4. Summary of Significant Accounting Policies

The following are the significant accounting
policies applied by the company in preparing
its financial statements:

4.1. Current versus non-current classification

The Company presents assets and liabilities
in the Balance Sheet based on current/non-
current classification.

An asset is treated as current when it is:

• Expected to be realised or intended
to be sold or consumed in the normal
operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve
months after the reporting period; or

• Cash or cash equivalent unless restricted
from being exchanged or used to settle
a liability for at least twelve months after
the reporting period.

All other assets are classified as non-current.
A liability is current when:

• It is expected to be settled in the normal
operating cycle;

• It is held primarily for the purpose of
trading;

• It is due to be settled within twelve
months after the reporting period; or

• There is no unconditional right to defer
the settlement of the liability for at
least twelve months after the reporting
period.

The Company classifies all other liabilities as
non-current.

Deferred tax assets and liabilities are
classified as non-current assets and liabilities.

The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.

4.2. Business combinations and goodwill

Business combinations are accounted for
using the acquisition method prescribed
under IND AS. The cost of an acquisition
is measured as the aggregate of the
consideration transferred measured at
acquisition date fair value.

Acquisition related costs are expensed as
incurred.

At the acquisition date, the identifiable assets
acquired and the liabilities assumed are
recognised at their acquisition date fair values.
For this purpose, the liabilities assumed
include contingent liabilities representing
present obligation and they are measured
at their acquisition fair values irrespective of
the fact that outflow of resources embodying
economic benefits is not probable. However,
the following assets and liabilities acquired in
a business combination are measured at the
basis indicated below:

Deferred tax assets or liabilities, and the
assets or liabilities related to employee benefit
arrangements are recognised and measured
in accordance with Ind AS 12 Income Tax and
Ind AS 19 Employee Benefits respectively.

When the Company acquires a business, it
assesses the financial assets and liabilities
assumed for appropriate classification
and designation in accordance with the
contractual terms, economic circumstances
and pertinent conditions as at the acquisition
date. This includes the separation of
embedded derivatives in host contracts by
the acquiree.

If the business combination is achieved in
stages, any previously held equity interest is
re-measured at its acquisition date fair value
and any resulting gain or loss is recognised in
profit or loss.

Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred and any previous interest held,
over the net identifiable assets acquired and
liabilities assumed.

A cash generating unit to which goodwill
has been allocated is tested for impairment
annually, or more frequently when there is an
indication that the unit may be impaired. If the
recoverable amount of the cash generating
unit is less than its carrying amount, the
impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated
to the unit and then to the other assets of the
unit pro rata based on the carrying amount of
each asset in the unit. Any impairment loss
for goodwill is recognised in profit or loss. An
impairment loss recognised for goodwill is not
reversed in subsequent periods.

Where goodwill has been allocated to a cash¬
generating unit and part of the operation
within that unit is disposed off, the goodwill
associated with the disposed operation
is included in the carrying amount of the
operation when determining the gain or loss
on disposal. Goodwill disposed in these
circumstances is measured based on the
relative values of the disposed operation
and the portion of the cash-generating unit
retained.

If the initial accounting for a business
combination is incomplete by the end of the
reporting period in which the combination
occurs, the Company reports provisional
amounts for the items for which the
accounting is incomplete. Those provisional
amounts are adjusted through goodwill

during the measurement period, or additional
assets or liabilities are recognised, to reflect
new information obtained about facts and
circumstances that existed at the acquisition
date that, if known, would have affected
the amounts recognized at that date. These
adjustments are called as measurement
period adjustments. The measurement period
does not exceed one year from the acquisition
date.

4.3. Foreign currencies

The company's financial statements are
presented in INR, which is also the company's
functional currency.

Transactions and balances

Transactions in foreign currencies are initially
recorded by the Company at the functional
currency spot rate at the date the transaction
first qualifies for recognition.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange
at the reporting date. Exchange differences
arising on settlement or translation of
monetary items are recognised in statement
of profit or loss.

