(a) Rupee term loan of ' 9,445 lakhs from Federal bank carries an effective interest rate of 7.9% per annum (March 31, 2025 : 7.9%). The loan is repayable in 120 monthly installment commencing from August 15, 2022 and will mature on July 15, 2032. The proceeds from the loan was utilized for the acquisition of building -SJR Equinox, including the land comprised therein, situated at Electronic City, Bengaluru. The loan is secured by way of exclusive charge on such land and building together with all the fixtures in the building along with lien on fixed deposits equivalent to three months equated monthly instalments (refer note 8).
The Company had entered into a Cross currency interest rate swap with respect to this loan, equal to the tenor of the loan, resulting in an effective interest rate of 4.21% per annum.
(b) The unsecured term loan from bank carries an interest rate of 7.5% fixed (March 31, 2025 : 8.60% ). The loan is repayable in 60 months commencing from October 14, 2024 to October 14, 2029. The Company has entered into interest rate swap derivative agreement to convert the fixed interest loan to floating interest rate benchmarked to 1M T-bill plus spread in two tranches i. ' 20,000 lakhs as on January 01, 2026 and ii. ' 4,900 lakhs as on March 12, 2026.
(c) The Company had issued 4,500 and 3,500 rated, listed, negotiable, unsecured, redeemable non-convertible debentures (NCDs) aggregating to ' 8,000 lakhs were issued during FY 23-24 on a private placement basis, carrying a coupon rate of 3m T-bill 2.35% p.a payable quarterly. Each NCD has face value of ' 1 lakh and is redeemable at face value at the end of 3rd year from the date of respective allotment. NCDs were allotted on 8th May, 2023 and 26th September, 2023 respectively and will mature on 8th May, 2026 and 26th September 2026 respectively. The proceeds from NCDs has been utilised for general corporate purpose. The investor and the issuer has put and call option respectively, for the redemption of debenture at face value on the coupon payment date falling on the expiry of one year or two years from the deemed date of allotment. Consequently, the NCDs are classified as current borrowings.
(d) Company has availed lines of credit from banks in the form of Packing Credit in Foreign Currency (PCFC),Overdraft and short term loans to meet the working capital and other short term requirements
Packing credit in foreign currency (PCFC):
During the current year the total sanctioned limit was ' 39,500 lakhs (March 31, 2025 - ' 31,500 lakhs). Loans were drawn in USD which carried floating interest rate benchmarked to SOFR Spread. Interest rates ranged from 4.29% to 5.26% (March 31, 2025 5.04% to 6.27%). Tenor of the loan ranged from 90 days to 180 days. Loans were secured by way of pari-passu charge on current assets of the Company. These loans were sanctioned as revolving credit which will be renewed on periodic basis. The loans stipulate certain financial covenants as per the terms agreed and the Company has complied with all the covenants to the satisfaction of the banks.
Overdraft facility:
The total sanctioned overdraft limit was ' 82,375 lakhs (March 31,2025 - ' 59,800 lakhs). Interest rates on overdraft was charged with a mark up on fixed deposit interest rates. Mark ups ranged from 55bps to 75bps. Loans were fully secured by way of lien on fixed deposit equivalent to ' 51,406 lakhs (March 31, 2025 - ' 65,880 lakhs) and through pledge of mutual funds equivalent to '.41,336 lakhs (March 31, 2025 - nil) (refer note 14).
Non-fund based facility:
Company availed non-fund based revolving facility of ' 767 lakhs (March 31, 2025 - ' 7,827 lakhs) which can be used for issuance of letter of credits and bank guarantees"
(e) PCFC loan from RBL bank, Federal bank, Kotak Mahindra, NCDs and Rupee term loan from Federal bank contains covenants pertaining to current ratio, interest coverage ratio, total outstanding liability to adjusted tangible net worth ratio, total debt to EBIDTA, Debt service coverage ratio. The Company has satisfied all the debt covenants prescribed in the terms of the borrowings. Other borrowings do not have any debt covenants. The Company has not defaulted in any of the loans payable. Monthly statement of book debts filed by the Company with banks in respect of the PCFC facilities, are in agreement with the books of accounts.
