2.18 Provisions

A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle
the obligation. Provisions are recognised at the best
estimate of the expenditure required to settle the present
obligation at the reporting date, taking into account
the risks and uncertainties surrounding the obligation.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the
risk specific to the liability. The unwinding of discount is
recognised as finance cost.

Provisions for onerous contracts are recognised when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable costs of meeting
the future obligations under the contract. Provisions for
onerous contracts are measured at the present value of
lower of the expected net cost of fulfilling the contract
and the expected cost of terminating the contract.

2.19 Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial instruments
are recognised in the Company’s balance sheet when the
Company becomes a party to the contractual provisions
of the instrument.

a) Recognition and initial measurement

Trade receivables and debt securities issued are
initially recognised when they are originated. All
other financial assets and financial liabilities are

initially recognised when the Company becomes a
party to the contractual provisions of the instrument.

All financial instruments are recognised initially at
fair value except for trade receivables which are
initially measured at transaction price. Transaction
costs that are attributable to the acquisition of the
financial asset (other than financial assets recorded
at fair value through profit or loss) are included in
the fair value of the financial assets. Regular way
purchase and sale of financial assets are accounted
for at trade date.

b) Financial assets

i) Classification and subsequent measurement
For the purpose of subsequent measurement,
a financial asset is classified and measured at

> amortised cost;

> fair value through other comprehensive
income (FVTOCI) - debt investment;

> fair value through other comprehensive
income (FVTOCI) - equity investment; or

> fair value through profit and loss (FVTPL).

1. A financial asset is measured at amortised
cost if both the following conditions are
met:

- the asset is held within a business
model whose objective is to hold
assets to collect contractual cash
flows; and

- the contractual terms of the financial
assets give rise on a specified
date to cash flows that are solely
payments of principal and interest on
the principal amounts outstanding.

2. A debt investment is measured at FVTOCI
if both of the following conditions are met:

- the asset is held within a business
model whose objective is achieved
by both collecting contractual cash
flow and selling financial assets ; and

- the contractual terms of the financial
assets give rise on a specified

ii) Impairment of financial assets

In accordance with Ind AS 109, the Company
applies expected credit loss (“ECL”) model for
measurement and recognition of impairment
loss. The Company follows ‘simplified
approach’ for recognition of impairment loss
allowance on trade receivables (billed and
unbilled) based on expected lifetime credit
losses at each reporting date after initial
recognition.

For recognition of impairment loss on other
financial assets, the Company determines
whether there has been a significant increase
in the credit risk since initial recognition. If
credit risk has not increased significantly,
12-month ECL is used to provide for
impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used.

If in subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the Company reverts to
recognising impairment loss allowance based
on 12-month ECL.

As a practical expedient, the Company uses a
provision matrix to determine impairment loss
on portfolio of its trade receivable and contract
assets. Depending on the diversity of its
customer base, the company has considered
to group its customers into two types:
government customers and non-government
customers.

The provision matrix for non-government
customers is based on its historically observed
default rates over the expected life of the trade
receivable and is adjusted for forward-looking

estimates. The provision matrix for government
customers is primarily based on the time-based
movement within the life cycle of customer
receivable further adjusted for forward-looking
estimates

ECL impairment loss allowance (or reversal)
is recognised as an income/expense in the
statement of profit and loss during the period.

iii) Derecognition of financial assets

A financial asset is derecognised only when
the Company:

- has transferred the rights to receive cash
flows from the financial asset; or

- retains the contractual rights to receive
the cash flows of the financial asset, but
assumes a contractual obligation to pay
the cash flows to one or more recipients.

Where the company has transferred an
asset, the Company evaluates whether it has
transferred substantially all risks and rewards of
ownership of the financial asset. In such cases,
the financial asset is derecognised. Where
the entity has not transferred substantially all
risks and rewards of ownership of the financial
asset, the financial asset is not derecognised.