Non-monetary items that are measured in
terms of historical cost in a foreign currency
are translated using the exchange rates at
the dates of the initial transactions. Non¬
monetary items measured at fair value
in foreign currency are translated using
the exchange rates at the date when the
fair value is determined. The gain or loss
arising on translation of non-monetary items
measured at fair value is treated in line with
the recognition of the gain or loss on the
change in fair value of the item (i.e., translation
differences on items whose fair value gain
or loss is recognised in OCI or statement of
profit or loss are also recognised in OCI or
profit or loss, respectively).

4.4. Fair value measurement

Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date. The
fair value measurement is based on the
presumption that the transaction to sell the

asset or transfer the liability takes place
either:

• In the principal market for the asset or
liability

Or

• In the absence of a principal market, in
the most advantageous market for the
asset or liability.

The principal or the most advantageous
market must be accessible by the
Company.

The fair value of an asset or a liability
is measured using the assumptions that
market participants would use when
pricing the asset or liability, assuming
that market participants act in their
economic best interest.

A fair value measurement of a non-financial
asset takes into account a market participant's
ability to generate economic benefits by
using the asset in its highest and best use or
by selling it to another market participant that
would use the asset in its highest and best
use.

The company uses valuation techniques that
are appropriate in the circumstances and for
which sufficient data are available to measure
fair value, maximising the use of relevant
observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorised within the fair
value hierarchy, as described below, 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 assets and liabilities that are recognised in
the financial statements on a recurring basis,
the company determines whether transfers
have occurred between levels in the hierarchy
by re-assessing categorisation (based on the
lowest level input that is significant to the fair
value measurement as a whole) at the end of
each reporting period.

For the purpose of fair value disclosures,
the Company 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.

This note summarises accounting policy for
fair value. Other fair value related disclosures
are given in the relevant notes.

• Significant accounting judgements,
estimates and assumptions

• Quantitative disclosures of fair value
measurement hierarchy

• Financial instruments (including those
carried at amortised cost)

4.5. Property, plant and equipment

Property, plant and equipment is stated at
cost, net of accumulated depreciation and
accumulated impairment losses, if any. Such
cost includes the cost of replacing part of
the plant and equipment and borrowing
costs for long-term construction projects if
the recognition criteria are met. The cost of
assets acquired in a business combination
is their fair value at the date of acquisition.
When significant parts of Property, plant and
equipment are required to be replaced at
intervals, the Company recognises such parts
as individual assets with specific useful lives
and depreciates them accordingly. All repair
and maintenance costs are recognised in
statement of profit or loss as incurred.

Capital work-in-progress comprises cost of
fixed assets that are not yet installed and
ready for their intended use at the balance
sheet date.

Depreciation is calculated on a written down
value basis over the estimated useful lives of
the assets as follows:

• Building - 60 years

• Leasehold Improvements - 5 years

• Plant and equipment - 5 to 10 years

• Furniture & Fixtures - 10 years

• Vehicles - 8 years

• Computer & Peripherals - 3 to 8 years

An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising
on de-recognition 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.

4.6. Intangible Assets

Intangible assets acquired separately are
measured on initial recognition at cost.
The cost of intangible assets acquired in
a business combination is their fair value
at the date of acquisition. Following initial
recognition, intangible assets are carried at
cost less any accumulated amortisation and
accumulated impairment losses. Cost include
acquisition and other incidental cost related
to acquiring the intangible asset.

Research costs are expensed as incurred.
Intangible development costs are capitalised
as and when technical and commercial
feasibility of the asset is demonstrated, future
economic benefits are probable. The costs
which can be capitalized include the salary
and ESOP cost of employees that are directly
attributable to development of the asset for
its intended use.

