meeting the exclusion criteria
mentioned in Note 3(k) is Rs.1,241.80 million (March 31, 2025 - Rs.1,596.03 million).
Out of this, the Company expects to recognise revenue of around 93% (March 31, 2025
- 98%) within the next one year and the remaining thereafter. This includes contracts
that can be terminated for convenience without a substantive penalty however, based
on current assessment, the occurrence of the same is expected to be remote.

One customer accounted for more than 10% of the revenue amounting to Rs. 950.45
million for the year ended March 31, 2026 (No customer accounted for more than 10%
of the revenue for the year ended March 31, 2025).

27 EARNINGS PER SHARE

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

Options granted to employees under employees option plan has been considered to
be potential equity shares. They are included in determination of diluted EPS to extent
of which they are dilutive. Details relating to ESOP are set out in Note 30
Diluted EPS amounts are calculated by dividing the profit attributable to equity
shareholders by the weighted average number of equity shares outstanding during the
year plus the weighted average number of equity shares that would be issued on
conversion of all the dilutive potential equity shares into equity shares.

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

28 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

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

a. Judgements

In the process of applying the Company''s accounting policies, management has not
made any judgements, which have significant effect on the amounts recognised in the
standalone financial Statements.

b. Estimates and assumptions

Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising that are beyond the control of
the Company. Such changes are reflected in the assumptions when they occur.

1) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs of disposal and
its value in use. The fair value less costs of disposal calculation is based on projected
sales transactions, conducted at arm''s length, for similar assets or observable market
prices less incremental costs for disposing of the asset. The value in use calculation is
based on a DCF model. The cash flows are derived from the budget for the next five
years and do not include restructuring activities that the Company is not yet committed
to or significant future investments that will enhance the asset''s performance of the
CGU being tested. The recoverable amount is sensitive to the discount rate used for
the DCF model as well as the expected future cash-inflows and the growth rate used
for extrapolation purposes.

The Company capitalises intangible asset under development for a project in
accordance with the accounting policy. Initial capitalisation of costs is based on
management''s judgement that technological and economic feasibility is confirmed,
usually when a product development project has reached a defined milestone
according to an established project management model. In determining the amounts
to be capitalised, management makes assumptions regarding the expected future cash
generation of the project, discount rates to be applied and the expected period of
benefits.

2) Share-based payments

The Company initially measures the cost of Equity-settled transactions with employees
using a Black Scholes model to determine the fair value of the liability incurred.
Estimating fair value for share-based payment transactions requires determination of
the most appropriate valuation model, which is dependent on the terms and
conditions of the grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected life of the share
option, volatility and dividend yield and making assumptions about them. The
assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 30.

3) Revenue from contract with customers

The Company is required to make an assessment for each new software license
contract as to whether the underlying software requires significant modification or
customisation by the Company in order to meet the customer''s requirements. If
significant modification or customisation is required, then the license fee is recognised
based on percentage-of-completion. Majority of such modifications or customisations
have not been deemed significant in current or prior periods.

In respect of service revenue, the management exercises judgment in determining the
percentage of completion utilising output measures, such as the achievement of any
project milestones stipulated in the contract, or internal quality milestones to assess
proportional performance.

The Company also exercises judgment in assessing uncertainties surrounding the
probability of collection when payment terms are linked to service implementation
milestones or other various contingencies exist. These assessments are made at the
outset of the contract.

4) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and
the present value of the gratuity obligation are determined using actuarial valuation.
An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate,
future salary increases and mortality rates. Due to the complexities involved in the
valuation and its long-term nature, a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the
appropriate discount rate for plans operated in India, the management considers the
interest rates of government bonds in currencies consistent with the currencies of the
post-employment benefit obligation. The underlying bonds are further reviewed for
quality.

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

Further details about gratuity obligations and sensitivity analysis are given in Note 29.

5) Taxes

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

6) Provision for allowance of credit Loss

The Company has adopted and laid out its Expected Credit Loss Model (ECL) for
determination of the Provision for credit loss allowance, which are primarily in the
nature of Trade receivables and Revenue accrued and not billed. In determining its ECL,
assumptions and estimates are made in relation to nature of customers (Private Banks,
Public Sector Banks, Non-Banking Companies etc.), billing and collection terms as per
the contract, average ageing of the customer balance and the past trends of collection.

7) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance
Sheet cannot be measured based on quoted prices in active markets, their fair value is
measured using valuation techniques including the DCF model. The inputs to these
models are taken from observable markets where possible, but where this is not
feasible, a degree of judgement is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the reported fair value of financial
instruments. Also Refer to Note 34 and Note 38 for further disclosures.

8) Leases

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

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

The Company applies judgement in evaluating whether it is reasonably certain whether
or not to exercise the option to renew or terminate the lease. That is, it considers all
relevant factors that create an economic incentive for it to exercise either the renewal
or termination.

The Company cannot readily determine the interest rate implicit in the lease,
therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The
IBR is the rate of interest that the Company would have to pay to borrow.

Refer note 37 for information on potential future rental payments relating to periods
following the exercise date of extension and termination options that are not included
in the lease term.

29 GRATUITY

The Company has a defined benefit gratuity plan for employees in India. The Gratuity
plan provides for a lump sum payment to vested employees at retirement, death while
in employment or on termination of employment. Vesting occurs upon completion of
contractual period of continuous years of service as defined in the Code on Social
Security, 2020. A trust by name âIntellect Design Group Gratuity Trust" has been
constituted by Intellect Design Arena Limited to administer the gratuity fund. Trustees
administer contributions made to the trust.

The details of the defined benefit gratuity plan and the amounts recognised in
the standalone financial statements as at March 31, 2026 and March 31, 2025 are as
follows:

30 SHARE BASED PAYMENTS (EMPLOYEE STOCK OPTION SCHEME)

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris
Consulting & Services Limited (Demerged Company) with effect from April 1, 2014
provided for the following in respect of Employee Stock Option Schemes;

(i) The Company had adopted three stock option plans (ASOP 2003, ASOP 2004 and
ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of
Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option
plans of the Demerged Company, shall be issued one option in the stock option plans
formed by the Resulting Company upon the Scheme coming into effect.

Notes

(a) The estimate of future salary increases, considered in actuarial valuation, takes
into account inflation, seniority, promotions and other relevant factors, such as
demand and supply in the employment market

(b) Discount rate is based on the prevailing market yields of Indian Government
Bonds as at the Balance Sheet date for the estimated term of the obligation.

(c) The Company maintains Gratuity Trust for the purpose of administering the
gratuity payment to its associates namely "Intellect Design Group Gratuity Trust"
(''Group Gratuity Trust''). The Composition of Plan assets is funded through the
Group Gratuity Trust in ICICI Prudential Life Insurance.

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28%
of the exercise price of the options granted under the Schemes of the Demerged
Company.

Apart from the schemes provided under the Demerger arrangement the Company had
following Employee stock option schemes (i) Intellect Stock Option Plan 2015 (ISOP
2015), Intellect Stock Option Plan 2016 (ISOP 2016) and Intellect Stock Option Plan

(ISOP 2018) of its own.

These plans provide for the granting of stock options to employees including directors
of the Company (not being promoter directors and not holding more than 10% of the
equity shares of the Company). The objectives of these plans include attracting and
retaining the best personnel, providing for additional performance incentives and
promoting the success of the Company by providing employees the opportunity to
acquire equity shares.

During the year ended March 31,2018, the Company had offered rights issue to its
shareholders. Consequent to this corporate action, the market price of the shares
reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically
requires the Compensation/Nomination and Remuneration Committee to make a fair
and reasonable adjustment to the option terms in case of corporate action.
Considering the above, the Nomination and Remuneration Committee of Intellect on
November 09, 2017 revised/ reduced the exercise prices of outstanding options (both
vested and unvested) as on the record date i.e. July 18, 2017 by 15 %. The fair values
before and after the modification remained unchanged and there was no incremental
impact in the Statement of Profit and Loss. The option plans are summarised below:

Share options modification

The Nomination and remuneration committee (NRCC) at its meeting held on June 9,
2020 and June 17, 2020 decided to modify the options provided to the employees due
to significant reduction in current market price of equity shares of the Company. As
per decision of NRCC, the employees were given an option to surrender their existing
options and avail of new options under the new scheme in lieu of surrendered option.
As a result, associates holding 60,74,840 options under various schemes ASOP 2011,
ISOP 2015, ISOP 2016 and ISOP 2018 voluntarily surrendered their options on May 29,
2020, June 9, 2020, June 17, 2020 and August 7, 2020 and were issued new options in
the ratio of 2:1 under Intellect Incentive Plan Scheme 2018 (Restrictive Stock Options)
at an exercise price of Rs 5. These modifications were approved by the NRCC.

The Shareholders of the Company in the Extraordinary General Meeting held on
January 29, 2015 approved the Intellect Stock Option Plan 2015. The 2015 plan
provides for issuance of 60,00,000 options convertible into equivalent number of
equity shares of Rs. 5 each to employees but shall exclude independent directors, an
employee belonging to the promoter group or a director holding more than 10% of the
share capital. The tenure of the Scheme is for 12 years from the date of coming into
effect and shall be extended by a period of not more than 5 years as the Board of
Directors may decide. The Nomination Remuneration and Compensation Committee
and the Board had decided to amend the Scheme to include Restricted Stock Units
(RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as
well as for future grants. The Company in its shareholder''s meeting held on August 21,
2020 have approved the modification to the scheme, to include Restrictive stock
options in addition to existing options part of scheme. The plan shall be administered
under 5 different schemes based on the following terms:

Grant price of options (RSUs) under Swarnam 601 shall be Rs.5- per option
The market price, in accordance with the Securities and Exchange Board of India (Share
based employee benefits) Regulations 2014 as amended from time to time, shall be
the latest available closing price prior to the date of the meeting of the Board of
Directors in which options are granted, on the stock exchange on which the shares of
the Company are listed. If the shares are listed on more than one stock exchange then
the stock exchange where there is highest trading volume on the said date shall be
considered. The options shall be valued using the fair value model.

The option vests over a period of 5 years from the date of grant in a graded manner,
subject to fulfillment of vesting conditions as follows:

Intellect Stock option Plan 2016

The Shareholders of the Company in the Extraordinary General Meeting held on
July 21, 2016 approved Intellect Stock Option Plan 2016. The 2016 plan provides for
issuance of 40,00,000 options convertible into equivalent number of equity shares
of Rs. 5 each to employees but shall exclude independent directors, an employee
belonging to the promoter group or a director holding more than 10% of the share
capital. The tenure of the Scheme is for 12 years from the date of coming into effect
and shall be extended by a period of not more than 5 years as the Board of Directors
may decide. The Nomination Remuneration and Compensation Committee and the
board had decided to amend the Scheme to include Restricted Stock Units(RSU''s) to
facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for
future grants. The Company in its shareholding meeting held on August 21, 2020
approved the modification the scheme, to include Restrictive stock options in addition
to existing options part of scheme. A summary of the status of the options granted
under 2016 plan at March 31, 2026 is presented as below:

The Shareholders of the Company in the Annual General Meeting held on August 23,
2018 approved Intellect Incentive Plan Scheme 2018. The 2018 plan provides for
issuance of 62,50,000 options through Restrictive Stock Units (RSU''s) 2018 and ISOP
2018 in total convertible into equivalent number of equity shares of Rs. 5 each to
employees but shall exclude independent directors, an employee belonging to the
promoter group or a director holding more than 10% of the share capital. The tenure
of the scheme for RSU 2018 it shall continue to be in force until (i) its termination by
the Company as per provisions of Applicable Laws, or (ii) the date on which all of the
Restricted Stock Units available for issuance under the RSU 2018 / Stock Options 2018
have been issued and exercised, whichever is earlier and for ISOP 2018 is 12 years from
the date of the Scheme coming to force. The scheme shall be extended by a period of
not more than 5 years as the Board of Directors may decide. Nomination and
remuneration committee (NRCC) in its meeting held on June 15, 2020 had decided to
make the total options fungible between RSU and ISOP 2018. A summary of the status
of the options granted under Intellect Incentive Plan scheme 2018 as at March 31, 2026
is presented below:

The Company is contesting the demands raised by the respective tax authorities, and
the management, based on internal assessment and per its tax advisors, believe that
its position will likely be upheld in the appellate process and ultimate outcome of these
proceedings will not have a material adverse effect on the Company''s financial position
and results of operations.

33 FAIR VALUE

Set out below, is a comparison by class of the carrying amounts and fair value of the
Company''s financial instruments, other than those with carrying amounts that are
reasonable approximations of fair values. The management assessed that the fair
values of cash and cash equivalents, bank balances including deposits, trade
receivables, loans and deposits, other financial assets, trade payables and other
financial liabilities would approximate their carrying amounts due to their nature.

The fair value of the financial assets and liabilities is included at the amount at which
the instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. The method and assumptions used to
estimate the fair values is that the fair values of financial instruments traded in active
markets are based on quoted market prices at the balance sheet date.