(i) On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively, the "Labour Codes") which consolidate twenty-nine existing labour laws into a unified framework governing employee benefits during employment and post-employment.
The Labour Codes, introduce changes including a uniform definition of wages and enhanced benefits relating to leave. The Company has assessed the financial implications of these changes, which have resulted in an increase in gratuity liability arising from past service cost and increase in leave liability by ' 2,041 lakhs.
Considering that the impact arising from the enactment of the new legislation is non-recurring in nature, the Company has presented this incremental amount of ' 2,041 lakhs as "Impact of Labour Codes" under "Exceptional Items". The Company continues to monitor developments pertaining to the Labour Codes and will evaluate any further impact on the measurement of liabilities relating to employee benefits.
(ii) On May 22, 2024, the Company acquired entire equity interest of Pure Software Technologies Private Limited ('PSTPL'), India for total consideration of ' 75,044 lakhs, comprising cash consideration of ' 64,229 lakhs, cash consideration for cancellation of share based payments of ' 399 lakhs and fair value of contingent consideration of ' 10,415 lakhs payable over next two years. The contingent consideration is indexed to EBITDA and PSTPL's revenues for the financial year 2024-25 and 2025-26.
The contingent consideration is classified as a financial liability as per Ind AS 109 'Financial Instruments' and is measured at fair value. The Accounting Standard mandates that any subsequent changes in such fair value will have to be recognized in the statement of profit and loss. The Company has re-measured the fair value of the contingent consideration as at March 31, 2025 and the change in fair value of ' 2,344 lakhs has been recognised in the statement of profit and loss and disclosed as an 'Exceptional Item'.
35 Employee benefits plan
(i) Defined contribution plans - Provident Fund and others
The Company makes contributions for qualifying employees to Provident Fund and other defined contribution plans. During the year, the Company recognised ' 5,466 lakhs (March 31, 2025 : ' 5,047 lakhs) towards defined contribution plans.
(ii) Defined benefit plans (funded):
The Company provides for gratuity for employees in India as per the Payment of Gratuity (Amendment) Act, 2018 and the provisions of the Code on Social Security, 2020. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic wages per month computed proportionately for 15 days salary multiplied for the number of years of service. The Gratuity plan of the Company is funded with qualifying Insurance Company.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The following payments are expected cash flows to the defined benefit plan in future years:
Expected contributions to defined benefits plan for the year ended March 31, 2026 is ' 240 lakhs (March 31, 2025 : ' 466 lakhs). The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 5 years (March 31, 2025: 6 years). The expected maturity analysis of undiscounted gratuity is as follows:
iv) Valuation Inputs and relationship to fair value
(a) During the year, the contingent consideration arising the acquisition of PSTPL have been finalised based on the achievement of agreed performance conditions. Accordingly, the fair value of these financial liabilities as at March 31, 2026 amounts to ' 104 lakhs. and there is no further estimation uncertainty associated with these instruments.
The outstanding liabilities as at March 31, 2026 are fixed and determinable, and the same are scheduled to be settled on August 31, 2026.
The fair value of the financial assets and liabilities are measured 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 following
methods and assumptions were used to estimate the fair values:
a) The fair value of liquid mutual funds is based on the net assets value (NAV) as declared by the fund house.
b) The Company has entered into foreign currency forward contract and Cross currency interest rate swap (CCIRS) to hedge the highly probable forecasted transactions. The derivative financial instrument is entered with the financial institutions with investment grade ratings. Foreign exchange forward contracts and CCIRS are valued based on valuation models which include use of market observable inputs. The mark to market valuation is provided by the financial institution as at reporting date. The valuation of derivative contracts are categorised as level 2 in fair value hierarchy disclosure.
c) The Company has entered into interest rate swap contracts to hedge the fair value of a fixed rate borrowing. The derivative financial instrument is entered with the financial institutions with investment grade ratings and are valued based on valuation models which include use of market observable inputs. The valuation of derivative contracts are categorised as level 2 in fair value hierarchy disclosure.
d) The management assessed that cash and cash equivalent, trade receivables, trade payables, other financial assets (current), other financial liability (current), bank overdraft and cash credit, lease liabilities (current) and loans to employees approximates their fair value largely due to short-term maturities of these instruments.
e) The Company has valued contingent consideration by using the monte carlo simulation approach for the year March 31, 2025. In the current year, the Company has executed an agreement to finalise the amount payable towards the contingent consideration based on the achievement of agreed performance conditions. The contingent consideration has been measured at the amount so agreed.
f) The fair value of remaining financial instruments are determined on transaction date based on discounted cash flows calculated using lending/ borrowing rate. Subsequently, these are carried at amortized cost. The carrying amount of the remaining financial instruments are the reasonable approximation of their fair value.