The useful lives of intangible assets are
assessed as either finite or indefinite.
Intangible assets with finite lives are
amortised over the useful economic life and
assessed for impairment whenever there is
an indication that the intangible asset may
be impaired. The amortisation period and the
amortisation method for an intangible asset
with a finite useful life are reviewed at least
at the end of each reporting period. Changes
in the expected useful life or the expected
pattern of consumption of future economic
benefits embodied in the asset are considered

to modify the amortisation period or method,
as appropriate, and are treated as changes
in accounting estimates. The amortisation
expense on intangible assets with finite lives
is recognised in the statement of profit and
loss.

Gains or losses arising from de-recognition
of an intangible asset are measured as the
difference between the net disposal proceeds
and the carrying amount of the asset and are
recognised in the Statement of Profit and
Loss when the asset is derecognised.

Amortisation

Period of Amortisation of Intangibles is
calculated as follows:

• Computer software acquired on

Amalgamation - 5 years

• Computer software generated/acquired
- 3 to 10 years

• Trademark acquired on Amalgamation -
25 years

• IT Platform acquired on Amalgamation -
5 years

• Customer Relationship acquired on
Amalgamation - 25 years

• Trademark - 10 years

Intangible assets under development

Expenditure incurred on acquisition /
construction of intangible assets which are
not ready for their intended use at balance
sheet date are disclosed under Intangible
assets under development. During the period
of development, the asset is tested for
impairment annually.

4.7. Leases

The Company assesses at contract inception
whether a contract is, or contains, a lease.
That is, if the contract conveys the right to
control the use of an identified asset for a
period of time in exchange for consideration.

Company as a lessee

The Company's lease asset classes comprise of
lease for building and for vehicles. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control

the use of an identified asset for a period of time in
exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether:

(i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease and (iii) the Company has the
right to direct the use of the asset. The Company
applies a single recognition and measurement
approach for all leases, except for short-term
leases and leases of low-value assets. For these
short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the term of
the lease. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets
as below:

i) Right-of-use assets

The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right-of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
re-measurement of lease liabilities. The cost
of right-of-use assets includes the amount
of lease liabilities recognised, initial direct
costs incurred, and lease payments made
at or before the commencement date less
any lease incentives received. For lease of
building right-of-use assets are depreciated
on a straight-line basis over the shorter of
the lease term and the estimated useful
lives of the underlying assets (i.e. 30 and
60 years) and for lease of vehicles Right of-
use assets are depreciated on a straight-line
basis over the shorter of the lease term and
the estimated useful lives of the underlying
assets (i.e. 8 years) If ownership of the leased
asset transfers to the Company at the end
of the lease term or the cost reflects the
exercise of a purchase option, depreciation
is calculated using the estimated useful life
of the asset. The right-of-use assets are also
subject to impairment.

ii) Lease Liabilities

At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease

payments to be made over the lease term.
The lease payments include fixed payments
(including in substance fixed payments) less
any lease incentives receivable, variable
lease payments that depend on an index
or a rate, and amounts expected to be paid
under residual value guarantees. The lease
payments also include the exercise price of
a purchase option reasonably certain to be
exercised by the Company and payments of
penalties for terminating the lease, if the lease
term reflects the Company exercising the
option to terminate. Variable lease payments
that do not depend on an index or a rate are
recognised as expenses (unless they are
incurred to produce inventories) in the period
in which the event or condition that triggers
the payment occurs.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.
The Company's lease liabilities are included
in other current and non-current financial
liabilities.

(iii) Short-term leases and leases of low-value
assets

The Company applies the short-term lease
recognition exemption to its short-term leases
(i.e., those leases that have a lease term of
12 months or less from the commencement
date and do not contain a purchase option).
It also applies the lease of low-value assets
recognition exemption to leases that are
considered to be low value. Lease payments
on short-term leases and leases of low-
value assets are recognised as expense on a
straight-line basis over the lease term. "Lease
liability" and "Right of Use" asset have been
separately presented in the Balance Sheet

and lease payments have been classified as
financing cash flows.