Terms and conditions of transactions with related parties

32 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

(i) Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 121.44 million
(March 31, 2025 - Rs.2.95 million).

(ii) Other commitment:

Bank guarantees in the nature of financial guarantees (guarantees being fully backed
by margin deposits) as at March 31, 2026 amounting to Rs. 129.27 million (March 31,
2025 - Rs 47.81 million).

(iii) Claims against the Company, not acknowledged as debt includes:

Future cash outflows in respect of matters considered disputed are determinable only
on receipt of judgments / decisions pending at various forums/authorities. The
management does not expect these claims to succeed and accordingly, no provision
for contingent liability has been recognised in the financial statements.

The Company''s pending litigations comprise proceedings pending with tax authorities.
The Company has reviewed all the proceedings and has adequately provided for where
provisions are required and disclosed contingent liabilities where applicable, in its
financial statements. The Company does not expect the outcome of these proceedings
to have a material adverse effect on the financial statements.

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices)

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

There has been no transfer between Level 1 and Level 2 during the year ended March
31, 2026 and March 31, 2025

35 DERIVATIVE INSTRUMENTS (Hedging of foreign currency exposures)

The Company uses foreign currency forward contracts to hedge its risks associated
with foreign currency fluctuations relating to forecasted transactions. The Company
does not use forward contracts for speculative purposes. The following are the
outstanding Forward Exchange Contracts entered into by the Company as at March 31,
2026 and March 31, 2025 including forward cover taken for forecasted revenue
receivable transactions:

36 RESEARCH AND DEVELOPMENT EXPENDITURE

The Company continues its significant investments in Research and Development efforts
towards research, technology, engineering and new product development. The
Company follows a policy of capitalising new product development, which meets the
criteria of Ind AS 38 Intangible assets and has accordingly recognised such cost as
Internally generated Intangible asset under ''Intangible assets under development''
(Refer note 4(b)) and Intangible asset (Refer note 4(d)). During current year ended
March 31, 2026 the Company has incurred a revenue expenditure towards research of
Rs.1,563.22 million (March 31, 2025 - Rs.1,740.87 million) which has been debited to
the Income statement.

Details of expenses under the respective Head of accounts which are recognised as
Intangible under development :

37 LEASES

The Company has lease contracts for Land and Building used for the purpose of office
space at different location. Leases of such assets generally have lease terms between
1 and 5 years. The Company''s obligations under its leases are secured by the lessor''s
title to the leased assets. Generally, the Company is restricted from assigning and
subleasing the leased assets. There are several lease contracts that include extension
and termination options and variable lease payments, which are further discussed
below.

Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee)
at the inception date as either a finance lease or an operating lease.

Upon adoption of Ind AS 116, the Company applied a single recognition and
measurement approach for all leases except for short-term leases on Plant and
machinery and leases of low-value assets on Office equipments. The standard provides
specific transition requirements and practical expedients, which have been applied by
the Company.

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

1.(b)(i) Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in
exchange rates, with all other variables held constant. The impact on the Company''s
profit before tax is due to changes in the fair value of monetary assets and liabilities
including non-designated foreign currency derivatives. The Company''s exposure to
foreign currency changes for all other currencies other than those stated below is not
material. The sensitivity analysis is unrepresentative of the inherent foreign exchange
risk because the exposure at the end of the reporting period does not reflect the
exposure during the year.

In respect of the Company''s forward derivative contracts, a 5% increase in the contract
exchange rates of each of the currencies underlying such contracts would have
resulted in an increase in Other comprehensive income by Rs. 31.49 million (March 31,
2025 - Rs. 0.58 million).

Conversely, 5% decrease in the exchange rates on foreign currency exposures as at
March 31, 2026 and March 31, 2025 would have had the same but opposite effect,
again holding all other variable constant.

2. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial
instrument or customer contract, leading to a financial loss. The Company is exposed
to credit risk from its operating activities (primarily trade receivables and revenue
accrued not billed) and from its investing activities, including deposits with banks and
financial institutions and other financial instruments.

The Company had total cash outflows for leases of Rs. 82.21 million in March 31, 2026
(March 31, 2025 - Rs. 75.80 million). The Company also had non-cash additions to right-
of-use assets and lease liabilities of Rs. 3.37 million during the year (March 31, 2025 -
Rs.237.91).

The Company has no committed non-cancellable lease arrangements which shall
become effective after March 31, 2026.

The Company enters into lease agreements that incorporate extension and
termination clauses, intended to afford management the necessary flexibility for the
strategic management of its leased-asset portfolio in alignment with operational
requirements. Management''s assessment of whether the exercise of these options is
reasonably certain requires significant judgment. Based on the current assessment, the
Company has no material expected undiscounted potential future rental payments
resulting from extension options not expected to be exercised or termination options
expected to be exercised.

There are no potential future rental payments relating to periods following the exercise
date of extension and termination options that are not included in the lease term.

38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company utilises trade payables and other liabilities (including those arising from
lease arrangements) to finance its operations. The Company has assets arising directly
from its day-to-day business operations, such as trade receivables, cash, and shortÂ¬
term deposits. It also hedges its foreign

Mar 31, 2025

Performance obligations and remaining performance obligations

Information on Company''s performance obligations and remaining performance obligations is summarised in accounting policies (also Refer note 3(k)).

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2025, other than those meeting the exclusion criteria mentioned in Note 3(k) is Rs.1,596.03 million (March 31, 2024 - Rs.2,499.14 million). Out of this, the Company expects to recognise revenue of around 98% (March 31, 2024 - 88%) within the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience without a substantive penalty however, based on current assessment, the occurrence of the same is expected to be remote.

No customer accounted for more than 10% of the revenue for the year ended March 31, 2025 (One customer accounted for more than 10% of the revenue amounting to Rs. 2,531.94 million for the year ended March 31, 2024).

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India where certain sections of code came into effect on May 03, 2023. However, the final rules/interpretations have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

27 EARNINGS PER SHARE

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

Options granted to employees under employees option plan has been considered to be potential equity shares. They are included in determination of diluted EPS to extent of which they are dilutive. Details relating to ESOP are set out in Note 30 Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The Company elected to adopt New Tax Regime from FY 2024-25 onwards. Tax expense for the FY 2023-24 in the Standalone financial statements included reduction in deferred tax charge arising out of the estimated impact due to adoption of new tax regime. This arose from the re-measurement of deferred tax liability that was expected to reverse in future when the company will migrate to the new tax regime. Further, the MAT credit balance amounting to Rs. 125.05 million, for periods up to March 31, 2024, was expensed. Consequently, the MAT write off was accounted for as an exceptional tax expense in the year ended March 31, 2024.

There are certain income-tax related legal proceedings which are pending against the Company. Potential liabilities, if any have been adequately provided for, and the Company does not currently estimate any probable material incremental tax liabilities in respect of these matters.

28 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

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

a. Judgements

In the process of applying the Company''s accounting policies, management has not made any judgements, which have significant effect on the amounts recognised in the standalone financial Statements.

b. Estimates and assumptions

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

1) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on projected sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

2) Share-based payments

The Company initially measures the cost of Equity-settled transactions with employees using a black scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 30.

3) Revenue from contract with customers

The Company is required to make an assessment for each new software license contract as to whether the underlying software requires significant modification or customisation by the Company in order to meet the customer''s requirements. If significant modification or customisation is required, then the license fee is recognised based on percentage-of-completion. Majority of such modifications or customisations have not been deemed significant in current or prior periods.

In respect of service revenue, the management exercises judgment in determining the percentage of completion utilising output measures, such as the achievement of any project milestones stipulated in the contract, or internal quality milestones to assess proportional performance.

The Company also exercises judgment in assessing uncertainties surrounding the probability of collection when payment terms are linked to service implementation milestones or other various contingencies exist. These assessments are made at the outset of the contract.

4) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality.

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

Further details about gratuity obligations and sensitivity analysis are given in Note 29.

5) Taxes

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

6) Provision for allowance of credit Loss

The Company has adopted and laid out its Expected Credit Loss Model (ECL) for determination of the Provision for credit loss allowance, which are primarily in the nature of Trade receivables and Revenue accrued and not billed. In determining its ECL, assumptions and estimates are made in relation to nature of customers (Private Banks, Public Sector Banks, Non-Banking Companies etc), billing and collection terms as per the contract, average ageing of the customer balance and the past trends of collection.

7) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Also Refer to Note 34 and Note 38 for further disclosures.

8) Leases

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

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

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer note 37 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

29 GRATUITY

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. A trust by name âIntellect Design Group gratuity trust" has been constituted by Intellect Design Arena Limited to administer the gratuity fund.

The following tables summarises the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan.

2015), Intellect Stock Option Plan 2016 (ISOP 2016) and Intellect Stock Option Plan

(a) The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market.

(b) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

(c) The Company maintains Gratuity Trust for the purpose of administering the gratuity payment to its associates namely "Intellect Design Group Gratuity Trust" (''Group Gratuity Trust''). The Composition of Plan assets is funded through the Group Gratuity Trust in ICICI Prudential Life Insurance.

(ISOP 2018) of its own.

These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares.

During the year ended March 31,2018, the Company had offered rights issue to its shareholders. Consequent to this corporate action, the market price of the shares reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically requires the Compensation/Nomination and Remuneration Committee to make a fair and reasonable adjustment to the option terms in case of corporate action. Considering the above, the Nomination and Remuneration Committee of Intellect on November 09, 2017 revised/ reduced the exercise prices of outstanding options (both vested and unvested) as on the record date i.e July 18, 2017 by 15 %. The fair values before and after the modification have remained unchanged and there is no incremental impact in the Statement of Profit and Loss. The option plans are summarised below:

Share options modification

The Nomination and remuneration committee (NRCC) at its meeting held at June 9, 2020 and June 17, 2020 decided to modify the options provided to the employees due to significant reduction in current market price of equity shares of the Company. As per decision of NRCC, the employees were given an option to surrender their existing options and avail new options under the new scheme in lieu of surrendered option.

As a result, associates holding 60,74,840 options under various schemes ASOP 2011, ISOP 2015, ISOP 2016 and ISOP 2018 voluntarily surrendered their options on May 29, 2020, June 9, 2020, June 17, 2020 and August 7, 2020 and were issued new options in the ratio of 2:1 under Intellect Incentive Plan Scheme 2018 (Restrictive Stock Options) at an exercise price of Rs 5. These modification have been approved by the NRCC.

The Black Scholes valuation model has been used for computing the weighted average fair value the details of which is mentioned under section RSU 2018 scheme.

Associate Stock Option Plan 2011

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and the Bombay Stock Exchange on February 19, 2015. The 2011 Plan provides for issuance of 48,88,450 options, convertible to equivalent number of equity shares of Rs. 5 each, to the employees. The plan shall be administered under 4 different schemes based on the following terms:

30 SHARE BASED PAYMENTS (EMPLOYEE STOCK OPTION SCHEME)

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting & Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

(i) The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

Apart from the schemes provided under the Demerger arrangement the Company has following Employee stock option schemes (i) Intellect Stock Option Plan 2015 (ISOP

The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The options shall be valued using the fair value model.

The Shareholders of the Company in the Extraordinary General Meeting held on January 29, 2015 approved the Intellect Stock Option Plan 2015. The 2015 plan provides for issuance of 60,00,000 options convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the Board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholder''s meeting held on August 21, 2020 have approved the modification to the scheme, to include Restrictive stock options in addition to existing options part of scheme. The plan shall be administered under 5 different schemes based on the following terms:

Grant price of options (RSUs) under Swarnam 601 shall be Rs.5 per option

The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The options shall be valued using the fair value model.

The Shareholders of the Company in the Extraordinary General Meeting held on May 03, 2016 approved Intellect Stock Option Plan 2016. The 2016 plan provides for issuance of 40,00,000 options convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholding meeting held on August 21, 2020 have approved the modification the scheme, to include Restrictive stock options in addition to existing options part of scheme. A summary of the status of the options granted under 2016 plan at March 31, 2025 is presented as below:

Grant price of options (RSUs) under Swarnam 601 shall be Rs.5 per option

The Shareholders of the Company in the Annual General Meeting held on August 23, 2018 approved Intellect Incentive Plan Scheme 2018. The 2018 plan provides for issuance of 62,50,000 options through Restrictive Stock Units (RSU''s) 2018 and ISOP 2018 in total convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the scheme for RSU 2018 it shall continue to be in force until (i) its termination by the Company as per provisions of Applicable Laws, or (ii) the date on which all of the Restricted Stock Units available for issuance under the RSU 2018 / Stock Options 2018 have been issued and exercised, whichever is earlier and for ISOP 2018 is 12 years from the date of the Scheme coming to force. The scheme shall be extended by a period of not more than 5 years as the Board of Directors may decide. Nomination and remuneration committee (NRCC) in its meeting held of June 15, 2020 has decided to make the total options fungible between RSU and ISOP 2018. A summary of the status of the options granted under Intellect Incentive Plan scheme 2018 as at March 31, 2025 is presented below:

* The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole and cost accrued for share based payments options provided to KMP. At each reporting period, the Company accrues employee bonuses including sales incentive for all the employees in aggregate, which are individually identified in the subsequent financial year. Accordingly, the bonus/sales incentive pertaining to the respective years relate to the amounts paid for the corresponding previous year.

