On May 6, 2022, the Company entered into a Business Transfer Agreement (BTA) to acquire specified business of Klaus IT Solutions Private Limited ('Klaus IT’) relating to provision of professional services being engineering, software and IT for an upfront cash consideration of ? 850. Klaus IT’s business has been acquired by the Company effective April 30, 2022 on completion of the closing conditions under the BTA and has been consolidated with effect from that date.

The fair value of the purchase consideration of ? 850 has been paid upfront. The fair value of net assets acquired on the acquisition date amounted to ? 740. The excess of purchase consideration over the fair value of the net assets acquired has been attributed towards goodwill of ? 110 and it also entails the movement of manpower to the Company. Goodwill arising on the acquisition is not deductible for tax purposes. 'Klaus IT’ has contributed revenues amounting to ? 612 and profit amounting to ? 105 to the Company’s performance for the year ended March 31, 2023. If the acquisition had taken place at the beginning of the year, revenues would have been ? 667 and the profit would have been ? 115.

Impairment testing of Goodwill:

The Company tests goodwill for impairment on an annual basis. The recoverable value of Klaus IT is determined based on value-in-use calculation using the cash flow projections prepared by the management covering 5 year period.

The estimated value-in-use of Klaus IT is based on the future cash flows using annual growth rate of 4% and discount rate of 20% for periods subsequent to the forecast period of 5 years. An analysis of the sensitivity to a change in key parameters (i.e. operating margin, discount rates and long term average growth rate), based on reasonably probable assumptions, did not identify any probable scenario in which the recoverable amount of Klaus IT would decrease below its carrying amount.

#3. In the year ended March 31,2020, Company’s subsidiary, Cyient Solutions and Systems Private Limited ('CSS’) has recognised one-time charge of ? 222 relating to costs incurred on development of UAV systems in view of the potential delays in materialization of orders. Accordingly, a corresponding provision for impairment of the loan given to CSS of? 311 has been recognised in the Statement of Profit and Loss in the year ended March 31, 2020.

Expected credit loss (ECL):

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The credit period is ranges between 30- 120 days. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer’s credit quality and defines credit limits for each customer. Limits and scoring attributed to customers are reviewed once a year.

As a practical expedient (Ind AS 109 B5.5.35), the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. Accordingly, the Company creates provision for past due receivables less than 365 days ranging between 1%-20% and 100% for the receivables due beyond 365 days. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

(d). Rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having a par value of ? 5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

(e) . Buyback of Equity shares:

Aggregate number of equity shares bought back during the period of previous five years : 3,123,963 (March 31, 2023: 3,123,963).

(f) . Purchase of Treasury shares:

The Company has constituted a 'Cyient Associate Stock Option Plan 2021 Trust ('Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year 2021-22, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(g) (i). Associate Stock Option Plans: (equity settled)

Associate Stock Option Plan - 2008 (ASOP 2008):

The Company instituted ASOP 2008 in July 2008 and earmarked 1,000,000 equity shares of ? 5 each for issue to the employees under ASOP. The Company modified ASOP 2008 and adjusted the number of options and exercise price on account of bonus issue 1:1 during financial year 2010-11. Under ASOP 2008, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Associate Stock Option Plan - 2015 (ASOP 2015):

The Company instituted ASOP 2015 in July 2015 and earmarked 1,200,000 equity shares of ? 5 each for issue to the employees under ASOP. Under ASOP 2015, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of third year.

Associate Restricted Stock Units Scheme 2020 (ARSU 2020):

The Company has instituted the ARSU’s 2020 plan earmarking 1,050,000 equity shares of? 5 each which provided for grant of Restricted Stock Units ('RSUs’) to eligible associates of the Company and its subsidiaries. The Exercise price shall be ? 5 each. The Board of Directors recommended the establishment of the plan on January 16, 2020 and the shareholders approved the recommendation of Board of Directors on March 5, 2020 through a postal ballot. The RSUs will vest over a period of three years from the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 30% at the end of first year, 50 % after two years, 20% at the end of third year.

Associate Stock Option Scheme 2021 (ASOP 2021):

The Company has instituted the ASOP 2021 scheme and also incorporated 'Cyient Associate Stock Option Scheme 2021 Trust’ (Trust), whereunder shares were purchased from the stock exchanges through the Trust. KP Corporate Solutions Limited, Corporate Trustee, has been appointed as trustee for this Trust. Shareholders of the Company have approved the Scheme and the formation of Trust through postal ballot on February 23, 2021. During the year ended March 31, 2022, Trust purchased 1,079,000 shares. The Exercise price shall be ? 5 each. The options will vest over a period of 3 years equally from the grant date.