Company as a lessor

Leases for which the Company is a lessor
is classified as finance or operating lease.
Leases in which the Company does not
transfer substantially all the risks and rewards
incidental to ownership of an asset are
classified as operating leases. Rental income
arising is accounted for on a straight-line
basis over the lease terms.

4.8. Impairment of non-financial assets

Non-financial assets are evaluated for
recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. For
the purpose of impairment testing, the
recoverable amount (i.e. the higher of the
fair value less cost to sell and the value-in¬
use) is determined on an individual asset
basis unless the asset does not generate
cash flows that are largely independent of
those from other assets. In such cases, the
recoverable amount is determined for the
cash generated unit (CGU) to which the asset
belongs.

If such assets are considered to be impaired,
the impairment to be recognized in the
Statement of Profit and Loss is measured by
the amount by which the carrying value of the
assets exceeds the estimated recoverable
amount of the asset. An impairment loss is
reversed in the statement of profit and loss
if there has been a change in the estimates
used to determine the recoverable amount.
The carrying amount of the asset is increased
to its revised recoverable amount, provided
that this amount does not exceed the carrying
amount that would have been determined
(net of any accumulated amortization or
depreciation) had no impairment loss been
recognized for the asset in prior years.

Goodwill is tested for impairment annually
and when circumstances indicate that the
carrying value may be impaired.

Impairment is determined for goodwill by
assessing the recoverable amount of each
CGU to which the goodwill relates. When
the recoverable amount of the CGU is less
than its carrying amount, an impairment loss

is recognised. Impairment losses relating to
goodwill cannot be reversed in future periods.

Intangible assets with indefinite useful
lives are tested for impairment annually at
the CGU level, as appropriate, and when
circumstances indicate that the carrying
value may be impaired.

4.9. Borrowing cost

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalised as part of the cost
of the asset. All other borrowing costs are
expensed in the period in which they occur.

4.10. Revenue Recognition
Rendering of services

Revenue is recognised upon transfer of
control of promised services to customers
in an amount that reflects the consideration
which the Company expects to receive in
exchange for those services.

Revenue from payment gateway services
is recognised on settlement of transactions
measured by value of transactions processed
as per the rates and terms agreed between
parties.

Revenue from Web Services is recognised
upfront at the point in time when the service
is delivered to the customer. In cases where
implementation and / or customisation
services rendered significantly modifies or
customises, these service is recognised
proportionally over the period.

Revenue is measured based on the
consideration specified in a contract with the
customer and excludes amounts collected on
behalf of customers. The Company presents
revenue net of discounts and collection
charges. Revenue also excludes taxes
collected from customers.

Revenue from subsidiaries is recognised
based on transaction price which is at arm's
length.

Contract assets are recognised when there
is excess of revenue earned over billings
on contracts. Contract assets are classified
as unbilled revenue (only act of invoicing is
pending) when there is unconditional right
to receive cash, and only passage of time is
required, as per contractual terms.

Excess billing over revenue ("contract
liability") is recognised when there is billing in
excess of revenues.

In accordance with Ind AS 37, the Company
recognises an onerous contract provision
when the unavoidable costs of meeting the
obligations under a contract exceed the
economic benefits to be received.

Contracts are subject to modification to
account for changes in contract specification
and requirements. The Company reviews
modification to contract in conjunction
with the original contract, basis which the
transaction price could be allocated to a
new performance obligation, or transaction
price of an existing obligation could undergo
a change. In the event transaction price is
revised for existing obligation, a cumulative
adjustment is accounted for.

The Company disaggregates revenue from
contracts with customers by offering and
geography.

The Company exercises judgement in
determining whether the performance
obligation is satisfied at a point in time or over
a period of time. The Company considers
indicators such as how customer consumes
benefits as services are rendered or who
controls the asset as it is being created or
existence of enforceable right to payment for
performance to date as per contract.

