Provisions, contingent liabilities, commitments and contingent assets

The Group recognises a provision when there is a present obligation as a result of a past event and it is more likely than
not that there will be an outflow of resources embodying economic benefits to settle such obligations and the amount of

such obligation can be reliably estimated. Provisions are discounted to their present value (where time value of money is
material) and are determined based on the management's estimation of the outflow required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of
which will be confirmed only by the occurrence or non-occurrence of future events, not wholly within the control of the Group.
Contingent liabilities are also disclosed for the present obligations that have arisen from past events in respect of which it is not
probable that there will be an outflow of resources or a reliable estimate of the amount of obligation cannot be made.

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related
asset is disclosed.

y) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of
the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at
fair value through profit or loss which are measured initially at fair value. However, trade receivables that do not contain
a significant financing component are measured at transaction price. Subsequent measurement of financial assets and
financial liabilities is described below.

Financial assets

Subsequent measurement

Financial asset at amortised cost - the financial instrument is measured at the amortised cost if both the following
conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and

b) 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.

Investments in equity instruments of subsidiaries and joint ventures

Investments in equity instruments of subsidiaries and joint ventures are accounted for at cost in accordance with Ind AS
27 Separate Financial Statements.

Investments in other equity instruments which are held for trading are classified as at fair value through profit or
loss (FVTPL). For all other equity instruments, the Group makes an irrevocable choice upon initial recognition, on an
instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVOCI)
or fair value through profit or loss (FVTPL).

Investments in mutual funds

Investments in mutual funds are measured at fair value through profit and loss (FVTPL).

Derivative instruments - derivatives such as options and forwards are carried at fair value through profit and loss with
fair gains/losses recognised in statement of profit and loss.

De-recognition of financial assets

A financial asset is primarily de-recognized when the rights to receive cash flows from the asset have expired or the
Group has transferred its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement

Subsequent to initial recognition, all financial liabilities are measured at amortised cost using the effective interest method.
De-recognition of financial liabilities

A financial liability is de-recognized 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 recognized in
the statement of profit or loss.

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.

z) Fair value measurement

The Group measures financial instruments such as investments, at fair value at each balance sheet date. Fair value is the
price that would be received to sell an asset or paid to transfer a liability at the measurement date.

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

aa) Cash and cash equivalents

Cash and cash equivalents comprises cash at bank and in hand, cheques in hand and short term investments that are
readily convertible into known amount of cash and are subject to an insignificant risk of change in value.

ab) Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Group are segregated based on the available information.

ac) Non-current assets held for sale and discontinued operations

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for
sale of such asset and its sale is highly probable. Management must be committed to sale which should be expected to
qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are presented separately and measured at the lower of their carrying
amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some
held for sale assets such as financial assets, assets arising from employee benefits and deferred tax assets, continue to
be measured in accordance with the Group's relevant accounting policy for those assets. Once classified as held for sale,
the assets are not subject to depreciation or amortisation.

A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale.
Profit or loss from discontinued operations comprise the post-tax profit or loss of discontinued operations and the post¬
tax gain or loss resulting from the measurement and disposal of assets classified as held for sale. Any profit or loss
arising from the sale or re-measurement of discontinued operations is presented as part of a single line item, profit or
loss from discontinued operations.

ad) Significant management judgement in applying accounting policies and estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements and the results of operations during the reporting periods.
Although these estimates are based upon management's knowledge of current events and actions, actual results could
differ from those estimates and revisions, if any, are recognised in the current and future periods.

Significant management judgements

The following are significant management judgements in applying the accounting policies of the Group that have the most
significant effect on the financial statements.

Recognition of deferred tax assets: The extent to which deferred tax assets can be recognized is based on an assessment
of the probability of the future taxable income against which the deferred tax assets can be utilized.

Evaluation of indicators for impairment of assets: The evaluation of applicability of indicators of impairment of assets
requires assessment of several external and internal factors which could result in deterioration of recoverable amount
of the assets.

Classification of leases: The Group enters into leasing arrangements for various assets. The classification of the leasing
arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited
to, transfer of ownership of leased asset at end of lease term, lessee's option to purchase and estimated certainty of
exercise of such option, proportion of lease term to the asset's economic life, proportion of present value of minimum lease
payments to fair value of leased asset and extent of specialized nature of the leased asset. The Group has also factored in
overall time period of rent agreements to arrive at lease period to recognise rental income on straight line basis.

Contingent liabilities: At each balance sheet date basis the management judgment, changes in facts and legal aspects,
the Group assesses the requirement of provisions against the outstanding warranties and guarantees. However, the
actual future outcome may be different from this judgement.

Significant estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may be different.

Impairment of financial assets: At each balance sheet date, based on historical default rates observed over expected life,
the management assesses the expected credit loss on outstanding receivables.

Impairment of goodwill and other intangible assets: At each balance sheet date, goodwill is tested for impairment. The
recoverable amount of cash generating unit (CGU) is determined based on the higher of value-in-use and fair value less
cost to sell. Key assumptions on which the management has based its determination of recoverable amount include
estimated long-term growth rates, weighted average cost of capital and estimated operating margins. The cash flow
projections take into account past experience and represent the management's best estimate about future developments.
Cash flow projections based on financial budgets are approved by management.

Defined benefit obligation (DBO): Management's estimate of the DBO is based on a number of critical underlying
assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements: Management applies valuation techniques to determine the fair value of financial instruments
(where active market quotes are not available). This involves developing estimates and assumptions consistent with how
market participants would price the instrument.

Useful lives of depreciable/amortisable assets: Management reviews its estimate of the useful lives of depreciable/
amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates
relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT
equipment and other plant and equipment.