Associate Stock Option Plan - 2023 (ASOP 2023):

The Company instituted ASOP 2023 in June 2023 and earmarked 1,200,000 equity shares of ? 5 each for issue to the employees under ASOP. Under ASOP 2023, options will be issued to employees at an exercise price, which shall not be less than the market price on the date of grant. These options vest over a period ranging from one to three years from the date of grant, starting with 33% at the end of first year, 33% at the end of second year and 34% at the end of third year.

(g) (ii). Fair value of stock options granted during the year:

The weighted average fair value of the share options during the year is ? 424 - ?1,892 (March 31, 2023: ? 61.69 - ?791.85). Options and RSUs were priced using Black Scholes pricing model. Where relevant, the expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility over the past years.

Nature of reserves:(a) Capital redemption reserve

Represents the nominal value of equity shares bought back pursuant to Buyback in accordance with Section 69 of the Companies Act, 2013.

(b) Securities premium

Amounts received on issue of shares in excess of the par value has been classified as securities premium. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

This represents appropriation of profit by the Company. General reserve is appropriated for the creation of capital redemption reserve upon Buyback of equity shares pursuant to section 69 of the Companies Act, 2013.

(d) Share-based payments reserve

The share-based payments reserve is used to record the value of equity-settled share-based payment transactions with employees. The amounts recorded in this account are transferred to securities premium upon exercise of stock options by employees.

(e) Cash flow hedge reserve

Represents effective portion of gains and loss on designated portion of hedging instruments in a cash flow hedge, net of tax.

(f) Special Economic Zone ('SEZ') re-investment reserve

Represents amount transferred to the SEZ reinvestment reserve. The reserve has been created out of the profits of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act, 1961 and shall be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of Section 10AA(2) of the Income-tax Act, 1961.

(g) Retained earnings

(i) Retained earnings comprises of prior years’ undistributed earnings after taxes along with current year profit, net of dividends declared.

(ii) Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in other comprehensive income. These are presented within retained earnings.

(h) Treasury shares

'The Company has constituted a 'Cyient Associate Stock Option Plan 2021 Trust ('Trust’), to grant, offer and issue options to the employees of the Company and its subsidiaries. During the year 2021-22, the Trust has acquired 1,079,000 equity shares from the secondary market amounting to ? 950 based on the loan received from the Company. The Company has treated the Trust as its direct extension, such that the assets and liabilities of the Trust are included in the standalone financial statements and the shares acquired/held by the Trust are classified as "Treasury Shares".

(i) Equity instruments through OCI

Represents the cumulative gains and loss arising from fair valuation of the equity instruments measured at the fair value through OCI, net of amounts reclassified to retained earnings when the investments have been disposed off.

(j) Share application money pending for allotment

Represents amount received from associates on exercise of stock options, pending allotment.

(k) Capital Reserve

Represents the difference between the carrying amount and the consideration received upon reissuance of Treasury Shares.

i. Defined Benefit Plans - Gratuity

In accordance with the 'Payment of Gratuity Act, 1972’ of India, the Company provides for gratuity, a defined retirement benefit plan (the 'Gratuity Plan’) covering eligible employees. Liabilities with regard to such gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss in the year determined. The gratuity plan is administered by the Company’s own trust which has subscribed to the "Group Gratuity Scheme" of Life Insurance Corporation of India.

The present value of the defined benefit obligation (DBO), and the related current service cost and past service cost, were measured using the projected unit credit method.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

Sensitivity analysis:

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

The expected contribution to the plan is ? 300 (March 31, 2023: ? 359)

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 3.96 years (March 31, 2023: 3.31 years).

Composition of plan assets:

Plan assets comprise of100% insurer managed funds. Fund is managed by Life Insurance Corporation as per Insurance Regulatory and Development Authority of India (IRDA) guidelines, category wise composition of the plan assets is not available.

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at year-end as per Company’s policy. The value of such leave balance eligible for carry forward, is determined by an independent actuarial valuation and charged to statement of profit and loss in the year determined.

The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company’s past compensation revision trends and management’s estimate of future salary increases. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

c) Long Service Leave - Australia:

The regulations of long service leave are applicable to the associates of the Company employed at its Australia Branch. The accrual of long service leave is in addition to the compensated absences to which the associates are entitled to. These long service leaves are dependent on the tenure of the employee with the same employer and are regulated by respective state laws.