Interest income

For all financial instruments measured at
amortised cost, interest income is recorded
using the effective interest rate (EIR). The
EIR is the rate that exactly discounts the
estimated future cash receipts over the
expected life of the financial instrument or
a shorter period, where appropriate, to the
gross carrying amount of the financial asset
or to the amortised cost of a financial liability.
When calculating the effective interest rate,
the Company estimates the expected cash
flows by considering all the contractual terms
of the financial instrument (for example,
prepayment, extension, call and similar
options) but does not consider the expected

credit losses. Interest income is included in
other income in the statement of profit or
loss.

Rental income

Rental income arising from operating leases
is accounted for on a straight-line basis
over the lease terms and is included in other
income in the statement of profit or loss due
to its nature.

4.11. Financial instruments - initial recognition
and subsequent measurement

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.

a) Financial assets

(i) Initial recognition and measurement.

All financial assets, except investment
in subsidiaries and joint ventures, are
recognised initially at fair value plus, in the
case of financial assets not recorded at fair
value through profit or loss, transaction costs
that are attributable to the acquisition of the
financial assets.

(ii) Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in four
categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through
other comprehensive income (FVTOCI)

• Debt instruments at fair value through
profit or loss (FVTPL)

• Equity instruments measured at fair
value through other comprehensive
income (FVTOCI)

• Equity instruments measured at fair
value through statement of profit and
loss (FVTPL)

• Debt instruments at amortised cost:

A debt instrument 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 for collecting contractual
cash flows, and

- 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. Amortised
cost is calculated by taking into account
any discount or premium on acquisition
and fees or costs that are an integral
part of the EIR. The EIR amortisation
is included in other income in the
statement of profit and loss. The losses
arising from impairment are recognised
in the statement of profit and loss. This
category generally applies to trade and
other receivables.

• Debt instruments at fair value through
other comprehensive income (FVTOCI)

A debt instrument is measured at fair
value through other comprehensive
income if both of the following criteria
are met:

- the objective of the business
model is achieved both by
collecting contractual cash flows
and selling the financial assets,
and

- the asset's contractual cash flows
represent SPPI.

Debt instruments included within the
FVTOCI category are measured initially
as well as at each reporting date at
fair value. Fair value movements are
recognized in the other comprehensive
income (OCI). However, interest
income, impairment losses & reversals
and foreign exchange gain or loss are
recognised in the statement of profit
and loss. On derecognition of the asset,
cumulative gain or loss previously
recognised in OCI is reclassified from
the equity to statement of profit and
loss. Interest earned whilst holding
FVTOCI debt instrument is reported as
interest income using the EIR method.

• Debt instruments at fair value through
profit or loss (FVTPL)

FVTPL is a residual category for debt

instruments. Any debt instrument,
which does not meet the criteria for
categorization as at amortized cost or
as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to
designate a debt instrument, which
otherwise meets amortized cost or fair
value through other comprehensive
income criteria, as at fair value through
profit or loss. However, such election
is allowed only if doing so reduces
or eliminates a measurement or
recognition inconsistency (referred to as
'accounting mismatch'). The Company
has not designated any debt instrument
as at FVTPL.

Debt instruments included within the
FVTPL category are measured at fair
value with all changes recognised in the
Statement of profit and loss.

• Equity instruments:

All equity investments in scope of Ind-
AS 109 are measured at fair value.
Equity instruments which are held for
trading are classified as at FVTPL. For all
other equity instruments, the Company
may make an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value.
The Company makes such election on
an instrument-by-instrument basis.
The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an
equity instrument as at FVTOCI, then
all fair value changes on the instrument,
excluding dividends, are recognized in
the OCI. There is no recycling of the
amounts from OCI to P&L, even on sale
of investment. However, the Company
may transfer the cumulative gain or loss
within equity.

Equity instruments included within the
FVTPL category are measured at fair
value with all changes recognized in the
statement of profit and loss.

• Investment in subsidiaries and

associates:

Investment in subsidiaries and

associates is carried at cost in the

standalone financial statements.