Key Managerial Personnel interests in Employee stock options

Share options held by Key Managerial Personnel of the Company''s ISOP 2015, ISOP 2016 and RSU 2018 plan to purchase Equity shares have the following expiry dates and exercise prices:

Terms and conditions of transactions with related parties

32 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

(i) Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 2.95 million (March 31, 2024 - Rs. 47.03 million).

(ii) Other commitment:

a) Bank guarantees in the nature of financial guarantees (guarantees being fully backed by margin deposits) as at March 31, 2025 amounting to Rs. 47.81 million (March 31, 2024 - Rs. 37.14 million).

b) The Company has committed to enhance their wind energy purchase from 2.2 million units to 2.7 million units, as a consequence, the Company has committed to purchase additional equity shares of Gamma Green Power Private Limited for a consideration of Rs. 1.6 million (previous year - Nil).

c) Pursuant to the shareholders agreement with Digivation and its Promoters, the Company has a commitment to invest in further share capital of Rs. 99.85 million on completion of certain formalities.

(iii) Claims against the Company, not acknowledged as debt includes:

a) Future cash outflows in respect of matters considered disputed are determinable only on receipt of judgments / decisions pending at various forums / authorities. The management does not expect these claims to succeed and accordingly, no provision for contingent liability has been recognised in the financial statements. The Company''s pending litigations comprise proceedings pending with tax authorities. The Company has reviewed all the proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on the financial statements.

The Company is contesting the demands raised by the respective tax authorities, and the management, based on internal assessment and per its tax advisors, believe that its position will likely be upheld in the appellate process and ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

33 FAIR VALUE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values. The management assessed that the fair values of cash and cash equivalents, bank balances including deposits, trade receivables, loans and deposits, other financial assets, trade payables and other financial liabilities would approximate their carrying amounts due to their nature.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The method and assumptions used to estimate the fair values is that the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

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

There has been no transfer between Level 1 and Level 2 during the year ended March 31, 2025 and March 31, 2024

35 DERIVATIVE INSTRUMENTS (Hedging of foreign currency exposures)

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to forecasted transactions. The Company does not use forward contracts for speculative purposes. The following are the outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2025 and March 31, 2024 including forward cover taken for forecasted revenue receivable transactions:

36 RESEARCH AND DEVELOPMENT EXPENDITURE

The Company continues its significant investments in Research and Development efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalising new product development, which meets the criteria of Ind AS 38 Intangible assets and has accordingly recognised such cost as Internally generated Intangible asset under ''Intangible assets under development'' (Refer note 4(b)) and Intangible asset (Refer note 4(d)). During current year ended March 31, 2025 the Company has incurred a revenue expenditure towards research of Rs.1,740.87 million (March 31, 2024 - Rs.1,703.76 million) which has been debited to the Income statement.

Details of expenses under the respective Head of accounts which are recognised as Intangible under development:

37 LEASES

The Company has lease contracts for Land and Building used for the purpose of office space at different location. Leases of such assets generally have lease terms between 1 and 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases except for short-term leases on Plant and machinery and leases of low-value assets on Office equipments. The standard provides specific transition requirements and practical expedients, which have been applied by the Company.

The Company had total cash outflows for leases of Rs. 75.80 million in March 31, 2025 (March 31, 2024 - Rs. 50.62 million). The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 237.91 million during the year (March 31, 2024 - Rs. Nil).

The Company has entered into committed non-cancellable lease arrangements which have not become effective as of the Balance sheet date where the undiscounted future cash outflows in relation to such lease arrangements aggregates to Rs. Nil (March 31, 2024 - Rs. 213.83 million).

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. The management does not expect undiscounted potential future rental payments due to extension options expected not to be exercised and termination options expected to be exercised.

There are no potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise lease liabilities, trade and other payables and financial guarantee contracts. Most of these liabilities relate to financing Company''s working capital cycle. The Company has trade and other receivables in local and in foreign currency, loans and advances that arise directly from its operations. The Company also executes contracts of hedging to cover foreign exchange risk exposure. The Company is accordingly exposed to market risk, credit risk and liquidity risk.

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarised below:

1. Market risk

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

1.(a) Interest rate risk:

The Company''s exposure to the risk of changes in market interest rates relates primarily to debt obligations with floating interest rates. The Company does not have any debt obligations outstanding, other than lease liabilities where interest rates are fixed and implicit at the time of inception of lease and is therefore not subjected to any variability in the interest rates.

1.(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency. 1.(b)(i) Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies other than those stated below is not material. The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

in an increase in Other comprehensive income by Rs. 0.58 million (March 31, 2024 -Rs. 7.46 million).

Conversely, 5% decrease in the exchange rates on foreign currency exposures as at March 31, 2025 and March 31, 2024 would have had the same but opposite effect, again holding all other variable constant.

2. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and revenue accrued not billed) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

2.(a) Trade receivables and Revenue accrued and not billed

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, many minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is determined on expected credit loss method basis the historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10(b) and Note 10(g). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions) operate in several jurisdictions in largely independent markets.

2. (b) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Board of Directors of the Company on an annual basis which are monitored and updated, if necessary, on a regular basis by the management. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the Balance Sheet as at March 31, 2025 and March 31, 2024 is the carrying amount in Notes 7 and Notes 10.

3. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans, debt, and overdraft from both domestic and international banks at an optimised cost.

In respect of the Company''s forward derivative contracts, a 5% increase in the contract exchange rates of each of the currencies underlying such contracts would have resulted

As at March 31, 2025, the outstanding amount of provision for employee benefits amounting to Rs. 880.68 million (March 31, 2024 - Rs. 787.96 million) have been substantially funded, accordingly no liquidity risk perceived.

39 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholders'' value. The Company determines the amount of capital required based on annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and borrowings (including lease liabilities).

The Company manages its capital structure and adjusts in the light of changes in economic conditions and the requirements of the financial covenants or lease arrangements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt only lease liabilities less cash and cash equivalents. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2025 and March 31, 2024

The Company has not disclosed inventory turnover ratio since the Company''s business does not require maintenance of inventories.

*Based on the requirements of Schedule III of the Companies Act,2013.

** Explanation given for change in the ratios which are more than 25% as compared to the preceding year.

43 TRANSFER PRICING ARRANGEMENTS WITH SUBSIDIARIES

The Company has international operations and in its normal course of business with its various subsidiaries, it is involved i n the business of software sale and implementation of its products across various countries. The Company reviews these arrangements on a periodic basis to reflect the current business models and in the current financial year has implemented a transfer pricing model to reflect its business environment. The Company has a policy of maintaining documents as prescribed by the Income-tax Act, 1961 to prove that these international transactions are at arm''s length and believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

44 SEGMENT REPORTING

The Chief Operating Decision Maker monitors the operating results of its business as a single primary segment âSoftware Product Licence and related services" for the purpose of making decisions about resource allocation and performance assessment. The business of the Company falls under a single primary segment i.e. ''Software Product License & related services'' for the purpose of Ind AS 108.

45 OTHER STATUTORY INFORMATION

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

ii. The Company does not have any transactions with Companies struck off.

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

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

v. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (I ntermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

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

viii. The Company has not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

ix. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).

x. The Company has not entered into any Scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013, which is required to be accounted for in the books of account for the year ended March 31, 2025 and March 31, 2024.

xi. No significant events has not been observed which may require adjustment to Financial Statement.

46 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the financial statements to determine the necessity for recognition and / or reporting of any of these events and transactions in the financial statements. As on May 09, 2025, there are no subsequent events to be recognized or reported.

Mar 31, 2024

The Company''s Investment property consists of premises let out on lease. As at March 31, 2024 and March 31, 2023, the fair value of the property is Rs. 155 million and Rs. 226 million, respectively. The fair value is based on valuation determined by an accredited independent valuer who is a specialist in valuing these types of investment properties and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. A valuation model in accordance with that recommended by the International Valuation Standards Committee has been applied.

The Company has no restrictions on the realisability of its Investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.

Fair value hierarchy disclosures for Investment property have been provided in Note 34.

Table No. 3.21

i. Out of the above balances Rs. 81.72 million (March 31, 2023 - Rs. 64.30 million) have been pledged as security by the Company for availing fund and non-fund based credit facilities. The Company has sanctioned fund and non-fund based working capital facilities which are secured by hypothecation of Land and Building, non-current and current assets of the Company ranking on a pari passu basis.

ii. Non-current bank balances as at March 31, 2024 includes restricted bank balance representing Company''s share of money held jointly with the subcontractor based on subcontract agreement, amounting to Rs. 64.08 million (March 31,2023 -Rs. 298.20 million). The Company will be able to withdraw the funds upon confirmation for distribution from the subcontractor/ joint holder.

Balance with banks on deposit accounts earn interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

Out of the above Rs. 7.47 million (March 31, 2023 - Rs. 0.30 million) are held as margin money deposits by the Company for availing fund and non-fund based credit facilities.

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Equity shares entitle the holder to participate in dividends, and to share in the proceeds of winding up of the Company in proportion to the number of and amounts paid on the shares held.

* The balance as at March 31, 2024 is net of allowance for expected credit loss of Rs. 776.90 million (March 31, 2023 - Rs.626.90 million).

** The balance as at March 31, 2024 is net of allowance for expected credit loss of Rs.75 million (March 31, 2023 - Rs. 75 million).

*** Includes amounts held on behalf of a subcontractor based on subcontract agreement, for Rs. 198.61 million (March 31, 2023 - Rs. 187.28 million) in a jointly held restricted bank account which is pending distribution and equivalent trade payable is recognised. (Refer note 7(b(ii)).

# The balance as at March 31, 2024 is net of allowance for expected credit loss of Rs. 9.93 million (March 31, 2023 - Rs. 9.93 million).

14(a) Securities premium

The Securities premium received during the year represents the premium received towards allotment of 11,01,498 equity shares. The balance can be utilised towards issuance of fully paid bonus shares, buy back of its own shares etc. in accordance with Companies Act 2013, by the Company.

14(b) Share based payment reserve

Fair value of the options granted is to be expensed over the life of the vesting period as employee stock compensation costs reflecting period of receipt of service. Share based payment reserve is used to record the fair value of equity-settled, share-based payment transactions with employees. The amounts recorded in this reserve are transferred to securities premium upon exercise of stock options and transferred to the general reserve on account of stock options not exercised by employees and lapsed during the year.

Performance obligations and remaining performance obligations

Information on Company''s performance obligations and remaining performance obligations is summarised in accounting policies (also Refer note 3(k)).

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2024, other than those meeting the exclusion criteria mentioned in Note 3(k) is Rs. 2,499.14 million (March 31, 2023 - Rs. 1,668.51 million). Out of this, the Company expects to recognise revenue of around 88% (March 31, 2023 - 90%) within the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience without a substantive penalty however, based on current assessment, the occurrence of the same is expected to be remote.

One customer accounted for more than 10% of the revenue amounting to Rs. 2,531.94 million (March 31, 2023 - Rs. 2,551.87 million) for the year ended March 31, 2024.

27 EARNINGS PER SHARE

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

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

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

28 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

a. Judgements

In the process of applying the Company''s accounting policies, management has not made any judgements, which have significant effect on the amounts recognised in the standalone financial Statements.

b. Estimates and assumptions

The Company has elected to adopt New Tax Regime from FY 2024-25 onwards. Tax expense in the Standalone financial statements includes reduction in deferred tax charge arising out of the estimated impact due to adoption of new tax regime. This is arising from the re-measurement of deferred tax liability that is expected to reverse in future when the company will migrate to the new tax regime. Further, the MAT credit balance amounting to Rs. 125.05 million, for periods up to March 31, 2024, has been expensed. Consequently, the MAT write off has been accounted for as exceptional tax expense in the year ended March 31, 2024.

1) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on projected sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

2) Share-based payments

of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 30.

3) Revenue from contract with customers

The Company is required to make an assessment for each new software license contract as to whether the underlying software requires significant modification or customisation by the Company in order to meet the customer''s requirements. If significant modification or customisation is required, then the license fee is recognised based on percentage-of-completion. Majority of such modifications or customisations have not been deemed significant in current or prior periods.

In respect of service revenue, the management exercises judgment in determining the percentage of completion utilising output measures, such as the achievement of any project milestones stipulated in the contract, or internal quality milestones to assess proportional performance.

The Company also exercises judgment in assessing uncertainties surrounding the probability of collection when payment terms are linked to service implementation milestones or other various contingencies exist. These assessments are made at the outset of the contract.

4) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality.

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

Further details about gratuity obligations and sensitivity analysis are given in Note 29.

5) Taxes

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

6) Provision for allowance of credit Loss

The Company has adopted and laid out its Expected Credit Loss Model (ECL) for determination of the Provision for credit loss allowance, which are primarily in the nature of Trade receivables and Revenue accrued and not billed. In determining its ECL, assumptions and estimates are made in relation to nature of customers (Private Banks, Public Sector Banks, Non-Banking Companies etc), billing and collection terms as per the contract, average ageing of the customer balance and the past trends of collection.

7) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Also Refer to Note 34 and Note 38 for further disclosures.

8) Leases

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

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

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer note 37 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

29 GRATUITY

The following table summarises the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.

These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares.

(a) The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market.

(b) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

During the year ended March 31,2018, the Company had offered rights issue to its shareholders. Consequent to this corporate action, the market price of the shares reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically requires the Compensation/Nomination and Remuneration Committee to make a fair and reasonable adjustment to the option terms in case of corporate action. Considering the above, the Nomination and Remuneration Committee of Intellect on November 09, 2017 revised/ reduced the exercise prices of outstanding options (both vested and unvested) as on the record date i.e July 18, 2017 by 15 %. The fair values before and after the modification have remained unchanged and there is no incremental impact in the Statement of Profit and Loss. The option plans are summarised below:

Share options modification

The details of surrendered and reissue options are provided below:

Table No. 3.80

The Black Scholes valuation model has been used for computing the weighted average fair value the details of which is mentioned under section RSU 2018 scheme.

Associate Stock Option Plan 2011

30 SHARE BASED PAYMENTS (EMPLOYEE STOCK OPTION SCHEME)

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting & Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

(i) The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

Apart from the schemes provided under the Demerger arrangement the Company has following Employee stock option schemes (i) Intellect Stock Option Plan 2015 (ISOP 2015), Intellect Stock Option Plan 2016 (ISOP 2016) and Intellect Stock Option Plan

(ISOP 2018) of its own.

The option vests over a period of 5 years from the date of grant in a graded manner, subject to fulfilment of vesting conditions as follows:

The Shareholders of the Company in the Extraordinary General Meeting held on January 29, 2015 approved the Intellect Stock Option Plan 2015. The 2015 plan provides for issuance of 60,00,000 options convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the Board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholder''s meeting held on August 21, 2020 have approved the modification to the scheme, to include Restrictive stock options in addition to existing options part of scheme. The plan shall be administered under 5 different schemes based on the following terms:

Table No. 3.92

Grant price of options (RSUs) under Swarnam 601 shall be Rs.5 per option

The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The options shall be valued using the fair value model.

The Shareholders of the Company in the Extraordinary General Meeting held on May 03, 2016 approved Intellect Stock Option Plan 2016. The 2016 plan provides for issuance of 40,00,000 options convertible into equivalent number of equity shares of Rs.5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholding meeting held on August 21, 2020 have approved the modification the scheme, to include Restrictive stock options in addition to existing options part of scheme. A summary of the status of the options granted under 2016 plan at March 31, 2024 is presented as below:

Grant price of options (RSUs) under Swarnam 601 shall be Rs.5 per option

Intellect Incentive Plan Scheme 2018

The Shareholders of the Company in the Annual General Meeting held on August 23, 2018 approved Intellect Incentive Plan Scheme 2018. The 2018 plan provides for issuance of 62,50,000 options through Restrictive Stock Units (RSU''s) 2018 and ISOP 2018 in total convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the scheme for RSU 2018 it shall continue to be in force until (i) its termination by the Company as per provisions of Applicable Laws, or (ii) the date on which all of the Restricted Stock Units available for issuance under the RSU 2018 / Stock Options 2018 have been issued and exercised, whichever is earlier and for ISOP 2018 is 12 years from the date of the Scheme coming to force. The scheme shall be extended by a period of not more than 5 years as the Board of Directors may decide. Nomination and remuneration committee (NRCC) in its meeting held of June 15, 2020 has decided to make the total options fungible between RSU and ISOP 2018. A summary of the status of the options granted under Intellect Incentive Plan scheme 2018 as at March 31, 2024 is presented below:

Terms and conditions of transactions with related parties

32 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

(i) Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 47.03 million (March 31, 2023 - Rs.69.94 million).

(ii) Other commitment:

Bank guarantees in the nature of financial guarantees (guarantees being fully backed by margin deposits) as at March 31, 2024 amounting to Rs. 37.14 million (March 31, 2023 - Rs 179.46 million)

(iii) Claims against the Company, not acknowledged as debt includes:

Future cash outflows in respect of matters considered disputed are determinable only on receipt of judgments / decisions pending at various forums / authorities. The management does not expect these claims to succeed and accordingly, no provision for contingent liability has been recognised in the financial statements.

The Company''s pending litigations comprise proceedings pending with tax authorities. The Company has reviewed all the proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on the financial statements.

The Company is contesting the demands raised by the respective tax authorities, and the management, based on internal assessment and per its tax advisors, believe that its position will likely be upheld in the appellate process and ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

33 FAIR VALUE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values. The management assessed that the fair values of cash and cash equivalents, bank balances including deposits, trade receivables, loans and deposits, other financial assets, trade payables and other financial liabilities would approximate their carrying amounts due to their nature.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The method and assumptions used to estimate the fair values is that the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Table No. 3.151

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

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

There has been no transfer between Level 1 and Level 2 during the year ended March 31, 2024 and March 31, 2023

35 DERIVATIVE INSTRUMENTS (Hedging of foreign currency exposures)

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to forecasted transactions. The Company does not use forward contracts for speculative purposes. The following are the outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2024 and March 31, 2023 including forward cover taken for forecasted revenue receivable transactions:

Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases except for short-term leases on Plant and machinery and leases of low-value assets on Office equipments. The standard provides specific transition requirements and practical expedients, which have been applied by the Company.

36 RESEARCH AND DEVELOPMENT EXPENDITURE

The Company continues its significant investments in Research and Development efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalising new product development, which meets the criteria of Ind AS 38 Intangible assets and has accordingly recognised such cost as Internally generated Intangible asset under ''Intangible assets under development'' (Refer note 4(b)) and Intangible asset (Refer note 4(d)). During current year ended March 31, 2024 the Company has incurred a revenue expenditure of Rs.1,703.76 million (March 31, 2023 - Rs.1,500.00 million) which has been debited to the Income statement and capital expenditure as per table below:

We hereby furnish the details of expenses under the respective Head of accounts which are recognised as Intangible assets under development:

37 LEASES

The Company has lease contracts for Land and Building used for the purpose of office space at different location. Leases of such assets generally have lease terms between 1 and 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

Table No. 3.162

The Company had total cash outflows for leases of Rs. 50.62 million in March 31, 2024 (March 31, 2023 - Rs. 50.11 million). The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. Nil million during the year (March 31, 2023 -Rs.105.44 million).

There are no potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarised below:

1. Market risk

1.(a) Interest rate risk:

1.(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

1.(b)(i) Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies other than those stated below is not material. The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Table No. 3.163

In respect of the Company''s forward derivative contracts, a 5% increase in the contract exchange rates of each of the currencies underlying such contracts would have resulted in an increase in Other comprehensive income by Rs. 7.46 million (March 31, 2023 - Rs. 7.35 million.)

Conversely, 5% decrease in the exchange rates on foreign currency exposures as at March 31, 2024 and March 31, 2023 would have had the same but opposite effect, again holding all other variable constant.

2. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and revenue accrued not billed) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

2.(a) Trade receivables and Revenue accrued and not billed

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, many minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is determined on expected credit loss method basis the historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 11(b) and Note 11(g). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions) operate in several jurisdictions in largely independent markets.

2.(b) Financial instruments and cash deposits

concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the Balance Sheet as at March 31, 2024 and March 31, 2023 is the carrying amount in Notes 7 and Notes 11.

3. Liquidity risk

As at March 31, 2024, the outstanding amount of provision for employee benefits amounting to Rs. 787.96 million (March 31, 2023 - Rs. 745.38 million) have been substantially funded, accordingly no liquidity risk perceived.

39 CAPITAL MANAGEMENT

43 TRANSFER PRICING ARRANGEMENTS WITH SUBSIDIARIES

44 SEGMENT REPORTING

The Management monitors the operating results of its business as a single primary segment âSoftware Product Licence and related services" for the purpose of making decisions about resource allocation and performance assessment. The business of the Company falls under a single primary segment i.e. ''Software Product License & related services'' for the purpose of Ind AS 108.

45 OTHER STATUTORY INFORMATION

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

ii. The Company does not have any transactions with Companies struck off.

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

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

v. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (I ntermediaries) with the understanding that the Intermediary shall:

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

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

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

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

46 MAINTENANCE OF AUDIT TRAIL

The Company have used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has not operated throughout the year for all relevant transactions recorded in the software.

Mar 31, 2023

^Security deposits are non-derivative financial assets which generate a fixed or variable interest income for the Company.

**Loan to employees are non-derivative financial assets which generate a fixed or variable interest income for the Company. There are no loans given to any Promoters / Directors / Key management personnel.

i. Out of the above balances Rs. 64.30 million (March 31, 2022 - Rs. 77.71 million) have been pledged as security by the Company for availing fund and non-fund based credit facilities. The Company has sanctioned fund and non fund based working capital facilities which are secured by hypothecation of Land and Building, non-current and current assets of the Company ranking on a pari passu basis.

ii. Non-current bank balances as at March 31, 2023 includes restricted bank balance of Company''s share of money based on subcontract agreement, lying in a joint escrow account amounting to Rs. 298.20 million (March 31, 2022 - Nil). Company will be able to withdraw these proceeds upon confirmation for distribution from the escrow holder (who is a subcontractor in a joint project).

Performance obligations and remaining performance obligations

Information on Company''s performance obligations and remaining performance obligations is summarised in accounting policies (also Refer note 3(j)).

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2023, other than those meeting the exclusion criteria mentioned in Note 30) is Rs. 1,668.51 million (March 31, 2022 - 2,040.11 million). Out of this, the Company expects to recognise revenue of around 90% (March 31, 2022 -70%) within the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience without a substantive penalty however, based on current assessment, the occurrence of the same is expected to be remote.

One customer accounted for more than 10% of the revenue amounting to Rs. 2,551.87 million (March 31, 2022 - 2,138.58 million) for the year ended March 31, 2023.

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

Note:

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') subsequently amended in Finance Act issued by Ministry of Law and Justice (Legislative Department) on September 20, 2019 which is effective April 1, 2019, domestic companies have the option to pay corporate income tax rate at 22% plus applicable surcharge and cess (''New tax rate'') subject to certain conditions. Tax expense in the standalone financial statements includes reduction in deferred tax charge arising out of the estimated impact amounting to Rs. 19.53 million (March 31, 2022 - Rs. 200.72 million). This is arising from the re-measurement of deferred tax liability that is expected to reverse in future when the Company will migrate to the new tax regime.

26 EARNINGS PER SHARE

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

28 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

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

a. Judgements

In the process of applying the Company''s accounting policies, management has not made any judgements, which have significant effect on the amounts recognised in the standalone financial statements.

b. Estimates and assumptions

1) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on projected sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

2) Share-based payments

3) Revenue from contract with customers

significant modification or customisation is required, then the license fee is recognised based on percentage-of-completion. Majority of such modifications or customisations have not been deemed significant in current or prior periods.

In respect of service revenue, the management exercises judgment in determining the percentage of completion utilising output measures, such as the achievement of any project milestones stipulated in the contract, or internal quality milestones to assess proportional performance.

The Company also exercises judgment in assessing uncertainties surrounding the probability of collection when payment terms are linked to service implementation milestones or other various contingencies exist. These assessments are made at the outset of the contract.

4) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality.

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

Further details about gratuity obligations and sensitivity analysis are given in Note 29.

5) Taxes

Current Tax for the current year is computed as per the provisions of Section 115JB and the Minimum Alternate Tax liability (MAT) is provided for. Significant management judgement is involved in evaluating and recognising MAT credit, to be set off against the future taxable profits for which the Company has an eligible carry forward period of 15 years.

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

6) Provision for allowance of credit Loss

The Company has adopted and laid out its Expected Credit Loss Model (ECL) for determination of the Provision for credit loss allowance, which are primarily in the nature of Trade receivables and Revenue accrued and not billed. In determining its ECL, assumptions and estimates are made in relation to nature of customers (Public Sector Banks, Non-Banking Finance Companies, Private Banks etc), billing and collection terms as per the contract, average ageing of the customer balance and the past trends of collection.

7) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Also Refer to Note 34 and Note 38 for further disclosures.

8) Leases

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

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

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer note 37 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

29 GRATUITY

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

(a) The estimate of future salary increases, considered in actuarial valuation, takes into account, inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market.

(b) Discount rate is based on the prevailing market yields of Indian government bonds as at the balance sheet date for the estimated term of the obligation.

(ISOP 2018) of its own.

These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares.

During the year ended March 31, 2018, the Company had offered rights issue to its shareholders. Consequent to this corporate action, the market price of the shares reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically requires the Compensation/Nomination and Remuneration Committee to make a fair and reasonable adjustment to the option terms in case of corporate action. Considering the above, the Nomination and Remuneration Committee of Intellect on November 09, 2017 revised/ reduced the exercise prices of outstanding options (both vested and unvested) as on the record date i.e July 18, 2017 by 15 %. The fair values before and after the modification have remained unchanged and there is no incremental impact in the Statement of Profit and Loss. The option plans are summarised below:

Share options modification

the ratio of 2:1 under Intellect Incentive Plan Scheme 2018 (Restrictive Stock Options) at an exercise price of Rs. 5. These modification have been approved by the NRCC.