The disclosures in respect of the amounts payable to such enterprises as at March 31, 2024 and March 31, 2023 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

During the year, the Company has opted for the application of lower tax rate of 22% (excluding surcharge and cess thereon) under the provisions of the section 115BAA of Income Tax Act, 1961.

In the previous year the difference between the tax rate enacted in India and the effective tax rate of the Company is primarily on account of the benefit availed on the profits of the undertakings situated in Special Economic Zones (SEZ).

Contract assets:

During the year ended March 31, 2024, ? 1,634 of contract assets as at March 31, 2023 has been reclassified to receivables on completion of performance obligation. During the year ended March 31, 2023, ? 1,112 of contract assets as at March 31, 2022 has been reclassified to receivables on completion of performance obligation.

Contract liabilities:

a) Unearned revenue: During the year ended March 31, 2024 the Company has recognized revenue of ? 142 arising from contract liabilities as at March 31, 2023. During the year ended March 31, 2023, the Company recognized revenue of? 148 arising from opening unearned revenue as at March 31, 2022.

b) Advance from customers: During the year ended March 31, 2024 the Company recognised revenue of ? 270 arising from advance from customers as at March 31, 2023. During the year ended March 31, 2023 the Company recognised revenue of ? 56 arising from advance from customers as at March 31, 2022.

The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts, where the original contract duration is one year or less or where the entity has the right to consideration that corresponds directly with the value of entity’s performance completed to date. Consequently, disclosure related to transaction price allocated to remaining performance obligation is not material.

#1.Contribution to provident fund and other funds Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the Fund administered and managed by the Government of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 587 (March 31, 2023: ? 520).

Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity: ? 197 (March 31, 2023: ? 171). [refer note 12 (i)]. National Pension Scheme:

Amount recognised in statement of profit and loss in respect of national pension scheme ? 26 (March 31, 2023: ? 19) Superannuation fund - India:

The employees receive benefit under a Superannuation scheme which is a defined contribution scheme wherein the employee has an option to choose the percentage of contribution between 5% to 15% of the basic salary of the covered employee. These contributions are made to a fund administrated by Life Insurance Corporation of India. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 24 (March 31, 2023: ? 24).

Employees' State Insurance Scheme:

Amount recognised in the statement of profit and loss in respect of Company’s contribution to employees’ state insurance scheme ? 13 (March 31, 2023: ? 22).

#2.Superannuation fund - Australia

The employees at the Australia branch of the Company are also covered under a superannuation scheme. The Company contributes 9.5% of the basic salary of the employee. The Company’s monthly contributions are charged to the statement of profit and loss in the year they are incurred. Total expense recognised during the year aggregated ? 4 (March 31, 2023: ? 4).

#1. Expenditure for Corporate Social Responsibility:

The Company contributes towards Corporate Social Responsibility (CSR) activities through Cyient Foundation and Cyient Urban Micro Skill Centre Foundation (refer note 24). The Company has formed CSR committee as per Section 135 of the Companies Act, 2013 to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified by law. The areas for CSR activities are promoting education, adoption of schools, facilitating skill development, medical and other social projects. Expenses incurred on CSR activities through Cyient Foundation and contributions towards other charitable institutions are charged to the statement of profit and loss under 'Other Expenses’: ? 115 (March 31, 2023 - ? 81).

Nature of CSR activities:

Quality ofEducation, IT / Digital Literacy, Skill Development and Employment, Women Empowerment and Sustainable Livelihood, Community Development and Environmental Protection, Preventive Healthcare and Innovation and Entrepreneurship.

#2. Expected credit loss:

Provision for expected credit loss allowance includes allowance on other financial assets ? (111) ( March 31, 2023: ? 112) .

(i) The Company disputed various demands raised by income tax authorities for the assessment year 2017-18 (March 31, 2023- 2017-18, 2018-19) which are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is ? 3 (March 31, 2023 - ? 6). The Company is confident that these appeals will be decided in its favour.

(ii) The Company disputed various demands raised by the sales tax authorities for the financial years 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017) (March 31, 2023: 2004-05 to 2009-10 and 2015-16 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? Nil (March 31, 2023 : ? 21).