A financial asset (or where applicable a
part of a financial asset or part of a group
of similar financial assets) is primarily
derecognised (i.e. removed from the
Company's balance sheet) when:

• The rights to receive cash flows
from the asset have expired, or

• The Company has transferred its
rights to receive cash flows from
the asset or has assumed an
obligation to pay the received cash
flows in full without material delay
to a third party under a 'pass¬
through' arrangement; and either
(a) the Company has transferred
substantially all the risks and
rewards of the asset, or (b) the
Company has neither transferred
nor retained substantially all the
risks and rewards of the asset,
but has transferred control of the
asset.

When the Company has transferred
its rights to receive cash flows from
an asset or has entered into a pass¬
through arrangement, it evaluates if
and to what extent it has retained the
risks and rewards of ownership. When
it has neither transferred nor retained
substantially all of the risks and rewards
of the asset, nor transferred control of
the asset, the Company continues to
recognise the transferred asset to the
extent of the Company's continuing
involvement. In that case, the Company
also recognises an associated
liability. The transferred asset and the
associated liability are measured on
a basis that reflects the rights and
obligations that the Company has
retained.

Continuing involvement that takes the
form of a guarantee over the transferred
asset is measured at the lower of the
original carrying amount of the asset and
the maximum amount of consideration
that the Company could be required to
repay.

The Company recognizes loss allowances
using the expected credit loss (ECL) model
for the financial assets which are not fair
valued through profit or loss. Loss allowance
for trade receivables with no significant
financing component is measured at an
amount equal to lifetime ECL. For all other
financial assets, expected credit losses are
measured at an amount equal to the 12-month
ECL, unless there has been a significant
increase in credit risk from initial recognition
in which case those are measured at lifetime
ECL. The amount of expected credit losses
(or reversal) that is required to adjust the
loss allowance at the reporting date to the
amount that is required to be recognised is
recognized as an impairment gain or loss in
profit or loss.

b) Financial Liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, as appropriate.

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.

The Company's financial liabilities include
trade and other payables, loans and
borrowings.

(ii) Subsequent measurement of financial
liabilities

The measurement of financial liabilities
depends on their classification, as described
below:

• Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through
profit or loss include financial liabilities
held for trading and financial liabilities
designated upon initial recognition
as at fair value through profit or loss.
Financial liabilities are classified as held
for trading if they are incurred for the
purpose of repurchasing in the near
term.

Gains or losses on liabilities held for
trading are recognised in the profit or
loss.

Financial liabilities designated upon
initial recognition at fair value through
profit or loss are designated as such at
the initial date of recognition, and only if
the criteria in Ind-AS 109 are satisfied.
For liabilities designated as FVTPL,
fair value gains/ losses attributable
to changes in own credit risks are
recognized in OCI. These gains/ loss are
not subsequently transferred to P&L.
However, the Company may transfer
the cumulative gain or loss within equity.
All other changes in fair value of such
liability are recognised in the statement
of profit and loss. The Company has not
designated any financial liability as at
fair value through profit and loss.

• Loans and Borrowings

After initial recognition, interest-bearing
borrowings are subsequently measured
at amortised cost using the EIR method.
Gains and losses are recognised in
profit or loss when the liabilities are
derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking
into account any discount or premium
on acquisition and fees or costs that
are an integral part of the EIR. The EIR
amortisation is included as finance
costs in the statement of profit and loss.

This category generally applies to
borrowings.

(iii) Derecognition of financial liabilities

A financial liability is derecognised 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 derecognition of the original liability
and the recognition of a new liability. The
difference in the respective carrying amounts
is recognised in the statement of profit and
loss.

Financial guarantee contracts issued by the
Company are those contracts that require
specified payments to be made to reimburse
the holder for a loss it incurs because the
specified debtor fails to make a payment
when due in accordance with the terms
of a debt instrument. Financial guarantee
contracts are recognised initially as a liability
at fair value, adjusted for transaction costs
that are directly attributable to the issuance
of the guarantee. Subsequently, the liability
is measured at the higher of the amount of
loss allowance determined as per impairment
requirements of Ind-AS 109 and the amount
recognised less cumulative amortisation.