For financial assets carried at fair value, their carrying amount are equal to their fair value.
37 Financial risk management
The Company's principal financial liabilities comprise of borrowings, 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 enters into derivative transactions for hedging purpose.
The Company's activities exposes it to market risk, liquidity risk and credit risk. The Company's risk management is carried out by the management under the policies approved by the Board of Directors that help 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 and agrees policies for managing each of these risks, which are summarized 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 two types of risk: interest rate risk and currency risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.
i. Foreign currency risk
The Company operates in various geographies and its business is transacted in multiple currencies resulting in exposure to foreign exchange risk. The exchange risk primarily arises from foreign currency revenue, highly probable forecasted revenue, receivables, cash and cash equivalents, deposits, investments, payables, loans and borrowings.
While the Company transacts in various currencies, significant portion of the Company's revenue is in USD, GBP and EUR and large portion of the costs are in Indian Rupees. The exchange rate between Indian Rupee and these currencies has fluctuated significantly during the year and may continue to do so in the future. Appreciation / depreciation of Indian Rupee against these currencies can significantly affects the Company's operating results.
The Company evaluates those exchange risk and mitigates it by entering into foreign currency forward contracts to hedge the highly probable forecasted revenue.
The Company has designated the forward contract derivatives as cash flow hedge and accordingly has adopted hedge accounting."
ii. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
a) Borrowings
The Company's exposure to the interest rate risk primarily arises from the floating rate borrowings including working capital loans and other revolving line of credit.
During the current year, the Company has entered into Interest Rate Swap (IRS) to mitigate the interest rate risk on its fixed rate borrowings. The Company has designated the interest rate swap as fair value hedge. Under the swap arrangement, Company receives fixed interest rate and pays floating interest benchmarked to 1M Tbill spread, thereby converting fixed rate borrowing into floating rate borrowing.
The Company assesses the hedge effectiveness prospectively and retrospectively and expects the hedge relationship to remain highly effective throughout the hedge period
Sensitivity:
Floating rate borrowings are short term in nature, hence sensitivity has not been disclosed. The fixed rate borrowing is designated in a fair value hedge and hence does not cause any variability.
b) Investments:
Company's investment are primarily in medium to long term debt mutual funds, which is exposed to significant interest rate risk. The Company mitigates the same by diversifying its portfolio across multiple schemes.
Other financial assets and cash deposit
Credit risk from balances with the banks, loans, investments in mutual funds and other financial assets are managed by the company based on the company policy and is managed by the Company's Treasury Team. Investment of surplus fund is made only with approved counterparties. The Company's maximum exposure to credit risk is the carrying amount of such assets as disclosed in note 37 above.
D) 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 position and maintains adequate source of financing.
As of the end of the reporting period, the Company has access to undrawn borrowing facilities amounting to ' 32,135 lakhs (March 31,2025: ' 21,370 lakhs).
C) 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. The Company is exposed to credit risk from its operating activities (primarily trade receivables, unbilled revenue and contract assets) and from its investing activities (primarily deposits with banks).
(i) Trade receivables, unbilled revenue and contract assets.
Trade receivables, unbilled revenue and contract assets are typically unsecured and derived from revenue from contracts with customers. Customer credit risks is managed by each business units subject to Company's policy and procedures which involves continuously monitoring the credit worthiness of customers to which the Company grants/credits in the normal course of business. The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivable. Under the simplified approach, the Company does not track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime expected credit losses at each reporting date, right from initial recognition. The company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix takes into account available external and internal credit risk factors and the Company's historical experience with customers.
38 Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, convertible preference shares, securities premium and all other equity reserves. The primary objective of the Company's capital management is to maintain a strong capital base to ensure sustained growth in business and to maximize the shareholders value. The capital management focuses to maintain an optimal structure that balances growth and maximizes shareholder value.
