The company has received a refund on February 2, 2024 for an amount of H356.3 million, and on March 18, 2024, a further sum of H18.3 million, in the matter pertaining to cancellation of lease allotment by Karnataka Industrial Area Development Board of 15 acres of land in Bengaluru Urban District. Thus, the cost of acquisition of land (excluding stamp duty, registration charges etc.) paid by the company for this land allotment stands recovered and the ongoing legal proceedings in the Hon’ble High Court of Karnataka pertaining to the land are disposed.

*During the year ended March 31, 2024, the company has given a loan of H0.2 million ( March 31,2023 H0.3 million ) to MYJD Private Limited (wholly owned subsidiary of the company) which was repayable on demand (interest rate ranging from 7% to 8.5%). During the year, the entire outstanding loan of H0.7 million has been repaid with interest by MYJD Private Limited.

**The company has a policy, wherein on the request of employees, salary advance is given to employees after considering eligibility criteria defined in policy. Further such advances are interest free and repayable, in 3 months. However company can extend the tenure and reconsider eligibility criteria beyond the policy terms on an exceptional basis as per management’s approval.

Rights, preferences and restrictions attached to shares

The company has only one class of equity shares having face value of H10 each. The holder of the equity share is entitled to dividend right and voting right in the same proportion as the capital paid-up on such equity share bears to the total paid-up equity share capital of the company. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company in the same proportion as the capital paid-up on the equity shares held by them bears to the total paid-up equity share capital of the company.

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

In addition the company has issued total 2,245,898 shares (March 31, 2023: 1,649,848) during the period of five years immediately preceding the reporting date on exercise of option granted under the employee stock option plan (ESOP) wherein part consideration was received in the form of employee services.

(vii) Shares reserved for issue under options

For details of shares reserved for issue under the ESOP of the company, refer note 28.

III) Performance obligation

1) Search related services

The performance obligation for search related services is satisfied after the provision of services over the period of contract.

2) Software and website services

The performance obligation for website development is satisfied on delivery of software and first time hosting and related services is satisfied over the tenure of contract.

3) Review and rating certification

The performance obligation is satisfied at the time of delivery of certificate to the customer.

4) Transaction service fee

The performance obligation is satisfied after the services are rendered on which the fees are levied.

IV) Cost to obtain contract

The company pays sales incentives to its employees for each contract that they obtain. The company has elected to defer the expense in the nature of sales incentives (included under employee benefits) over the duration of contract based on which the revenue is deferred.

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. 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.

27: Gratuity and other post-employment benefits plans

I) Defined contribution plan

Contribution to provident fund of H258.4 million (March 31, 2023 - H257.2 million) is recognised as an expense in Note 19 ‘Employee benefits expense’ of the Statement of profit and loss.

II) Defined benefit plan

The company has a defined benefit gratuity funded plan. Every employee who has completed five years or more of service gets a gratuity on resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The defined benefit plan expose the company to actuarial risks such as interest rate risk, longevity risk and salary risk:

i) Interest rate risk : A decrease in the bond interest rate will increase the plan’s liability.

ii) Longevity rate risk : The present value of defined benefit liability is calculated by reference to the best estimate of mortality of plan participants both during and after the employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

iii) Salary risk : The present value of defined benefit liability is calculated by reference to the future salaries of plan participants. As such an increase in the salary of plan participants will increase the plan’s liability.

Methods and assumptions used in preparing sensitivity and their limitations: The liability was projected by changing certain assumptions and the total liability post the change in such assumptions have been captured in the table above. This sensitivities are based on change in one single assumption, other assumptions being constant. In practice, scenario may involve change in several assumptions where the stressed defined benefit obligation may be significantly impacted.

The company has not made any new grants during the current year and in the previous year.

Exercise period for all the ESOP schemes is seven years from the date of vesting of the options.

The carrying amount of Employee stock options reserve as at March 31,2024 is H5.4 million ( March 31,2023 - H237.0 million). The expense recognised for employee services received during the year ended March 31,2024 is (H3.5) million ( March 31, 2023 - H95.4 million)

1) There are certain cases against the company pending in various courts. The Management believes that based on legal/technical advice from experts that the ultimate outcome of these cases will not have a material/ adverse impact on the company’s financial position and results of operations.

2) The company is contesting the income-tax demands and the Management believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company’s financial position and results of operations.

Uncertain direct tax litigation

The Hon’ble Commissioner of Income-tax (Appeals) (CIT(A)), National Faceless Appeal Center (NFAC) has passed appellate orders with respect to ongoing disputes with income-tax authorities of India pertaining to tax treatment of certain expenses for Assessment Year A.Y. 2017-18 , A.Y. 2018-19, A.Y. 2020-21 and A.Y. 2021-22. The company has received favourable orders from CIT(A) for A.Y. 2018-19, A.Y. 2020-21 and A.Y. 2021-22. In relation to A.Y. 2017-18, the company has received partially favourable order from CIT(A). Income-tax assessment is completed till A.Y. 2022-23.

A.Y. 2017-18

The demand of H80.9 million was raised for A.Y. 2017-18 on the company by Deputy Commissioner of Income Tax (DCIT) / Assessing officer (AO). Thereafter, an order dated March 24, 2023 was passed by NFAC with addition of H0.07 million to total income of the company and determined the revised tax payable as H62.1 million (the total demand as per the NFAC’s order was H81.4 million. The company had paid H6.8 million and H14.4 million was adjusted by the tax department against earlier years refunds which resulted to total tax payment of H21.2 million. Thus H62.1 million was the net demand as per NFAC order).