Where guarantees to subsidiaries in relation to
loans or other payables are provided for, at no
compensation, the fair values are accounted
for as contributions and recognised as fees
receivable under "other financial assets"
or as a part of the cost of the investment,
depending on the contractual terms.

c) 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.

4.12. Cash and cash equivalent

Cash and cash equivalent in the balance
sheet comprise cash at banks and on hand
and short-term deposits with an original
maturity of three months or less, which are
subject to an insignificant risk of changes in
value.

For the purpose of the statement of cash
flows, cash and cash equivalents consist of
cash and short-term deposits, as defined
above, net of outstanding bank overdrafts
as they are considered an integral part of the
Company's cash management.

4.13. Treasury shares

The Company has created an Employee
Benefit Trust (EBT) for providing share-based
payment to its employees. The Company
uses EBT as a vehicle for distributing

shares to employees under the employee
remuneration schemes. The EBT buys shares
of the company from the market, for giving
shares to employees. The Company treats
EBT as its extension and shares held by EBT
are treated as treasury shares.

Own equity instruments that are reacquired
(treasury shares) are recognised at cost
and deducted from equity. No gain or loss is
recognised in profit or loss on the purchase,
sale, issue or cancellation of the Company's
own equity instruments.

4.14. Taxes

Tax expense comprises of current income tax
and deferred tax.

Current income tax

Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted at
the reporting date.

Current income tax relating to items recognised
outside Statement of profit and loss is recognised
outside Statement of profit and loss (either in other
comprehensive income or equity). Current tax items
are recognised in correlation to the underlying
transaction either in other comprehensive income
or directly in equity. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

• When the deferred tax liability arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss;

• In respect of taxable temporary differences
associated with investments in subsidiaries

and interests in joint arrangements, when
the timing of the reversal of the temporary
differences can be controlled and it is
probable that the temporary differences will
not reverse in the foreseeable future.

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be
available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised,
except:

• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable
profit or loss;

• In respect of deductible temporary
differences associated with investments
in subsidiaries, associates and interests
in joint arrangements, deferred tax assets
are recognised only to the extent that it is
probable that the temporary differences will
reverse in the foreseeable future and taxable
profit will be available against which the
temporary differences can be utilised.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside
Statement of profit and loss is recognised outside
Statement of profit and loss. Deferred tax items
are recognised in correlation to the underlying

transaction either in other comprehensive income
or directly in equity.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.

4.15. Retirement and other employee benefits

a) Short Term Employee Benefits

All employee benefits payable within twelve
months of rendering the service are classified
as short term employee benefits. The
undiscounted amount of short term employee
benefits expected to be paid in exchange
for the services rendered by employees is
recognised during the year.

b) Post-Employment Benefits

(i) Defined benefit plan

Gratuity benefit scheme is a defined benefit
plan. The present value of the obligation
under such defined benefit plans is
determined based on the actuarial valuation
using the Projected Unit Credit Method as at
the date of the Balance sheet reduced by the
fair value of any plan assets. The discount
rate used for determining the present value of
the obligation under defined benefit plan, are
based on the market yields on Government
securities as at the balance sheet date.

Re-measurements, comprising of actuarial
gains and losses, the effect of the asset
ceiling, excluding amounts included in net
interest on the net defined benefit liability and
the return on plan assets (excluding amounts
included in net interest on the net defined
benefit liability), are recognised immediately
in the Balance Sheet with a corresponding
debit or credit to retained earnings through
OCI in the period in which they occur.
Re-measurements are not reclassified to
Statement of Profit and Loss in subsequent
periods.

Past service costs are recognised in profit or
loss on the earlier of:

• The date of the plan amendment or
curtailment, and

• The date that the Company recognises
related restructuring costs

Net interest is calculated by applying the
discount rate to the net defined benefit
liability or asset. The Company recognises the
following changes in the net defined benefit
obligation as an expense in the Statement of
profit and loss:

• Service costs comprising current
service costs, past-service costs, gains
and losses on curtailments and non¬
routine settlements; and

• Net interest expense or income

The Company has not invested in any
fund for meeting liability.

