Sr.

No

Key Audit Matter

How the Key Audit Matter was addressed in our audit

1

Revenue recognition - fixed price contracts

Refer Note 2(e) to material accounting policies,

Our audit procedures in respect of this area included among others, the following:

Note 23 and Note 44 to the standalone

1. Obtained an understanding of the systems, processes and

financial statements.

controls implemented by the Company with respect to recognition of actual cost incurred on each contract, estimation

The Company engages in fixed price contracts

of future cost to completion, measurement of unbilled

with its customers wherein revenue from such

revenue, unearned revenue and the total contract revenue on

contracts is recognized over time. The Company uses input method to recognize revenue, as it

its completion.

represents efforts expended towards satisfying

2. Involved Information technology ('IT') specialists to assess

a performance obligation relative to the

the design and operating effectiveness of the key IT controls

total expected efforts or inputs to satisfy the

relating to revenue recognition and in particular:

performance obligation.

• Assessed the IT environment in which the business systems

This involves computation of actual cost incurred

operate and tested system controls over computation of

and estimation of total cost on each contract to

revenue recognized.

measure progress towards completion.

• Tested the IT controls over appropriateness of cost and

Amount of revenue recognition in respect of fixed price contracts has been identified as a Key Audit Matter considering that:

revenue reports generated by the system.

Sr. Key Audit Matter No

How the Key Audit Matter was addressed in our audit

• these contracts involve identification of

• Assessed the appropriateness of actual cost incurred on

actual cost incurred on each contract;

contracts including the testing the IT general controls and specific IT application controls over information systems

• these contracts require estimation

used for capturing these costs and

of future cost for completion of each

contract; and

• Tested the controls pertaining to allocation of resources and budgeting systems which prevent the unauthorized

• at the period end a significant amount

recording/changes to costs incurred on sample basis.

of contract assets (unbilled revenue) or

contract liabilities (unearned revenue)

3.

Verified on test check basis whether the revenue recognized is

related to each contract is to be

in accordance with the applicable Indian Accounting Standard,

identified.

including:

For the year ended March 31,2024, revenue

• Verification of the underlying agreements and other forms

from fixed price contracts amounts to Rs.

of supporting documentation to ensure that each party's

33,375 million.

rights and obligations regarding the goods or services to be transferred and payment terms are identified and contracts have commercial substance.

• Inspection of the underlying agreements and other forms of supporting documentation to ensure that various performance obligations within a contract have been properly identified by management.

• Inspection of the underlying agreements and other forms of supporting documentation to ensure that transaction price has been properly determined and allocated to relevant performance obligations on an appropriate basis.

• Verification of the Company's computation of revenue to be recognized over a period of time on a sample basis, where we performed the following:

^_ Verified management's process relating to the estimation of contract costs required to complete the respective projects and assessed that the estimates of costs to complete were reviewed and approved by appropriate designated management personnel and are appropriate.

^_ Verified the reasonableness of management's estimation of cost projections by comparing actual cost incurred with management initial/updated estimation of total cost for that project.

^_ Recomputed the amount of revenue recognised on these contracts and compared the same with the actual revenue recorded and

^_ Assessed the appropriateness of work in progress (contract assets and contract liabilities) as at the balance sheet date by evaluating the underlying documentation to identify possible delays in achieving milestones which require changes in estimated costs to complete the remaining performance obligations.

4.

Assessed the adequacy and appropriateness of disclosures made in standalone financial statements in compliance with applicable Indian Accounting Standards and applicable financial reporting framework.

Sr.

No

Key Audit Matter

How the Key Audit Matter was addressed in our audit

2

Derivative financial instruments and

Our audit procedures in respect of this area included among

hedge accounting

others, the following:

Refer Note 2(m)(iii) to material accounting

1.

Obtained understanding of the Company's overall hedge

policies, Note 7, Note 14, Note 18, Note 20, and

accounting strategy, forwards and options valuation

Note 36 to the standalone financial statements.

methodologies and hedge accounting process from initiation to settlement of derivative financial instruments including

The Company enters into derivative financial

assessment of the design and implementation of controls and

instruments like forward and option contracts to manage its exposure of foreign currency

tested the operating effectiveness of these controls.

risk of highly probable forecasted transactions

2.

Assessed whether the Company's accounting policy for

which arise during the normal course of its

hedge accounting is in accordance with the applicable Indian

business.

