1. Corporate Information

Addictive Learning Technology Limited (the “Company”) (formerly known as Addictive Learning Technology Private Limited) was incorporated on September 12, 2017 under the Indian Companies Act, 2013 having registered office at Space Creattors Heights, 3rd floor, Landmark Cyber Park, Golf Course Extension, Sector 67, Gurgaon, Haryana 122102, DL FQE, Gurgaon, Dlf Qe, Haryana, India, 122002. The Company is engaged in the business of providing consultancy education services such as Law, Management Studies, Online Education, Personality Development Program etc.

Summary of significant accounting policies

(i) Basis of preparation

These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Companies (Accounting Standards) Rules, 2021, specified under section 133 and other relevant provisions of the Companies Act, 2013.

The Standalone Financial Statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments and share-based payment transactions that are measured at fair value as required by relevant AS.

Accounting policies have been consistently applied to all the years presented unless otherwise stated.

Company has prepared the financial statements on the basis that it will continue to operate as a going concern.

All assets and liabilities have been classified as current / non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non current classification of assets and liabilities.

(ii) Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use and other incidental expenses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.

(iii) Intangible assets Acquired intangible assets

Intangible assets that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses.

Internally generated intangible assets

Research expenditure and development expenditure that do not meet the criteria as stated below are recognised as an expense as incurred. Development costs previously recognised as expense are not recognised as an asset in a subsequent period.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale.

• the intention to complete the intangible asset and use or sell it.

• the ability to use or sell the intangible asset.

• how the intangible asset will generate probable future economic benefits.

• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and

• the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss, when the asset is derecognised.

The expenditure which has been incurred during the year on Content Development for which the results and benefits of these expenditure would be obtained over the multiple years in coming future has been considered as "Deferred Revenue Expenditure" in the books of accounts till previous financial year, From current Financial Year we have changed the policy and considered as intangible assets.

This has resulted in an increase in profit before tax for current financial year, after taking into account the adjustment for previous financial year as well, by INR 364.07 Lacs.

This accounting policy change also harmonises treatment of Content Development under Income Tax Act, which was already being followed for the previous year as well.

Depreciation and amortisation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the office equipments and furnitures and fixtures, in which cases the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Intangible assets are amortised in the Statement of Profit and Loss over their estimated useful lives on straight line method, from the date that they are available for use. The Company amortises its intangible assets as follows:

The depreciation charge for each period is recognised in the Statement of Profit and Loss, unless it is included in the carrying amount of any other asset. The useful life, residual value and the depreciation method are reviewed at each financial year end. If the expectations differ from previous estimates the changes are accounted for prospectively as a change in accounting estimates.

(iv) Revenue recognition

Revenue from services is recognized based on services rendered on a cost plus basis in accordance with terms of the master services agreements entered into by the Company with its customers and is net of goods and services tax (GST). Revenue in excess of billings on service contracts is recorded as unbilled revenue and is included in Trade receivables.

Interest: Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Income from export incentives is recognised when the application is filed with the government authority and when it is reasonable certain that ultimate collection will be made.

(v) Foreign currency translation Initial Recognition:

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Subsequent Recognition:

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

All monetary assets and liabilities in foreign currency are restated at the rates ruling at the end of accounting period. Exchange differences arising therefrom are recognized in the Statement of Profit and Loss.

(vi) Current and deferred tax

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in the respective jurisdictions.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. In situations, where the Company has unabsorbed depreciation or carry forward losses under tax laws, all deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the assets and the liability on net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

(vii) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share is the net profit for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

(viii) Use of estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles ("GAAP") in India, requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities including the recoverability of Property, plant and equipment and intangible assets, disclosure of contingent liabilities as at the date of the financial statements and the date of the financial statements and the reported amounts of income and expenses during the reported period. On an on-going basis, management evaluates the estimates.

The most significant estimates relate to provision for expenses related to income taxes, contingencies and litigations, employee benefits and useful life of assets. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual amounts may differ from the estimates used in the preparation of the financial statements.

(ix) Provisions and contingent liabilities

Provisions: Provisions are recognized when the Company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(x) Cash and cash equivalents

Cash and cash equivalents includes cash in hand, demand deposits with banks with original maturities of three months or less.