4.16. Share-based payments

Employees of the Company receive
remuneration in the form of share-
based payments, whereby employees
render services as consideration for
equity instruments (equity-settled
transactions).

Equity-settled transactions

The cost of equity-settled transactions
is determined by the fair value at the
date when the grant is made using an
appropriate valuation model.

That cost is recognised, together with a
corresponding increase in share-based
payment (SBP) reserves in equity, over
the period in which the performance
and/or service conditions are fulfilled
in employee benefits expense. The
cumulative expense recognised for
equity-settled transactions at each
reporting date until the vesting date
reflects the extent to which the vesting
period has expired and the Company's
best estimate of the number of equity
instruments that will ultimately vest. The
statement of profit and loss expense
or credit for a period represents the
movement in cumulative expense
recognised as at the beginning and
end of that period and is recognised
in employee benefits expense. No
expense is recognised for awards that
do not ultimately vest because non¬
market performance and/or service
conditions have not been met.

The dilutive effect of outstanding
options is reflected as additional share
dilution in the computation of diluted
earnings per share.

Employee Stock Appreciation Rights
(SAR)

The company has formed 'Infibeam
Employee Welfare Trust' (IEW trust) for
implementation of the schemes that
are notified or may be notified from
time to time by the Company under the
plan, providing share based payment
to its employees. IEW trust purchases
Company's shares out of funds
provided by the Company. Accordingly,
the Company has approved the grant
of Employee Stock Appreciation Rights
(SARs) to the eligible employees of the
Company. Each SAR shall confer the
right to the eligible employee to receive
appreciation (cash settled / equity
settled) with respect to the underlying
Equity Share on the entitled shares after
it has been exercised in accordance
with terms of the Scheme.

The Company follows the fair value
method to account for its Employee
Stock Appreciation Rights (SARs)
using an appropriate valuation model.
Compensation cost is measured by the
excess, if any, of the market price of the
underlying stock over the exercise price
as determined under the option plan.
The market price is the closing price
on the stock exchange where there is
highest trading volume on the working
day immediately preceding the date
of grant. Compensation cost, if any, is
amortised over the vesting period.

4.17. Earnings per share

Basic EPS amounts are calculated by dividing
the profit or loss for the year attributable to
equity shareholders for the period by the
weighted average number of equity shares
outstanding during the year.

Diluted EPS amounts are calculated by
dividing the profit or loss attributable to
equity shareholders for the period by
the weighted average number of equity
shares outstanding during the year plus the

weighted average number of equity shares
that would be issued on conversion of all the
dilutive potential equity shares into equity
shares. The dilutive potential equity shares
are adjusted for the proceeds receivable had
the equity shares been actually issued at fair
value (i.e. the average market value of the
outstanding equity shares). Dilutive potential
equity shares are deemed converted as of
the beginning of the period, unless issued at a
later date. Dilutive potential equity shares are
determined independently for each period
presented.

4.18. Segment reporting

Based on "Management Approach" as defined
in Ind AS 108 -Operating Segments, the
Chief Operating Decision Maker evaluates
the Company's performance and allocates
the resources based on an analysis of
various performance indicators by business
segments. Unallocable items includes general
corporate income and expense items which
are not allocated to any business segment.

Segment policies:

The Company prepares its segment

information in conformity with the accounting
policies adopted for preparing and presenting
the financial statements of the Company as a
whole. Common allocable costs are allocated
to each segment on an appropriate basis.

4.19. Dividend distribution

The Company recognises a liability to

make cash distributions to equity holders
of the Company when the distribution is
authorised and the distribution is no longer
at the discretion of the Company. As per
the Companies Act, 2013, a distribution

is authorised when it is approved by the
shareholders. A corresponding amount is

recognised directly in equity.