The Black Scholes valuation model has been used for computing the weighted average fair value the details of which is mentioned under section RSU 2018 scheme.

Associate Stock Option Plan 2011

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and the Bombay Stock Exchange on February 19, 2015 . The 2011 Plan provides for issuance of 48,88,450 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees. The plan shall be administered under 4 different schemes based on the following terms:

30 SHARE BASED PAYMENTS (EMPLOYEE STOCK OPTION SCHEME)

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting and Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

(i) The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting and Services Limited, as provided in the Scheme of Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

Intellect Stock option Plan 2015

The Shareholders of the Company in the Extraordinary General Meeting held on January 29, 2015 approved the Intellect Stock Option Plan 2015. The 2015 plan provides for issuance of 60,00,000 options convertible into equivalent number of equity shares of Rs. 5 each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the Board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholder''s meeting held on August 21, 2020 have approved the modification to the scheme, to include Restrictive stock options in addition to existing options part of scheme. The plan shall be administered under 5 different schemes based on the following terms:

Grant price of options (RSU''s) under Swarnam 601 shall be Rs. 5 per option

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

Intellect Stock option Plan 2016

Grant price of options (RSUs) under Swarnam 601 shall be Rs. 5 per option The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The options shall be valued using the fair value model.

Intellect Incentive Plan Scheme 2018

The Shareholders of the Company in the Annual General Meeting held on August 23, 2018 approved Intellect Incentive Plan Scheme 2018. The 2018 plan provides for issuance of 62,50,000 options through Restrictive Stock Units (RSU''s) 2018 and ISOP 2018 in total convertible into equivalent number of equity shares of Rs. 5/- each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the scheme for RSU 2018 it shall continue to be in force until (i) its termination by the Company as per provisions of Applicable Laws, or (ii) the date on which all of the Restricted Stock Units available for issuance under the RSU 2018 / Stock Options 2018 have been issued and exercised, whichever is earlier and for ISOP 2018 is 12 years from the date of the Scheme coming to force. The scheme shall be extended by a period of not more than 5 years as the Board of Directors may decide. Nomination and remuneration committee (NRCC) in its meeting held of June 15, 2020 has decided to make the total options fungible between RSU and ISOP 2018. A summary of the status of the options granted under Intellect Incentive Plan scheme 2018 as at March 31, 2023 is presented below:

Terms and conditions of transactions with related parties

The sales to related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023 and March 31, 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

32 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

(i) Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 69.94 million (March 31, 2022- Rs.6.76 million).

(ii) Other commitment:

Bank guarantees in the nature of financial guarantees (guarantees being fully backed by margin deposits) as at March 31, 2023 amounting to Rs. 179.46 million (March 31, 2022 - Rs 470.73 million)

(iii) Claims against the Company, not acknowledged as debt includes:

The Company''s pending litigations comprise of proceedings pending with tax authorities. The Company has reviewed all the proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on the financial statements.

The Company is contesting the demands raised by the respective tax authorities, and the management, based on internal assessment and per its tax advisors, believe that its position will likely be upheld in the appellate process and ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

b) The Honorable Supreme Court of India had passed judgement on February 28, 2019 that all allowances paid to employees are to be considered for the purpose of Provident fund wages determination. There are numerous interpretative issues relating to the above judgement. As a matter of caution, the Company has recognised a provision on a prospective basis from the date of Supreme Court order. The Company will update its provision, on receiving further clarity on the subject.

33 FAIR VALUE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values. The management assessed that the fair values of cash and cash equivalents, bank balances including deposits, trade receivables, loans and deposits, other financial assets, trade payables and other financial liabilities would approximate their carrying amounts due to their nature.

The Company continues its significant investments in Research and Development efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalising new product development, which meets the criteria of Ind AS 38 Intangible assets and has accordingly recognised such cost as Internally generated Intangible asset under ''Intangible assets under development'' (Refer note 4(b)) and Intangible asset (Refer note 4(d)). During the year ended March 31, 2023 the Company has incurred a revenue expenditure of Rs. 1,500 million (March 31, 2022 - Rs. 1,051 million) which has been debited to the Income statement and capital expenditure as per table below:

The Company had total cash outflows for leases of Rs. 50.11 million in March 31, 2023 (March 31, 2022 - Rs. 42.44 million). The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 105.44 million during the year (March 31, 2022-Rs. 1.93 million). There are no future cash outflows relating to leases that have not yet commenced.

37 LEASES

The Company has lease contracts for Land and Building used for the purpose of office space at different locations. Leases of such assets generally have lease terms between 1 and 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases except for short-term leases on Plant and machinery and leases of low-value assets on Office equipments. The standard provides specific transition requirements and practical expedients, which have been applied by the Company.

There are no potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company is accordingly exposed to market risk, credit risk and liquidity risk.

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarised below:

1. Market risk

1.(a) Interest rate risk:

The Company''s exposure to the risk of changes in market interest rates relates primarily to debt obligations with floating interest rates. The Company does not have any debt obligations outstanding, other than lease liabilities where interest rates are fixed and implicit at the time of inception of the lease and is therefore not subject to any variability in the interest rates.

1.(b) Foreign currency risk

1.(b)(i) Foreign currency sensitivity

of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Board of Directors of the Company on an annual basis which are monitored and updated, if necessary, on a regular basis by the management. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through the counterparty''s potential failure to make payments.

including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material. The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

The Company''s maximum exposure to credit risk for the components of the Balance Sheet as at March 31, 2023 and March 31, 2022 is the carrying amount as illustrated in Notes 7 and Notes 11.

3. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet it cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans, debt, and overdraft from both domestic and international banks at an optimised cost.

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

In respect of the Company''s forward derivative contracts, a 5% increase in the contract exchange rates of each of the currencies underlying such contracts would have resulted in increase in Other Comprehensive income by Rs. 7.35 million (March 31, 2022 -Rs. 17.58 million.)

Conversely, 5% decrease in the above mentioned exchange rates on foreign currency exposures as at March 31, 2023 and March 31, 2022 would have had the same but opposite effect, again holding all other variable constant.

2. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and revenue accrued not billed) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

2.(a) Trade receivables and Revenue accrued and not billed

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, many minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is determined on expected credit loss method basis the historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 11(b) and Note 11(g). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions) operate in several jurisdictions in largely independent markets.

As at March 31, 2023, the outstanding amount of provision for employee benefits amounting to Rs. 745.38 million (March 31, 2022 - Rs. 522.52 million) have been substantially funded, accordingly no liquidity risk perceived.

39 CAPITAL MANAGEMENT

The Company manages its capital structure and adjusts in the light of changes in economic conditions and the requirements of financial covenants or lease arrangements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt only lease liabilities less cash and cash equivalents.

43 TRANSFER PRICING ARRANGEMENTS WITH SUBSIDIARIES

45 OTHER STATUTORY INFORMATION

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

ii. The Company does not have any transactions with Companies struck off.

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

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

v. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries)

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

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

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

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

46 PRIOR PERIODS COMPARATIVES

Previous year figures have been re grouped/reclassified, where ever necessary to conform to this years classification

Mar 31, 2022

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') subsequently amended in Finance Act issued by Ministry of Law and Justice (Legislative Department) on 20 September 2019 which is effective 1^st April 2019, domestic companies have the option to pay corporate income tax rate at 22% plus applicable surcharge and cess (''New tax rate'') subject to certain conditions. Tax expense for the year ended March 31, 2022 in the consolidated and standalone financial statements includes one-time reduction in deferred tax charge arising out of the estimated impact amounting to Rs. 200 million. This is arising from the re-measurement of deferred tax liability that is expected to reverse in future when the Company will migrate to the new tax regime.

27 EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. The following reflects the income and share data used in the basic and diluted EPS computations:

29 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

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

a. Judgements

In the process of applying the Company''s accounting policies, management has not made any judgements, which have significant effect on the amounts recognised in the Standalone Financial Statements.

b. Estimates and assumptions

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

1) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on projected sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

2) Share-based payments

3) Revenue from Contract with Customers

The Company is required to make an assessment for each new software license contract as to whether the underlying software requires significant modification or customization by the Company in order to meet the customer''s requirements. If significant modification or customization is required, then the license fee is recognized based on percentage-of-completion. Majority of such modifications or customizations have not been deemed significant in current or prior periods.

In respect of service revenue, the management exercises judgment in determining the percentage of completion utilizing output measures, such as the achievement of any project milestones stipulated in the contract, or internal quality milestones to assess proportional performance.

The Company also exercises judgement in assessing uncertainties surrounding the probability of collection when payment terms are linked to service implementation milestones or other various contingencies exist. These assessments are made at the outset of the contract.

4) Defined benefit plans (gratuity benefits)

long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

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

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

Further details about gratuity obligations and sensitivity analysis are given in Note 30.

5) Taxes

Current Tax for the current year is computed as per the provisions of Section 115JB and the Minimum Alternate Tax liability (MAT) is provided for Significant management judgements have been involved in evaluating and recognising MAT credit, to be set off against the future taxable profits for which the Company has an eligible carry forward period of 15 years. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

6) Provision for Allowance of Credit Loss

The Company has adopted and laid out its Expected Credit Loss Model (ECL) for determination of the Provision for credit loss allowance, which are primarily in the nature of trade receivables and unbilled revenue. In determining its ECL, assumptions and estimates are made in relation to Nature of customers (Public Sector Banks, Non-Banking Finance Companies, Private Banks etc), billing and collection terms as per the contract, average aging of the customer balance and the past trends of collection.

7) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 34 & 39 for further disclosures.

8) Leases

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

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

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer Note 38 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

I GRATUITY

ii. Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

iii. The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

Apart from the schemes provided under the Demerger arrangement the company has the following Employee stock option schemes:

(i) The Company has formulated two stock option plans (Intellect Stock Option Plan 2015, Intellect Stock Option Plan 2016) of its own.

These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares.

During the year 2017-18, the Company had offered rights issue to its shareholders. Consequent to this corporate action, the market price of the shares reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically requires the Compensation/Nomination & Remuneration Committee to make a fair and reasonable adjustment to the option terms in case of corporate action. Considering the above, the Nomination and Remuneration Committee of Intellect on 09th November 2017 has revised/reduced the exercise prices of outstanding options (both vested and unvested) as on the record date i.e 18th July, 2017 by 15%. The fair values before and after the modification have remained unchanged and there is no incremental impact in the Income statement. The option plans are summarized below:

Share options modification

As a result of, associates holding 6,074,840 options under various schemes ASOP 2011, ISOP 2015, ISOP 2016 and ISOP 2018 have voluntarily surrendered their options on May 29, 2020, June 9, 2020, June 17, 2020 and August 7, 2020 and were issued new options in the ratio of 2:1 under Intellect Incentive Plan Scheme 2018 (Restrictive Stock Options) at a exercise price of INR 5. These modification have been approved by the NRCC.

31 SHARE BASED PAYMENTS

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting & Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

i. The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of Arrangement.

Associate Stock Option Plan 2011

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and the Bombay Stock Exchange on February 19, 2015 . The 2011 Plan provides for issuance of 48,88,450 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees. The plan shall be administered under 4 different schemes based on the following terms:

Intellect Stock option Plan 2015

The Shareholders of the Company in the Extraordinary General Meeting held on January 29, 2015 approved the Intellect Stock Option Plan 2015. The 2015 plan provides for issuance of 60,00,000 options convertible into equivalent number of equity shares of Rs 5/- each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the board has decided to amend the Scheme to include Restricted Stock Units(RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants.The Company in its shareholder meeting held on August 21, 2020 have approved the modification of the scheme, to include Restrictive stock options in addition to existing options part of scheme. The plan shall be administered under 5 different schemes based on the following terms:

Intellect Stock option Plan 2016

The Shareholders of the Company in the Extraordinary General Meeting held on May 03, 2016 approved Intellect Stock Option Plan 2016. The 2016 plan provides for issuance of 4,000,000 options convertible into equivalent number of equity shares of Rs 5/- each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. The Nomination Remuneration and Compensation Committee and the board has decided to amend the Scheme to include Restricted Stock Units (RSU''s) to facilitate grant of fresh RSU''s in lieu of options voluntarily surrendered as well as for future grants. The Company in its shareholding meeting held on August 21, 2020 have approved the modification the scheme, to include Restrictive stock options in addition to existing options part of scheme. A summary of the status of the options granted under 2016 plan at March 31, 2021 is presented as below:

Grant price of options (RSU''s) under Swarnam 601 shall be Rs.5/- per option.