(iii) The Company disputed various demands raised by the service tax authorities for the financial years 2006-07 to 2009-10, 2013-14 to 2017-18 (till June 2017) (March 31, 2023: 2013-14 to 2017-18 (till June 2017)). The Company filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is ? 548 (March 31, 2023: ? 371). The Company is confident that these appeals will be decided in its favour. The above does not include show cause notices received by the Company.

(iv) The Company is contesting certain pending service tax refunds amounting to ? 29 (March 31, 2023: ? 29) at various appellate authorities. The Company is confident that these appeals will be decided in its favour.

(v) The Company disputed demands raised by the GST authority for the financial years 2017-18 to 2020-21. The company is yet to file an appeal with the appropriate authorities. The aggregate amount of disputed tax not provided is ? 87 (March 31, 2023: Nil). The Company is confident that these appeals will be decided in its favour. The above does not include show-cause notices received by the Company.

(vi) During the financial year 2015-16, the Government of India notified an amendment to the Payment of Bonus Act, 1961 whereby the applicable slabs as well as coverage limit was enhanced. The said amendment was made effective April 1, 2014. The Company is contesting the retrospective applicability of the amendment for the financial year 2014-15 in the High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh. The aggregate amount of liability pertaining to the financial year 2014-15, not provided for is ? 92 (March 31, 2023: ? 92).

(C) The Company has certain outstanding commitments as at March 31, 2024 and March 31, 2023. Further, the Company has certain commitments to bankers relating to receivable factoring arrangements entered with them in respect of receivables from few customers. These factoring arrangements are without recourse to the Company and in the normal course of business. The Company is confident of meeting these commitments arising from such arrangements.

#1. Cyient Australia Pty Limited holds 86% of shareholding in Cyient KK and Cyient Limited holds the remaining 14% shareholding.

#2. On March 05, 2024, Cyient DLM Limited incorporated a wholly-owned subsidiary in the United States of America namely Cyient DLM Inc.

#3. The Board of Directors of the Company at their meeting held on October 14, 2021 approved the closure of its wholly owned subsidiary, Cyient Israel India Limited ('CML') in line with its strategy and simplification of legal entity structure.

#4. From May 1, 2022, Cyient Singapore Private Limited, acquired 100% of equity shares of Grit Consulting Pte Ltd.

#5. From June 30, 2022, Cyient Europe Limited, acquired 100% of equity shares of Celfinet - Consultoria em Telecomunicacoes, S.A.(and its wholly owned subsidiaries Metemesonip, Unipessoal Lda; Celfinet UK Telecommunications Consulting Services Ltd; Celfinet Espana - Consultoria en Telecomunicaciones, SL; Celfinet (Brasil) - Consultoria em Telecomunicacoes, Ltda.; Celfinet Mozambique - Consultoria em Telecomunicacoes, Limitada and Celfinet Mexico - Consultoria de Telecomunicaciones AS).

#6. From September 1, 2022, Cyient Europe Limited, acquired 100% of equity shares of Sentiec Oyj (and its wholly owned subsidiaries Citec Group Oy Ab; Cyient Oy Ab; Citec Engineering France Sarl; Cyient Engineering AB; Cyient Information & Engineering GmbH; Cyient Group France SAS; Akilea Overseas Ltd and Cyient Norway AS).

#7. Cyient Limited, acquired 100% of equity shares of Citec Engineering India Private Limited on September 1, 2022. Further, on October 19, 2023, Cyient Limited has transferred 100% of shareholding to Cyient Insights Private Limited as a part of strategic business consolidation. Thus, Citec Engineering India Private Limited has become a wholly owned subsidiary of Cyient Insights Private Limited.

#8. On October 10, 2018, the Company incorporated Cyient Urban Micro Skill Centre Foundation ('Cyient Urban’), a wholly owned Section 8 Company under the Companies Act, 2013, to further the CSR activities of the Company. The objective is not to obtain economic benefits through the activities of Cyient Urban and accordingly it has been excluded for the purpose of preparation of consolidated financial statements.

#9. From February 27, 2024, Cyient Limited incorporated a wholly-owned subsidiary in India namely Cyient Global Captive Solutions Private Limited.

#10. On July 7, 2022 Celfinet - Consultoria em Telecomunicacoes, S.A. incorporated a wholly-owned subsidiary Celfinet Germany - Telecommunications Consulting Services GmbH.

The management assessed that fair value of cash & cash equivalents and Bank balances other than cash and cash equivalents, trade receivables, other financial assets, loans, trade payables, lease liabilities and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments, and hence these are carried at amortised cost.

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.