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 includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. The Company's gearing ratio, which is net debt divided by total capital plus net debt is as below:
Terms and conditions of transactions with related parties:
(i) The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions.
(ii) During the previous financial year, the Company availed a loan of ' 1,250 lakhs (USD 1.46 million) from Happiest Minds Inc. at an interest rate linked to overnight SOFR plus a spread. The loan was fully repaid during the current financial year. (refer note 7)
(iii) During the current year, the Company has provided a corporate guarantee in favour of Citibank NA on behalf of Happiest Minds Inc. for an amount of ' 7,586 Lakhs (USD 8 million) for the term loan taken by Happiest Minds Inc. (refer note 41)
(iv) Loan from PureSoftware Technologies Private Limited of ' 8,850 Lakhs carries an interest rate of 7.90% p.a.outstanding balance as on 31.03.26 is ' 1,700 Lakhs. (refer note 19)
(v) The rate of interest applicable shall be equal to the RBI repo rate as at the date if the loan plus 140 basis points. The average interest rate for the period outstanding for the year is 7.90%.
(vi) All other outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables expect as mentioned in (iii) above. For the year ended 31 March 2026, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2025: 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.
|
41 Commitments and Contingent Liabilities i) Contingent liabilities:
|
|
Particulars
|
March 31, 2026
|
March 31, 2025
|
|
(a) Claims against the Company, not acknowledged as debts (including interest and penalty)
|
|
|
|
Goods and Service Tax - denial of input tax credit on expenses and difference in GSTR-3B and GSTR-1
|
836
|
836
|
|
(b) Guarantees given by the Company on behalf of its wholly owned Subsidiary
|
7,586
|
-
|
|
ii) Capital Commitments
|
|
Particulars
|
March 31, 2026
|
March 31, 2025
|
|
Capital commitments towards purchase of capital assets
|
2,366
|
892
|
iii) Other claims against the Company not provided for in the books
a) The Company is also subject to certain other claims and suits that arise from time to time in the ordinary conduct of its business. While the Company currently believes that such claims, individually or in aggregate, will not have a material adverse impact on its financial position, cash flows, or results of operations, the litigation and other claims are subject to inherent uncertainties, and management's view of these matters may change in the future. Were an unfavourable final outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on the Company's business, reputation, financial condition, cash flows, and results of operations for the period in which the effect becomes reasonably estimable.
42 Share based payments
Employee Share Option Plan (ESOP)
The Company instituted the Employee Share Option Plan 2011 (""ESOP 2011"") and Equity Incentive Plan 2011 ("EIP 2011") for eligible employees during the year ended March 2012 which was approved by the Board of Directors (Board) on October 18, 2011 and January 19, 2012 duly amended by the Board on January 22, 2015.
Besides the above plan, the Company has also instituted Employee Share Option Plan 2014 (""ESOP 2014"") duly approved by the Board on October 20, 2014 and by the shareholders on January 22, 2015. The Company has also instituted Employee Share Option Plan 2015 (""ESOP 2015"") duly approved by the Board on June 30, 2015 and by the shareholders on July 22, 2015. During year ended 2018, the Company has amended ESOP 2014 and all options granted under ESOP 2014 be deemed to be granted under ESOP 2011 duly approved by the Board on October 25, 2017. The plans are separate for USA employees (working out of the United States America - ""USA"") and employees working outside USA. The Company administers these plans.
On April 29, 2020 the Board of the Company approved Happiest Minds Employee Stock Option Scheme 2020 ("ESOP 2020") consisting of 70,00,000 equity shares. The Company will henceforth issue grants under the ESOP 2020 only.
The contractual term of each option granted is 5-8 years.
1,09,050 options under Employee Stock Ownership Plan 2020 were granted during the year (March 31,2025 - Nil)
The weighted average share price of shares exercised during the year is ' 546.01 (March 31,2025 - ' 770.44)
Exercisable options as at March 31, 2026 - 3,57,700 options (March 31, 2025 - 4,96,318 options) and weighted average exercise price - ' 18.53 (March 31,2025 - ' 25.93)
43 Scheme of Merger
A Merger of Happiest Minds Edutech Private Limited (erstwhile Macmillan Learning India Private Limited) with the Company
The Hon'ble National Company Law Tribunal (NCLT) approved the Scheme of Amalgamation of Happiest Minds Edutech Private Limited ("Transferor Company") with and into Happiest Minds Technologies Limited ("Transferee Company") vide order dated September 22, 2025.