Intellect Incentive Plan Scheme 2018

The Shareholders of the Company in the Annual General Meeting held on August 23, 2018 approved Intellect Incentive Plan Scheme 2018. The 2018 plan provides for issuance of 62,50,000 options through Restrictive Stock Units (RSU''s) 2018 and ISOP 2018 in total convertible into equivalent number of equity shares of Rs. 5/-each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the scheme for RSU 2018 it shall continue to be in force until (i) its termination by the Company as per provisions of Applicable Laws, or (ii) the date on which all of the Restricted Stock Units available for issuance under the RSU 2018 / Stock Options 2018 have been issued and exercised, whichever is earlier and for ISOP 2018 is 12 years from the date of the Scheme coming to force. The scheme shall be extended by a period of not more than 5 years as the Board of Directors may decide. Nomination and remuneration committee (NRCC) in its meeting held of June 15, 2020 has decided to make the total options fungible between RSU and ISOP 2018. A summary of the status of the options granted under Intellect Incentive Plan scheme 2018 at March 31, 2022 is presented below:

Terms and conditions of transactions with related parties

For the year ended 31 March 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021 is Rs Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

33 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

(i) Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 6.76 million (March 31, 2021: Rs.4.91 million).

(ii) Other Commitment:

Bank guarantees in the nature of Financial guarantees (backed up by Fixed deposits) as at March 31, 2022 amounting to Rs.470.73 million (March 31, 2021 : Rs 530.94 millions)

(iii) Claims against the Company, not acknowledged as debt includes:

The Company''s pending litigations comprise of proceedings pending with tax authorities. The company has reviewed all the proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements.The Company does not expect the outcome of these proceedings to have a material adverse effect on the financial statements.

Table No. 3.134

The Company is contesting the demands raised by the respective tax authorities, and the management, based on internal assessment and per its tax advisors, believe that its position will likely be upheld in the appellate process and ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

Table No. 3.136

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities

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

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

There has been no transfer between level 1 and level 2 during the year ended March 31, 2022 and March 31, 2021

b) During the year 2017, the Company has entered into a sub-contract arrangement with Ms Nextender (''Claimant'') for execution of a contract. Subsequently, in February 2019, the Company has scoped out the work of Nextender to a third party service providers due to various service quality issues raised by the customer. Claimant has filed Statement of Claim with the Arbitral Tribunal India claiming specific performance of sub-contract arrangements or for an alternate compensation for material breach of terms of contract. The Company has filed its response with the Arbitral Tribunal and pending hearing. The case outstanding is in ordinary course of business. The Company does not expect these proceedings to result in liabilities that have a material effect on the company''s financial position.

c) The honorable Supreme Court of India had passed judgement on February 28, 2019 that all allowances paid to employees are to be considered for the purpose of Provident fund wages determination. There are numerous interpretative issues relating to the above judgement. As a matter of caution, the Company has made a provison on a prospective basis from the date of Supreme Court order. The Company will update its provison, on receiving further clarity on the subject.

34 FAIR VALUE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values. The management assessed that the cash and cash equivalents, trade receivables, trade payables, fixed deposits, bank overdrafts and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

37 RESEARCH AND DEVELOPMENT EXPENDITURE

The Company continues its significant investments in Research and Development efforts towards research, technology, engineering and new product development.The Company follows a policy of capitalising new product development, which meets the critereas of Ind AS 38 Intangible assets and has accordingly recognised such cost as Internally generated Intangible asset under ''Intangible assets under development'' (Note 4(b)) and Intangible asset (Note 5). During the current year ended March 31, 2022 the Company has incurred a revenue expenditure of Rs. 1,051 millions (March 31, 2021 - Rs.760 million) which has been debited to the Income statement and Capital expenditure as per table below:

38 LEASES

The Company has lease contracts for Land and Building used for the purpose of office space at differnt location. Leases of such assets generally have lease terms between 1 and 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases except for short-term leases on Plant and Machinery and leases of low-value assets on office equipments. The standard provides specific transition requirements and practical expedients, which have been applied by the Company.

The Company had total cash outflows for leases of Rs. 42.44 million in March 31, 2022 (March 31, 2021: Rs. 67.82 million) The Company also had non-cash additions to right-of-use assets and lease liabilities of Rs. 1.93 million during the year (March 31, 2021: Rs. Nil million). There are no future cash outflows relating to leases that have not yet commenced.

There are no potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

39 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise of short tenured borrowings, trade and other payables and financial guarantee contracts. Most of these liabilities relate to financing Company''s working capital cycle. The Company has trade and other receivables, loans and advances that arise directly from its operations. The Company also enters into hedging transactions to cover foreign exchange exposure risk.

The Company is accordingly exposed to market risk, credit risk and liquidity risk.

The Company''s senior management oversees management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors, Risk Committee and the Audit Committee. This process provides assurance that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company''s policies and overall risk appetite. All foreign currency hedging activities for risk management purposes are carried out by a team that have the appropriate skills, experience and supervision. In addition, independent views from bankers and currency market experts are obtained periodically to validate risk mitigation decisions. It is the Company''s policy that no trading in derivatives for speculative purposes shall be undertaken.

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarised below:

Market risk

Foreign currency risk

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Company''s profit / (loss) before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material. In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Table No. 3.147

In respect of the Company''s forward derivative contracts, a 5% increase in the contract exchange rates of each of the currencies underlying such contracts would have resulted in increase in Other Comprehensive income by Rs. 769.80 million (Mar 2021 371.01 million.)

Conversely, 5% depreciation in the above mentioned exchange rates on foreign currency exposures as at March 31, 2022 and March 31, 2021 would have had the same but opposite effect, again holding all other variable constant.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

A. Trade Recievables

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12(b) & 12(f). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions)

B. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments. The Company''s maximum exposure to credit risk for the components of the balance sheet as at March 31, 2022 and 2021 is the carrying amount as illustrated in Notes 7 and 11.

Liquidity risk

Liquidity risk is the risk that the Group may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet it cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans, debt, and overdraft from both domestic and international banks at an optimised cost.

40 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholders value. The Group determines the amount of capital required on the basis of annual operating plans and longterm product and other strategic investment plans. The funding requirements are met through equity and other long-term/short-term borrowings.

44 TRANSFER PRICING ARRANGEMENTS WITH SUBSIDIARIES

The Company has international operations and in its normal course of business with its various subsidiaries it is involved in the business of software sale and implementation of its products across various countries. The Company reviews these arrangements on a periodic basis to reflect the current business models and in the current financial year has implemented a transfer pricing model to reflect its business environment. The Company has a policy of maintaining documents as prescribed by the Income-tax Act, 1961 to prove that these international transactions are at arm''s length and believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

45 IMPACT OF COVID 19

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these Standalone financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these Standalone financial statements

46. OTHER STATUTORY INFORMATION

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

(ii) The Company does not have any transactions with companies struck of

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

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

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

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

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

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

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

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

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

47. PRIOR PERIODS COMPARATIVES

Previous year figures have been re-grouped/ reclassified, where ever necessary to conform to this years classification

Mar 31, 2018

Table No. 4.36

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

Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation Estimated amount of contribution to the fund during the year ended March 31, 2018 as estimated by management is Rs. 799.80 lakhs.

Estimated amount of contribution to the fund during the Year Ended March

31, 2018, as estimated by management is Rs.7,99.80 lakhs (Previous year Rs.

5,57.11 lakhs)

Notes

(a) The estimates of future salary increases, considered in actuarial valuation, takes into account, inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market

(b) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation

1. Share based payments

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting & Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

(i) The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

Apart from the schemes provided under the Demerger arrangement the company has the following Employee stock option schemes

(i) The Company has formulated two stock option plans (Intellect Stock Option Plan 2015, Intellect Stock Option Plan 2016) of its own.

These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares.

During the current year the Company had offered rights issue to its shareholders on 17th July, 2017. Consequent to this corporate action, the market price of the shares reduced from Rs. 130.60 to Rs. 118.20. The ESOP scheme of the Company specifically requires the Compensation/Nomination & Remuneration Committee to make a fair and reasonable adjustment to the option terms in case of corporate action. Considering the above, the Nomination and Remuneration Committee of Intellect on 09th November 2017 has revised/ reduced the exercise prices of outstanding options (both vested and unvested) as on the record date i.e 18th July, 2017 by 15 %. The fair values before and after the modification have remained unchanged and there is no incremental impact in the Income statement. The option plans are summarized below:

Associate Stock Option Plan 2003

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and from the Bombay Stock Exchange on March 3, 2015. The 2003 Plan provides for issuance of 26,03,850 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees including directors of the Company. The options are granted at the market price on the date of the grant. The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The option vests over a period of 5 years from the date of grant in a graded manner, with 20% of the options vesting each year. The exercise period shall commence from the date of vesting and expires within 36 months from the last vesting date.

No compensation cost has been recorded as the scheme terms are fixed and there were no shares vesting after the transition date of April 1,

Associate Stock Option Plan 2004

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange and the Bombay Stock Exchange on February 16, 2015. The 2004 Plan provides for issuance of 8,24,645 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees, including directors. The options are granted at the market price on the date of the grant. The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The option vests over a period of 5 years from the date of grant in a graded manner, with 20% of the options vesting each year. The exercise period shall commence from the date of vesting and expires within 36 months from the last vesting date.

No compensation cost has been recorded as the scheme terms are fixed and there were no shares vesting after the transition date of April 1, 2015. A summary of the status of the options granted under 2004 plan at March 31, 2018 is presented below:

Table No. 4.52

Table No. 4.61

Intellect Stock option Plan 2015

Table No. 4.79

Table No. 4.90

2. Related party transactions 33a. List of related parties Subsidiaries

1. Intellect Design Arena Pte Ltd, Singapore (âIntellect Singaporeâ)

2. Intellect Design Arena Limited, United Kingdom (âIntellect UKâ)

3. Intellect Design Arena SA, Switzerland (âIntellect Switzerlandâ)

4. Intellect Design Arena FZ-LLC, Dubai (âIntellect Dubaiâ)

5. Intellect Commerce Limited, India (âIntellect Commerceâ)

6. Intellect Design Chile Ltda , Chile (âIntellect Chileâ) *

7. Intellect Design Arena Inc, USA (''Intellect Inc. - SEEC USâ)**

8. SEEC Technologies Asia Private Limited, India (''Seec Asia'')***

9. Laser Soft Infosystems Limited, India (âLaser Softâ)

10. Indigo TX Software Pvt Ltd, India (âIndigo TXâ)

11. Intellect Design Arena Co. Ltd, Vietnam (âIntellect Vietnamâ)

12. SFL Properties Private Ltd, India (âSFL Propertiesâ)

13. Intellect Design Arena Philippines Inc.(â Intellect Philippinesâ)**

14. Sonali Polaris FT Limited, Bangladesh (âSonali Polaris FTâ)

15. FT Grid Pte Ltd, Singapore (âFT Gridâ)**

16.Intellect Design Arena, PT Indonesia (âIntellect Indonesiaâ)** 17.Intellect Design Arena Inc.(âIntellect Canadaâ)*

18.Intellect Design Arena Limited.(âIntellect Thailandâ)** 19.Intellect Design Arena,SDN BHD.(âIntellect Malaysiaâ)** 20.Intellect Design Arena Pty Ltd.(âIntellect Australiaâ)** 21.Intellect Payments Limited (âIntellect Paymentsâ)

22.Intellect India Limited (âIntellect Indiaâ)

23. Intellect Design Arena Limited (âIntellect Kenyaâ)

* Subsidiaries of Intellect Design Arena Limited, UK ** Subsidiaries of Intellect Design Arena Pte Ltd, Singapore *** Subsidiary of Intellect Design Arena Inc., USA

Associates

1. NMS Works Software Private Limited, India (''NMS'')

2. Adrenalin eSystems Limited, India (âAdrenalin eSystemsâ)

Joint Venture

1. Intellect Polaris Design LLC,USA (âIPDLLC USAâ)

Others

(a) Enterprises that directly or indirectly through one or more intermediaries, over which Key Management Personnel is able to exercise significant influence.

1. Polaris Banyan Holding Private Ltd, India (âPolaris Banyanâ)

(b) Key management personnel (KMP)

1. Mr. Arun Jain, Chairman and Managing Director

2. Mr. S Swaminathan, Chief Financial Officer

3. Mr. Naresh VV, Company Secretary

4. Mr. Balaraman V, Independent Director

5. Mr. Arun Shekhar Aran, Audit Committee Chairman

6. Mr. Anil Kumar Verma, Director

Table No. 4.91

Terms and conditions of transactions with related parties

The sales to related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

3. Capital and other commitments Capital commitment:

Contracts yet to be executed on capital account (net of advances) Rs. 150.63 lakhs (March 31, 2017: Rs.12.42 Lakhs).

Other Commitment:

Bank guarantees in the nature of Financial guarantees (backed up by Fixed deposits) as at March 31, 2018 amounting to Rs.3,940 Lakhs.