Accounting Standards.

Derivative financial assets and derivative

3.

Verified the assertion relating to existence of the derivative

financial liabilities measured at fair value

contracts outstanding as at March 31, 2024 by obtaining

amounted to INR 1,353 million and INR 66

independent balance confirmations from the respective

million respectively as at March 31, 2024. The

counterparties, verification on a sample basis the underlying

net movement of cashflow hedge reserve (net of

agreements and other forms of supporting documentation

taxes) recorded in other comprehensive income

and verification of supporting documentation for subsequent

for the year ended March 31, 2024, amounted

realisation or settlement after the end of the reporting year.

to INR 519 million.

4.

Verified the assertion relating to completeness of derivative

In order to apply hedge accounting,

transactions by requesting confirmation from counterparties

management is required to demonstrate that

who are frequently used but with whom the accounting

the underlying contract is considered to be a

records indicate there are presently no derivatives, reading

highly probable forecasted transaction, that

other information, such as minutes of meetings of the

the hedges are effective and maintain adequate

board of directors or other relevant committees, inspecting

hedge documentation. A degree of subjectivity

documentation in paper or electronic form for activity

is also required to determine when hedge accounting is to be considered as ineffective.

subsequent to the end of the reporting period.

Fair value movements of the forward and

5.

Verified the assertion relating to existence and accuracy by

option contracts are driven by movements in

inspecting on a sample basis the underlying agreements and

financial markets. These transactions may have

other forms of supporting documentation.

a significant financial effect and have extensive accounting and reporting obligations and accordingly, this is considered as a Key Audit

6.

Verified management's hedge documentation and underlying hedge contracts, on a sample basis.

Matter.

7.

Verified management's expectation at the inception of the hedge that the hedging relationship will be highly effective and its periodic assessment of the ongoing effectiveness of the hedging relationship in accordance with the applicable Indian Accounting Standards.

8.

Verified that the amounts reclassified from cash flow hedge reserve to the Statement of Profit and Loss as a reclassification adjustment being in the period in which the cash flows of the hedged items affect Profit or Loss.

9.

Re-performed the year-end fair valuations including evaluation of hedge effectiveness of derivative financial instruments on a sample basis and compared these valuations with those recorded by the Company.

10.

Assessed the adequacy and appropriateness of disclosures made in standalone financial statements in compliance with applicable Indian Accounting Standards and applicable financial reporting framework.

Sr. Key Audit Matter No

How the Key Audit Matter was addressed in our audit

3 Business Combination under Common

Our audit procedures in respect of this area included among

Control - Business Acquisition of Smart

others, the following:

World and Communication (SWC) Business

1.

Obtained and read the business transfer agreement to assess

a Larsen & Toubro (L&T) business unit by

whether the acquisition meets the definition of business as per

the Company.

the guidance given in Ind AS 103 Business combination.

Refer Note 2(v) to material accounting policies,

Note 45 to the standalone financial statements.

2.

Ensured that the acquisition meets the definition of common

control, to be accounted for as per the requirements of

The Company has completed the acquisition

Appendix C: Business combinations of entities under common

of SWC business of L&T on April 1, 2023. The

control of Ind AS 103.

acquisition has been accounted under the

'pooling of interest' method in accordance

3.

Ensured that the prior year financial information has been

with Appendix C of Ind AS 103 - 'Business

appropriately restated, to reflect the results of the SWC division,

Combinations' of entities under common

as per the requirements of Appendix C: Business combinations

control.

of entities under common control of Ind AS 103.

The carrying value of assets and liabilities of SWC

4.

Ensured that the accounting policies and the basis of

as at April 01, 2022, before business acquisition

accounting estimates of the SWC division are consistent with

has been incorporated in the standalone

that of Company for like transactions and other events in

financial statements of the Company.

similar circumstances.

Accordingly, the Company has restated

5.

Verified that the consideration paid for acquisition of business

its previously issued standalone financial

is appropriately accounted for, as per the requirements of

statements for the year ended March 31, 2023.

Appendix C: Business combinations of entities under common

Considering the magnitude and complexity in

control of Ind AS 103.

accounting for this transaction, the aforesaid

6.

Assessed the adequacy and appropriateness of disclosures

business combination accounting treatment

and related disclosure in standalone financial

statements has been considered to be a key

audit matter.