Where the company has neither transferred
a financial asset nor retains substantially all
risks and rewards of ownership of the financial
asset, the financial asset is derecognised if
the Company has not retained control of the
financial asset.

c) Financial liabilities

i) Classification, subsequent measurement and
gains and losses

Financial liabilities are initially measured at
fair value, net of transaction costs, and are
subsequently measured at amortised cost
through effective interest method. Financial
liabilities are subsequently carried at amortised
cost using the effective interest method, except
for contingent consideration recognised in a
business combination which is subsequently
measured at fair value through profit or loss.
For trade and other payables maturing within
one year from the balance sheet date, the

value measurements are observable and significance of
the inputs to fair value measurements:

- Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities

- Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly or indirectly

- Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable
inputs)

In determining the fair value of an asset or a
liability, the Company uses different methods and
assumptions based on observable market inputs.
All methods of assessing fair value result in general
approximation of value, and such value may not
actually be realised.

The Company recognises transfers between levels
of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
For financial assets and liabilities maturing within
one year from the balance sheet date and which
are not carried at fair value, the carrying amounts
approximate fair value due to the short maturity of
these instruments.

2.21 Revenue recognition

The Company derives revenue primarily from staffing
services in the segments of General staffing, Professional
staffing, Overseas business and Digital platforms. Further,
it also provides training and skill development services
under the General staffing.

Revenues from customer contracts are considered for
recognition and measurement when the contract has
been approved by the parties to the contract, the parties
to contract are committed to perform their respective
obligations under the contract, and the contract is legally
enforceable. Revenue is recognised upon transfer of
control of promised products or services (“performance
obligations”) to customers in an amount that reflects the
consideration the Company has received or expects
to receive in exchange for these products or services
(“transaction price”). When there is uncertainty as to
collectability, revenue recognition is postponed until such
uncertainty is resolved.

The contract with customer for staffing services,
generally contains a single performance obligation and

is measured based on the transaction price, which is the
consideration, adjusted for volume discounts, service
level credits, performance bonuses, price concessions
and incentives, if any, as specified in the contract with the
customer. Revenue also excludes taxes collected from
customers.

Revenue from staffing services in the segments of
General staffing, Professional staffing, Overseas business
and Digital platforms is recognised over time since the
customer simultaneously receives and consumes the
benefits. The invoicing for these services is either based
on cost plus a service fee or fixed fee model.

Revenue from training and skill development services
are recognised over time based on satisfaction of
specific performance criteria included in contractual
arrangements with customers.

The Company has concluded that it is the principal in all
of its revenue arrangements since it is the primary obligor
and has pricing latitude which establishes control before
transferring products and services to the customer.

The Company’s receivables are rights to consideration
that are unconditional. Unbilled revenues comprising
revenues in excess of invoicing are classified as financial
asset when the right to consideration is unconditional and
is due only after a passage of time. Unbilled revenues
are presented under Trade receivables, while invoicing in
excess of revenues are classified as unearned revenue.

Other income

Other income comprises primarily interest income on
deposits, dividend income and gain/ (loss) on disposal of
financial assets and non-financial assets. Interest income
is recognised using the effective interest method.

2.22 Employee benefits

a) Short-term employee benefits

A liability is recognised for benefits accruing to
employees in respect of wages and salaries in
the period the related service is rendered at the
undiscounted amount of the benefits expected
to be paid in exchange for that service. Short¬
term employee benefits are measured on an
undiscounted basis as the related service is
provided.

b) Compensated absences

The employees of the Company are entitled to
compensated absences. The employees can carry

forward a portion of the unutilised accumulating
compensated absences and utilise it in future
periods or receive cash at retirement or termination
of employment. The Company records an obligation
for compensated absences in the period in which
the employee renders the services that increases
this entitlement. The obligation is determined by
actuarial valuation performed by an external actuary
at each balance sheet date using projected unit
credit method.