4. Investment - Fair value

Table No. 4.93

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities

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

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

5. Hedging of foreign currency exposures

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to forecasted transactions. The Company does not use forward contracts for speculative purposes. The following are the outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2018 and March 31, 2017 including forward cover taken for forecasted revenue receivable transactions:

6. Research and Development Expenditure

During the current year ended March 31, 2018, the Company has incurred revenue expenditure of Rs 4,336.25 Lakhs (March 2017: 4,777 Lakhs). The Company continues its significant investments in Research and Development efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalising new product development, which meets the critereas of Ind AS 38 Intangible assets and has accordingly recognised such cost as Internally generated Intangible asset under âIntangible assets under developmentâ (Note 4) and Intangible asset (Note 5). During the current year ended March 31, 2018 the Company has incurred a revenue expenditure of Rs. 43,36.25 Lakhs (FY March 31, 2017 - Rs. 47,77) which has been debited to the Income statement and Capital expenditure as per table below:

We hereby furnishing the details of expenses under the respective Head of accounts which are recognised as Intangible assets under development:

7. Financial risk management objectives and policies

The Company is accordingly exposed to market risk, credit risk and liquidity risk.

The Company''s senior management oversees management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors, Risk Committee and the Audit Committee. This process provides assurance that the Companyâs financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company''s policies and overall risk appetite. All foreign currency hedging activities for risk management purposes are carried out by a team that have the appropriate skills, experience and supervision. In addition, independent views from bankers and currency market experts are obtained periodically to validate risk mitigation decisions. It is the Companyâs policy that no trading in derivatives for speculative purposes shall be undertaken.

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarised below:

Market risk

Foreign currency risk

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Company''s profit / (loss) before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material. In managementâs opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Table No. 4.97

Conversely, 5% depreciation in the above mentioned exchange rates on foreign currency exposures as at 31st March 2018 and 31st March 2017 would have had the same but opposite effect, again holding all other variables constant.

Credit risk

A. Trade Receivables

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12(c). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions) are located in several jurisdictions and industries and operate in largely independent markets.

Table No. 4.98

B. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet as at March 31, 2018 and 2017 is the carrying amount as illustrated in Notes 7, 12 and 13.

Liquidity risk

Liquidity risk is the risk that the Group may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet it cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans, debt, and overdraft from both domestic and international banks at an optimised cost.

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

8. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholders value. The Group determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and other long-term/shortterm borrowings.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

Table No. 4.101

* Includes Equity Share Capital & Other Equity

9. SCHEMEN OF ARRANGEMENT (MERGER) BETWEEN INDIGO TX SOFTWARE PRIVATE LIMITED AND LASER SOFT INFOSYSTEMS LIMITED

The Board of Directors of the Company at its meeting held on May 3, 2016 had approved a Scheme of Arrangement (âthe Scheme") enabling the merger of two of itâs subsidiaries, namely Indigo TX Software Private Limited (âITSPL") and Laser Soft Info systems Limited (âLSIL") with the Company, with an appointed date of April 1, 2016. The Scheme of Arrangement has been approved by the National Stock Exchange (NSE), the designated stock exchange on March 28, 2017 and by Bombay Stock Exchange (BSE) on March 29,2017, the creditors and by the shareholders of the Companies in the National Company Law Tribunal (NCLT) convened meeting on January 18, 2018 and is yet to be approved by the NCLT and other Statutory Regulatory authority(ies) as may be applicable and would be given effect to after receipt of all approvals in accordance with Ind AS 103 - âBusiness Combinationsâ as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules thereafter.

10. Rights Issue

The Company, vide its Letter of Offer dated July 06, 2017 offered unto 23.135.710 Equity Shares of Face Value of Rs 5/- each at a price of Rs 86/- per Rights Share including Share Premium of Rs 81/- per Equity Share for an amount aggregating to Rs 19,896.71 lakhs on Rights basis in the ratio of 5:22 (Five Rights Shares for every 22 fully paid up Equity Shares ) held by the Equity Shareholders on the record date ie July 18, 2017. The Company has allotted 23.135.710 shares on August 19, 2017. Pursuant to allotment of shares by way of rights issue, earnings per share (EPS) in respect of previous year has been restated as per Ind AS 33 - "Earnings Per Share", prescribed under Section 133 of the Companies Act, 2013.

11. Prior periods Comparatives

Previous year figures have been re grouped / reclassified, where ever necessary to confirm to this yearâs classification

Mar 31, 2017

Table No. 5.35

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

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

2. Significant accounting judgments, estimates and assumptions

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

Estimates and assumptions

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

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Share-based payments

The Company initially measures the cost of Equity-settled transactions with employees using a black schools model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 33.

Defined benefit plans (gratuity benefits)

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

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation. The underlying bonds are further reviewed for quality.

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

Further details about gratuity obligations and sensitivity analysis are given in Note 32."

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Intangible asset under development

The Company capitalizes intangible asset under development for a project in accordance with the accounting policy. Initial capitalization of costs is based on management''s judgment that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalized, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits. At 31 March 2017, the carrying amount of capitalized intangible asset under development was INR 227.22 lakhs (31 March 2016: INR Nil). Refer note 39 for details on the intangible assets under development.

3. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. A trust by name "Intellect Design Group gratuity trust" has been constituted by Intellect Design Arena Limited to administer the gratuity fund.

The following table summarizes the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Table No. 4

Estimated amount of contribution to the fund during the Year Ended March 31, 2018, as estimated by management is Rs. 5,57.11 lakhs (Previous year Rs. 4,19.02 lakhs)

Table No. 5.

Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation

Estimated amount of contribution to the fund during the year ended March 31, 2018 as estimated by management is Rs. 557.11 lakhs.

Table No. 6

Notes

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

b) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation

c) The Composition of Plan assets which is funded with Life Insurance Corporation of India is as below:

7. Share based payments

The Scheme of Arrangement (Demerger) entered into by the Company with Polaris Consulting & Services Limited (Demerged Company) with effect from April 1, 2014 provided for the following in respect of Employee Stock Option Schemes;

(i) The Company has adopted three stock option plans (ASOP 2003, ASOP 2004 and ASOP 2011) from Polaris Consulting & Services Limited, as provided in the Scheme of Arrangement.

(ii) Every employee holding an option in the Demerged Company under the stock option plans of the Demerged Company, shall be issued one option in the stock option plans formed by the Resulting Company upon the Scheme coming into effect.

(iii) The exercise price of the options in the Resulting Company shall be adjusted to 28% of the exercise price of the options granted under the Schemes of the Demerged Company.

Apart from the schemes provided under the Demerger arrangement the company has the following Employee stock option schemes

(i) The Company has formulated two stock option plans (Intellect Stock Option Plan 2015, Intellect Stock Option Plan 2016) of its own. These plans provide for the granting of stock options to employees including directors of the Company (not being promoter directors and not holding more than 10% of the equity shares of the Company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the Company by providing employees the opportunity to acquire equity shares. The option plans are summarized below:

Associate Stock Option Plan 2003

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and from the Bombay Stock Exchange on March 3,

2015. The 2003 Plan provides for issuance of 26,03,850 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees including directors of the Company . The options are granted at the market price on the date of the grant. The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The option vests over a period of

5 years from the date of grant in a graded manner, with 20% of the options vesting each year. The exercise period shall commence from the date of vesting and expires within 36 months from the last vesting date.

Table No. 8

Associate Stock Option Plan 2004

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange and the Bombay Stock Exchange on February 16, 2015. The 2004 Plan provides for issuance of 8,24,645 options, convertible to equivalent number of equity shares of Rs.5 each, to the employees, including directors. The options are granted at the market price on the date of the grant. The market price, in accordance with the Securities and Exchange Board of India (Share based employee benefits) Regulations 2014 as amended from time to time, shall be the latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted, on the stock exchange on which the shares of the Company are listed. If the Shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered. The option vests over a period of 5 years from the date of grant in a graded manner, with 20% of the options vesting each year. The exercise period shall commence from the date of vesting and expires within 36 months from the last vesting date.

Table No. 9

Associate Stock Option Plan 2011

The Plan is effective from October 9, 2014 and the Company has received in principle approval from the National Stock Exchange on February 16, 2015 and the Bombay Stock Exchange on February 19, 2015 . The 2011 Plan provides for issuance of 48,88,450 options, convertible to equivalent number of equity shares of Rs 5 each, to the employees. The plan shall be administered under 4 different schemes based on the following terms:

Table No.10

Table No. 11

Intellect Stock option Plan 2015

Table No.12

Intellect Stock option Plan 2016

The Shareholders of the Company in the Extraordinary General Meeting held on May 03, 2016 approved the Intellect Stock Option Plan 2016. The

2016 plan provides for issuance of 40,00,000 options convertible into equivalent number of equity shares of Rs 5/- each to employees but shall exclude independent directors, an employee belonging to the promoter group or a director holding more than 10% of the share capital. The tenure of the Scheme is for 12 years from the date of coming into effect and shall be extended by a period of not more than 5 years as the Board of Directors may decide. A summary of the status of the options granted under 2016 plan at March 31, 2017 is presented as below:

Table No. 13

14. Related party transactions 34a. List of related parties Subsidiaries

1. Intellect Design Arena Pte Ltd, Singapore (''Intellect Singapore'')

2. Intellect Design Arena Limited, United Kingdom (''Intellect UK'')

3. Intellect Design Arena SA, Switzerland (''Intellect Switzerland'')

4. Intellect Design Arena FZ-LLC, Dubai (''Intellect Dubai'')

5. Intellect Commerce Limited, India (''Intellect Commerce'')

6. Intellect Design Chile Ltda , Chile (''Intellect Chile'') *

7. Intellect Design Arena Inc, USA (''Intellect Inc. - SEEC US'')**

8. SEEC Technologies Asia Private Limited, India (''Seec Asia'')***

9. Laser Soft Info systems Limited, India (''Laser Soft'')

10. Indigo TX Software Pvt Ltd, India (''Indigo TX'')

11. Intellect Design Arena Co. Ltd, Vietnam (''Intellect Vietnam'')

12. SFL Properties Private Ltd, India (''SFL Properties'')

13. Intellect Design Arena Philippines Inc.('' Intellect Philippines'')**

14. Sonali Polaris FT Limited, Bangladesh (''Sonali Polaris FT'')

15. FT Grid Pte Ltd, Singapore (''FT Grid'')**

16.Intellect Design Arena, PT Indonesia (''Intellect Indonesia'')**

17.Intellect Design Arena Inc.(''Intellect Canada'')*

18.Intellect Design Arena Limited.(''Intellect Thailand'')**

19.Intellect Design Arena,SDN BHD.(''Intellect Malaysia'')** 20.Intellect Design Arena Pty Ltd.(''Intellect Australia'')** 21.Intellect Payments Limited (''Intellect Payments'')

22.Intellect India Limited (''Intellect India'')

* Subsidiaries of Intellect Design Arena Limited, UK ** Subsidiaries of Intellect Design Arena Pte Ltd, Singapore *** Subsidiary of Intellect Design Arena Inc., USA Associates

1. NMS Works Software Private Limited, India (''NMS'')

2. Adrenalin eSystems Limited, India (''Adrenalin eSystems'')

Joint Venture

1. Intellect Polaris Design LLC,USA (''IPDLLC USA'')

Others

(a) Enterprises that directly or indirectly through one or more intermediaries, over which Key Management Personnel is able to exercise significant influence, "Others"

1. Polaris Banyan Holding Private Ltd, India (''Polaris Banyan'')

(b) Enterprises that directly or indirectly through one or more intermediaries, over which Key Management Personnel is able to exercise significant influence, "Others" - Up to 2nd March 2016

1. Polaris Consulting & Services Pte Ltd, Singapore (''PCSL Singapore'')

2.Polaris Consulting & Services Inc, Canada (''PCSL Canada'')

3.Polaris Consulting & Services Limited, United Kingdom (''PCSL UK'')

4.Polaris Consulting & Services GmbH, Germany (''PCSL Germany'')

5. Polaris Consulting & Services Pty Ltd, Australia (''PCSL Australia'')

6. Polaris Consulting and Services Japan K.K , Japan (''PCSL Japan'')

7. Polaris Consulting & Services Ireland Ltd, Ireland (''PCSL Ireland'')

8. Polaris Consulting & Services B.V, Netherlands (''PCSL Netherlands'')

9. Polaris Software (Shanghai) Limited, China (''PSL China'')

10.Polaris Software Consulting & Services Sdn Bhd, Malaysia (''PCSL Malaysia'')

11. Polaris Consulting & Services KFT, Hungary (''PCSL Hungary'')

12. Optimus Global Services Limited, India (''Optimus'')

13.Polaris Consulting & Services Limited, India (''PCSL India'')

14.Polaris Consulting & Services Limited, FZ LLC (''PCSL Dubai'')

15.Polaris Consulting & Services SA (''PCSL Switzerland'')

(b) Key management personnel (KMP)

1. Mr. Arun Jain, Chairman and Managing Director

2. Mr. S Swaminathan,Chief Financial Officer

3. Mr. Naresh VV,Company Secretary

4. Mr. Balaraman V, Independent Director

5. Mr. Arun Shekhar Aran, Audit Committee Chairman

6. Mr. Anil Kumar Verma, Director

Terms and conditions of transactions with related parties

The sales to related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil, 1 April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Table No.15

Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)

16. Hedging of foreign currency exposures

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to forecasted transactions. The Company does not use forward contracts for speculative purposes. The following are the outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2017 and March 31, 2016 including forward cover taken for forecasted revenue receivable transactions:

17. Research and Development Expenditure

During the current year ended March 31, 2017, the Company has incurred revenue expenditure of Rs 4,777 Lakhs (March 2016: 8,525.86 Laths). The Company continues its significant investments in R&D efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalizing new product development, which meets the criteriaâs of Ind AS 38 Intangible assets and has accordingly recognized such cost as Internally generated Intangible asset under CWIP ( Note 4) and Intangible asset (Note 5). During the current year ended March 31, 2017 the Company has incurred a revenue expenditure of Rs. 4,777 Lakhs (FY March 31, 2016 - Rs. 8,525.86, FY March 31, 2015 - Rs. 441.63).