Investment in unquoted equity shares are measured at fair value through initial designation in accordance with Ind-AS 109. Investments in mutual funds and derivative assets/ (liabilities) are mandatorily measured at fair value.

27.3 Fair value hierarchy Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an 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 have been no transfers among Level 1, Level 2 and Level 3 during the year ended March 31, 2023.

The following methods and assumptions were used to estimate the fair values:

#1. The fair values of the unquoted equity shares and CCPS have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth, discount rate, and probabilities of the various estimates within the range used in management's estimate of fair value for these unquoted equity investments.

#2. The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, etc. As at March 31, 2024 the marked-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had insignificant impact on the hedge effectiveness assessment for derivatives designated in hedge relationships.

27.4 Financial risk management Objectives and policies Financial risk factors

The Company’s principal financial liabilities, other than derivatives, comprise of lease obligation, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include security deposits, investments, trade and other receivables and cash and cash equivalents that is derived directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions for hedging purpose.

The Company is exposed to market risk, liquidity risk, credit risk and other price risks. The Comany risk management is carried out by the management which helps in identification, measurement, mitigation and reporting all risks associated with the activities of the Company. These risks are identified on a continuous basis and assessed for the impact on the financial performance. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes will be undertaken. The Board of Directors reviews policies for managing each of these risks, which are summarised below.

A. Market Risk

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

The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk and interest rate risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

i. Foreign currency risk

The Company operates internationally and a major portion of the business is dominated in foreign currency predominantly US Dollar, Pound Sterling, Australian Dollar and Euro currencies. Consequently the Company is exposed to foreign exchange risk through its services and purchases / import of services from overseas suppliers in various foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are affected as the rupee appreciates/ depreciates against these currencies.

The Company monitors and manages its financial risks by analysing its foreign exchange exposures.

The Company, in accordance with its Board approved risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.

The Company has applied the hedge accounting principles set out in Indian Accounting Standard - 109 "Financial Instruments" (Ind AS - 109) in respect of such derivative contracts, designated in a hedging relationship, used to hedge its risks associated with foreign currency fluctuations relating to certain highly probable forecast transactions. Accordingly, in respect of all such outstanding contracts as at March 31, 2024 that were designated as effective hedges of highly probable forecast transactions, (loss)/ gain, net of tax aggregating ? 13 (net of taxes) (March 31, 2023: ? (81)(net of taxes)) have been recognised under the cash flow hedge reserve.

Sensitivity analysis:

In respect of the Company’s forward exchange contracts, a 5% increase/decrease in the respective exchange rates of each of the currencies underlying such contracts would have resulted in:

1. an approximately ? (326)/ 326 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2024.

2. an approximately ? (669)/ 669 (decrease)/increase in the Company’s other comprehensive income as at March 31, 2023.

Unhedged foreign currency exposure

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company’s net financial assets (viz. which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (USD, Euro, UK pound sterling, Aus $, SGD, CAD, Yen etc.)

Sensitivity analysis:

For the year ended March 31, 2024 and March 31, 2023 , every 5% increase / decrease of the respective foreign currencies compared to functional currency of the Company would impact profit before tax by ? 668 / ( ? 668) and ? 258 / ( ? 258) respectively.

B. Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for expected credit losses and impairment that represents its estimate of incurred losses in respect of trade receivables and unbilled revenue.

Financial guarantee contracts

The Company is exposed to credit risk concerning financial guarantees provided to the subsidiary’s banks. The Company’s exposure is limited to the maximum amount it might need to pay if the guarantee is invoked. The Company charges the subsidiary a fee at fair value for these guarantees. As of the balance sheet date Company does not believe there are any counterparty nonperforming risks (refer note note 24).

Investments:

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

C. Liquidity risk

The Company’s principal sources of liquidity are cash & bank balances, investments in mutual funds and cash generated from operations. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2024 and March 31, 2023, the Company had unutilized credit limits from banks of ? 2,897 and ? 2,874, respectively.

As of March 31, 2024, the Company had working capital of ? 11,512 (March 31, 2023: ? 8,837) including cash and bank balances of ? 1,883 (March 31, 2023: ? 1,153)

(vii) 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

(viii) The Company does not have 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).

33. The code of Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.

34. The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that in respect of one accounting software audit trail feature is not enabled for direct changes to database when using certain access rights and in respect of other software for maintenance of time sheet records, audit trail feature does not exists. Further, no instance of audit trail feature being tampered with was noted in respect of the accounting software.