Accumulated compensated absences, which are
expected to be availed or encashed within 12
months from the end of the year are treated as
short term employee benefits and those expected
to be availed or encashed beyond 12 months from
the end of the year are treated as other long term
employee benefits.

c) Defined contribution plan

Under a defined contribution plan, the Company’s
only obligation is to pay a fixed amount with no
obligation to pay further contributions if the fund
does not hold sufficient assets to pay all employee
benefits. The Company makes specified monthly
contributions towards Employee Provident Fund
to Government administered Provident Fund
Scheme which is a defined contribution plan.
The expenditure for defined contribution plan is
recognised as expense during the period when the
employee provides service.

d) Defined benefit plans

In accordance with the Payment of Gratuity Act,
1972, the Company provides for a lump sum
payment to eligible employees, at retirement or
termination of employment based on the last drawn
salary and years of employment with the Company.
The Company’s gratuity fund is managed by Life
Insurance Corporation of India (LIC), ICICI Prudential,
HDFC Life, Kotak Mahindra Bank and Yes Bank.
The present value of gratuity obligation under such
defined benefit plan is determined based on actuarial
valuations carried out by an external actuary using
the Projected Unit Credit Method. The Company
recognises the net obligation of a defined benefit
plan in its balance sheet as an asset or liability.

The Company recognises the following changes in
the net defined benefit obligation as an expense in
the statement of profit and loss:

2.25 Restructuring Expenses

Restructuring expenses is recognised when the Company
develops a detailed formal plan for the restructuring and
has raised valid expectation in those affected that it will
carry out the restructuring by starting to implement the
plan or announcing its main features to those affected by
it. The measurement of restructuring provision includes
only the direct expenditures arising from the restructuring,
which are those amounts that are both necessarily
entailed by the restructuring and not associated with the
ongoing activities of the entity.

2.26 Write offs

The Company writes off a financial asset when there is
information indicating that the trade receivables (billed
and unbilled) is in severe financial difficulty and there is
no realistic prospect of recovery, for example when the
debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or in the case of trade
receivables, when the amounts are over due, whichever
occurs sooner. Financial assets written off may still be
subject to enforcement activities under the Group’s
recovery procedures, taking into account legal advice
where appropriate. Any recoveries made are recognised
in profit or loss.

2.27 Taxes

Income tax expense comprises current and deferred
income tax. Income tax expense is recognised in the
statement of profit and loss except to the extent that it
relates to items recognised directly in equity or in other
comprehensive income.

Current income tax for current and prior periods is
recognised at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates
and tax laws that have been enacted or substantively
enacted by the reporting date. Deferred income tax
assets and liabilities are recognised for all temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the standalone
financial statements. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be
realised.

Deferred income tax assets and liabilities are measured
using tax rates and tax laws that have been enacted
or substantively enacted by the reporting date and are
expected to apply to taxable income in the years in

which those temporary differences are expected to be
recovered or settled. The effect of changes in tax rates on
deferred income tax assets and liabilities is recognised
as income or expense in the period that includes the
enactment or the substantive enactment date.

Deferred tax assets are recognised to the extent that it
is probable that future taxable profits will be available
against which the deductible temporary differences can
be used. Deferred income tax liabilities are recognised
for all taxable temporary differences. Deferred tax assets,
unrecognised or recognised, are reviewed at each
reporting date and are recognised/reduced to the extent
that it is probable/no longer probable respectively that
the related tax benefit will be realised.

The Company offsets current tax assets and current tax
liabilities, where it has a legally enforceable right to set
off the recognised amounts and where it intends either to
settle on a net basis, or to realise the asset and settle the
liability simultaneously.

2.28 Contingent liability

Contingent liability is a possible obligation that arises from
past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company, or a
present obligation that arises from past events where it is
not probable that an outflow of resources will be required
to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot
be measured reliably. The Company does not recognise
a contingent liability but discloses its existence in the
standalone financial statements.

2.29 Cash flow statement

Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated.

2.30 Segment reporting

In accordance with Ind AS 108, Operating segments,
segment information has been disclosed in the
consolidated financial statements of the Company and
no separate disclosure on segment information is given
in these standalone financial statements.