We hereby furnishing the details of expenses under the respective Head of accounts which are recognized as Capital Work in Progress.

Table No. 18

19. Financial risk management objectives and policies

The Company is accordingly exposed to market risk, credit risk and liquidity risk.

The Risk Committee and the Audit Committee review and agree policies for managing each of these risks which are summarized below:

Market risk

Foreign currency risk

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The impact on the Company''s pre-tax profit is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company''s exposure to foreign currency changes for all other currencies is not material. In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Table No. 20 Credit risk

A. Trade Receivables

"Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12(c). The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers (which are in the nature of reputed banking and financial institutions) are located in several jurisdictions and industries and operate in largely independent markets."

B. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet as at March 31, 2017 and 2016 is the carrying amount as illustrated in Notes 7, 12 and 13.

Liquidity risk

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

43. First-time adoption of Ind AS

These financial statements, for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Exemptions applied

Ind AS 103 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses under Ind AS that occurred before April 1, 2015. Use of this exemption means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognized under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. The Company recognizes all assets acquired and liabilities assumed in a past business combination, except (i) certain financial assets and liabilities that were derecognized and that fall under the de-recognition exception, and (ii) assets (including goodwill) and liabilities that were not recognized in the acquirer''s consolidated balance sheet under its previous GAAP and that would not qualify for recognition under Ind AS in the individual balance sheet of the acquire. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognize or exclude any previously recognized amounts as a result of Ind AS recognition requirements.

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 1, 2015.

Estimates:

The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from FVTPL - equity instruments in Non group companies and Impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2015 (i.e. the date of transition to Ind-AS) and as of March 31, 2016.

The company has measured its investment in equity instruments of subsidiaries, joint ventures and associates as the previous GAAP carrying amount for determining the deemed cost.

Leases:

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

Classification and measurement of financial assets:

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exists at the date of transition to Ind AS. Accordingly, classification and measurement of bonds, debentures, government securities, commercial papers, certificate of deposits has been based on the facts and circumstances that exists at the date of transition to Ind AS.

17. SCHEMEN OF ARRANGEMENT (MERGER) BETWEEN INDIGO TX SOFTWARE PRIVATE LIMITED AND LASER SOFT INFOSYSTEMS LIMITED

The Board of Directors of the Company at its meeting held on May 21, 2015 have approved a Scheme of Arrangement (âthe Scheme") enabling the merger of two of its wholly owned subsidiaries, namely Indigo TX Software Private Limited (âITSPL") and Laser Soft Info systems Limited(âLSIL") with the Company, with effect from April 1, 2015 (âAppointed Date"). Subsequently the Board of directors in its meeting held on May 3, 2016 had revised the appointed date of merger to April 1, 2016. The Scheme of Arrangement is yet to be approved by the respective shareholders'' of all three companies, the creditors of the subsidiaries, the High Court of Madras or the National Company Law Tribunal (as the case may be) and such other statutory / regulatory authority(ies), as may be applicable before it is given effect to.

18. Rights Issue

The Board of Directors of the Company approved filing of a Draft Letter Of Offer in connection with a proposed offering of equity shares of the Company of face value of Rs 5/- for an aggregate amount of Rs 20,000 Lakhs. The DLOF was filed with Securities Exchange Board of India (SEBI) / Stock exchanges on January 27, 2017 and has been approved by SEBI on April 13, 2017. The company has incurred an expenditure of Rs.102 Lakhs towards the Rights Issue transaction which has been classified as "other current assets" in the financial statements (Refer note 17 of Annexure VI), such costs would be accounted for as a deduction from equity (net of any related income tax benefit) upon completion of the equity transaction.

Note 47, 48 & 49

Ind AS 101 requires an entity to reconcile equity, total comprehensive income for prior periods. The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

(i) Redeemable Preference Shares

Investments in redeemable preference shares of associates were carried at cost under Indian GAAP. Investments in preference shares of associates, which are classified as investment in debt instruments of associates under Ind AS, carrying coupon below market rate of interest are required to be measured and carried at fair value. The excess of principal amount over its fair value will be added to the cost of investment in equity instruments of the associate entities. The interest income thereby on such instruments will be accreted on the fair value recognized on inception to bring the fair value to the principal amount that will be repaid.

(ii) Investment in Mutual Funds

Under IGAAP, investments in liquid mutual funds were carried at cost or net realizable value, whichever is less. Under Ind AS, such investments are measured at fair value through profit or loss

(iii) Trade receivables

Under Indian GAAP, the Company has created provision for impairment of receivables that consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Due to ECL model, the Company has impaired its trade receivables by Rs 273.63 lakhs on April 1, 2015, which has been eliminated against retained earnings.

(iv) Share-based payments

Under Indian GAAP, the Company recognized only the intrinsic value for the long-term incentive plan as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. The Company has given effect of Rs 1,399.11 lakhs to opening balance sheet as on April 1, 2015.

(v) MAT Credit adjustment

Under Indian GAAP, the Company recognized its MAT credit assets under other noncurrent assets. Ind AS requires it to be recognized in Income tax assets (net). MAT Credit are reclassified from Non Current Assets as shown in previous Indian GAAP and presented separately amounting to Rs 604.65 lakhs.

(vi) Interest free security deposits

Under IGAAP, interest-free deposits were carried at transaction cost. Under Ind AS, interest-free deposits paid will be required to be measured and carried at fair value. The excess of principal amount over its fair value will be considered as prepaid expense and will be amortized over the period of deposit on straight line basis. The interest income arising there on will be accreted on the fair value recognized on inception to bring the fair value to the principal amount that will be repaid.

An amount of Rs 3.25 lakhs has been recognized against corresponding adjustment to Retained Earnings.

(i) Redeemable Preference Shares

Investments in redeemable preference shares of associates were carried at cost under Indian GAAP. Investments in preference shares of associates, which are classified as investment in debt instrument of associates under Ind AS, carrying coupon below market rate of interest are required to be measured and carried at fair value. The excess of principal amount over its fair value will be added to the cost of investment in equity instruments of the associate entities. The interest income thereby on such instruments will be accreted on the fair value recognized on inception to bring the fair value to the principal amount that will be repaid.

(ii) Investment in Mutual Funds

Under IGAAP, investments in liquid mutual funds were carried at cost or net realizable value, whichever is lesser. Under Ind AS, such investments are measured at fair value through profit or loss.

(iii) Trade receivables

Under Indian GAAP, the Company has created provision for impairment of receivables that consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Due to ECL model, the Company impaired its trade receivables by Rs 513.63 lakhs on April 1, 2016, which has been eliminated against retained earnings.

i) Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by Rs. 81.48 Lakhs.

(ii) Share-based payments

Under Indian GAAP, the Company recognized only the intrinsic value for the long-term incentive plan as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. An additional expense of Rs.448.11 lakhs has been recognized in profit or loss account for the year ended 31 March 2016.

Due to ECL model, the Company has impaired its trade receivable by the amount, which has been eliminated against retained earnings.

(iv) Share-based payments

The Company holds investments held for sale. Under Indian GAAP, the Company has classified it as other current assets. Under Ind AS, the same is required to be classified as Investment in subsidiary.

(v) Interest free security deposits

Under IGAAP, interest-free deposits were carried at transaction cost. Under Ind AS, interest-free deposit paid will be required to be measured and carried at fair value. The excess of principal amount over its fair value will be considered as prepaid expense and will be amortized over the period of deposit on straight line basis. The interest income arising there on will be accreted on the fair value recognized on inception to bring the fair value to the principal amount that will be repaid.

An amount of Rs 5.27 lakhs has been recognized against corresponding adjustment to Retained Earnings.

(vi) Under Indian GAAP, the Company recognized only the intrinsic value for the long-term incentive plan as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. The Company has given effect of Rs 1,847.22 lakhs to balance sheet as on April 1, 2016.

(iii) Other comprehensive income

Under Indian GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

Under Indian GAAP, the company had measured the investments lower of cost or fair value. Ind AS requires debt investments held for liquidity purposes to be measured at fair value and differences are recognized immediately in the profit or loss account

(iv) Investment in Mutual Fund

Under IGAAP, investments in liquid mutual funds were carried at cost or net realizable value, whichever is less. Under Ind AS, such investments are measured at fair value through profit or loss. An additional expense of Rs 82.32 lakhs has been recognized in profit or loss for the year ended 31 March 2016.

(v) Redeemable Preference Shares

Investments in redeemable preference shares of associates were carried at cost under Indian GAAP. Investments in preference shares of associates, which are classified as investment in debt instrument of associates under Ind AS, carrying coupon below market rate of interest are required to be measured and carried at fair value. The excess of principal amount over its fair value will be added to the cost of investment in equity instruments of the associate entities. The interest income thereby on such instruments will be accreted on the fair value recognized on inception to bring the fair value to the principal amount that will be repaid. An income of Rs 53.90 lakhs has been recognized in profit or loss for the year ended 31 March 2016.

(vi) Interest free Security Deposits

(vii) Trade receivables - Expected Credit loss

Under Indian GAAP, the Company has created provision for impairment of receivables that consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Due to ECL model, the Company impaired its trade receivable by Rs 240 lakhs for the year ended March 31, 2016.

18. Prior periods Comparatives

Previous year figures have been re grouped/ reclassified, where ever necessary to conform to this yearâs classification

Mar 31, 2016

1. Capital Commitments (Ref Standalone Annual Report Note No:21)

The estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) as at March 31, 2016 is Rs 567.45 lakhs (March 31, 2015 : Rs 647.77 Lakhs)

2. Research and Development Expenditure (Ref Standalone Annual Report Note

No:29)

The Company continues its significant investments in R&D efforts towards research, technology, engineering and new product development. The Company follows a policy of capitalising new product development, cost effective 1st January 2016 and accordingly has recognized such Cost as Capital work in progress to be capitalized in future. During the current year the Company has incurred a revenue expenditure of Rs. 85,25.86 lakhs and a capital expenditure of Rs 27,95.10 lakhs (FY 15 Rs 18.87 lakhs) including capital work in progress Rs 12,27.00 lakhs (FY 15 NIL).

3. Segment reporting (Ref Standalone Annual Report Note No:32)

The Company has only one reportable segment ''Software product licence and related services'' in terms of Accounting Standard 17 ''Segment Reporting'' manadated by Section 133 of Companies Act 2013 read with General Circular 8/2014 issued on April 4, 2014. Secondary segmental reporting is based on the geographical location of customers.

The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments.

Secondary segment information

Customer relationships are driven based on the location of the respective client. The geographical segments comprise:

a) India, Middle East & Africa;

b) Asia Pacific;

c) Europe; and

d) Americas

e)

4. Scheme of Arrangement (De-merger) between the Company and Polaris Consulting & Services Limited (Ref Standalone Annual Report Note No:33)

During the previous year the Company (Resulting Company) had entered into a Scheme of Arrangement with Polaris Consulting & Services Limited (''demerged company'', ''Polaris Consulting''). The "Scheme of Arrangement" (''the Scheme'') involved vesting of the Product Business Undertaking of the demerged company into Intellect Design Arena Limited. In consideration for the vesting of the Product business undertaking in the Company as per the terms of the Scheme, each member of the demerged company shall receive one equity share of Rs 5/- each in the resulting company for every one equity share of Rs 5/- each held in the demerged company.

The Scheme was approved by the Honorable High Court of Madras on September 15, 2014. The Company has filed the order approved by the High Court with the Registrar of the Companies, Chennai (ROC) on September 24, 2014. The ROC had approved the said demerger on September 25, 2014. The Scheme has accordingly been given effect to in these financial statements with retrospective effect from April 1, 2014.

Further, the Scheme also provided that the shareholders could elect to receive one Non-Convertible Debentures of Rs 42 each in the Company for one equity share of Rs 5/- each being issued and alloted to the shareholders. The option to receive the Non- Convertible Debentures was to be offered within 12 days from the Second Record Date (which was determined by the management of the Company as January 19, 2015). None of the shareholders have opted for the conversion to Non-Convertible Debentures.

The following assets and liabilities have been divested into the Company from Polaris Consulting & Services Limited with effect from April 1, 2014 pursuant to the Scheme.

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