The Scheme became effective upon filing of the NCLT order with the Registrar of Companies. The appointed date of the Scheme is April 18, 2024.
The amalgamation has been accounted for using the pooling of interests method in accordance with Appendix C to Ind AS 103, Business Combinations. Accordingly, the comparative financial information has been restated from the appointed date.
The accounting under pooling of interest method is as follows:
(i) All assets, liabilities and reserves of the Transferor Company have been recorded at their existing carrying amounts.
(ii) The identity of reserves of the Transferor Company has been preserved in the books of the Company.
(iii) Inter-company balances and transactions between the Transferor Company and the Company have been eliminated.
(iv) The investment held by the Company in the Transferor Company has been cancelled and adjusted in accordance with Appendix C to Ind AS 103.
Summary of Assets and Liabilities as at April 01,2024
In accordance with Appendix C to Ind AS 103, the comparative financial information in the financial statements of the Transferee Company shall be restated for the accounting impact of the merger of the Transferor Company, as stated above, as if the merger had occurred from the beginning of the comparative period presented.
B Merger of Sri Mookambika Infosolutions Private Limited with the Company
The Hon'ble National Company Law Tribunal (NCLT) approved the Scheme of Amalgamation of Sri Mookambika Infosolutions Private Limited("SMI") ("Transferor Company") with and into Happiest Minds Technologies Limited ("Transferee Company") vide order dated September 25, 2025 (read with a corrigendum dated October13,2025)
The Scheme became effective upon filing of the NCLT order with the Registrar of Companies. The appointed date of the Scheme is April 1,2025.
The amalgamation has been accounted for using the pooling of interests method in accordance with Appendix C to Ind AS 103, Business Combinations. Accordingly, the comparative financial information has been restated from the appointed date
The accounting under pooling of interest method is as follows:
(i) All assets, liabilities and reserves of the Transferor Company have been recorded at their existing carrying amounts.
(ii) The identity of reserves of the Transferor Company has been preserved in the books of the Company.
(iii) Inter-company balances and transactions between the Transferor Company and the Company have been eliminated.
(iv) The investment held by the Company in the Transferor Company has been cancelled and adjusted in accordance with Appendix C to Ind AS 103.
(b) The Company has not given any loans and advances in the nature of loan granted to promoters, directors and KMPs.
(c) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender.
(d) The Company does not have any transactions with the companies struck off under section 248 of the Companies Act, 2013.
(e) The Company does not have any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period.
(f) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017
(g) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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.
(h) 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.
(i) The Company does not have any 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).
(j) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
45 No significant events have occurred after the end of the reporting period.
46 a. The Company has maintained proper books of account as required by law and has backup of such books of
account on a daily basis maintained in electronic mode in a server physically located in India except for an accounting software used for maintaining revenue records where the back-ups are maintained in a server physically located outside India.
b. The Company has used an accounting software for maintaining its books of account for the year ended March 31, 2026 which has a feature of recording audit trail (edit log) facility except at database level for the software used to maintain revenue records. Audit trail has been preserved as per the statutory requirements for record retention."
47 The Company publishes Standalone Financial Statements along with the Consolidated Financial Statements. In accordance with Ind AS 108, Operating segments, the Company has disclosed the segment information in the Consolidated Financial Statements. Accordingly, the segment information is given in the Consolidated Financial Statements of Happiest Minds Technologies Limited and its subsidiaries for the year ended March 31,2026.
48 The Board of Directors of the Company at their meeting held on May 28, 2026, recommended the payout of a final dividend of ' 3.65/- per equity share of face value ' 2/- each for the financial year ended March 31, 2026 . This recommendation is subject to approval of shareholders at the 15th Annual General Meeting of the Company scheduled to be held on July 28, 2026.
49 Previous year's figures have been regrouped/ reclassified wherever necessary to conform with current year classification.
| 