On December 5, 2023, the company had received partially favourable order from the NFAC. The company has filed an Order Giving Effect (OGE) application on December 18, 2023 with jurisdictional AO for the order received from the NFAC, The revised demand as per the OGE application is H44.0 million (including interest).

Further, the company has filed an appeal challenging the order passed by the NFAC with the Income tax Appellate Tribunal (ITAT) on January 18, 2024 which is pending for disposal.

The company has also filed application for the rectification with the AO on April 27, 2023 as there was a short credit of TDS in the order passed by NFAC.

The company has received two show cause notices from the Income tax department on April 9, 2024 for penalty under sections 270A and 271AAC(1) of the Income tax Act, 1961. The company has replied to these show cause notices on April 15, 2024, denying grounds of penalty levied by the Department.

A.Y. 2018-19

There was no outstanding demand for A.Y. 2018-19. However, there were some additions as per the Assessment Order for A.Y. 2018-19 against which the company had filed an appeal on May 23, 2021 before the NFAC. During the year, the company has received a favourable order from the NFAC on December 5, 2023. The company has filed an OGE application on December 18, 2023 with jurisdictional AO for processing refund of H0.0 million.

A.Y. 2020-21

The demand of H10.22 million was raised for A.Y. 2020-21. However, there were some additions as per the Assessment Order for A.Y. 2020-21 against which the company had filed rectification application with the AO on October 21,2022 and an appeal before the NFAC on October 20, 2022.

During the year, the company has received a favourable order from the NFAC on December 5, 2023. The company has filed an OGE application on December 18, 2023 with jurisdictional AO for processing refund of H19.5 million.

A.Y. 2021-22

The demand of H28.0 million was raised for A.Y. 2021-22. However, there were some additions as per the Assessment Order for A.Y. 2021-22 against which the company had filed rectification application with the AO on January 13, 2023 and an appeal before the NFAC on January 12, 2023. During the year, the company has received a favourable order from the NFAC on December 5, 2023. The company has filed an OGE application on December 18, 2023 with jurisdictional AO for processing refund of H1.2 million

A.Y. 2022-23

The company has received intimation under section 143(1) and demand under section 143(3) from the AO on March 28, 2024 where a demand is raised for A.Y. 2022-23 for H120.6 million. The company has filed an appeal with the NFAC challenging the aforesaid demand on April 15, 2024.

Assistant Commissioner of Income Tax (ACIT) has filed an appeal with ITAT on February 2, 2024 for the A.Y. 2017-18, A.Y. 2018-19, A.Y. 2020-21 and A.Y. 2021-22 against the orders passed by the NFAC. A copy of the appeal documents are not yet provided by the tax authorities to the company. The company has filed a letter with the ITAT to provide the documents related to the aforesaid appeal on April 1, 2024.

Based on Management’s evaluation it expects the tax authorities to accept the tax treatment considered by the company for all the above-mentioned years and disputes and thereby does not expect any material impact on the taxable profits/ losses in the future periods. Consequently, provision for this uncertain tax position is not recorded.

30: Details of dues to micro and small enterprises as per micro, small and medium enterprises development (MSMED) act, 2006

The information regarding Micro or Small Enterprises has been determined on the basis of information available with the Management, which has been relied upon by the auditors.

31: Capital management

For the purpose of the company’s capital management, capital includes issued capital and all other Equity reserves. The primary objective of the company’s capital management is to ensure the going concern operation and to maintain an efficient capital structure to support the corporate strategy and maximise shareholder value.

The capital structure is governed by policies approved by the Board of Directors and is monitored by various metrics. The company maintains focus on capital efficiency without incurring material indebtedness and has positive working capital and free cash flows. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2024 and March 31, 2023.

32: Financial instruments

The fair values of the financial assets and liabilities are included 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 table provides the fair value measurement hierarchy of financial assets and liabilities.

The Management assessed that cash and cash equivalents, loans, other financial assets, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The Management assessed that fair value of deposits and other liabilities approximate their carrying amount since they are carried at amortised cost in these financial statements.

There have been no transfers between Level 1 and Level 2 during the year ended March 31,2024 and March 31,2023.

33: Financial risk management objectives and policies

The company’s financial risk management is an integral part of how to plan and execute its business strategies. The company’s financial risk management policy is set by the Board of Directors.

The key risks include market risk, credit risk and liquidity risk. The Board of Directors reviews and agrees policies and procedures for management of these risks.

a) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments.

i) Interest rate risk

The company does not have any borrowings. The company’s investment in debt instruments and loans given by the company are at fixed interest rates, consequently the company is not exposed to interest rate risk. In order to optimise the company’s position with regards to finance income and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by continuous review of investment portfolio and portfolio exposure to instruments having lower credit rating, balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Thus, the company is not exposed to significant interest rate risk as at the respective reporting dates.

ii) Foreign currency exchange risk

The company undertakes minimal transactions denominated in foreign currency, consequently exposures to exchange rate fluctuations is not significant.

The Management has taken a position not to hedge this currency risk.

iii) Equity and other price risk

The company is exposed to equity price risks arising from equity investments. The company’s equity investments are held for strategic rather than trading purposes.

b) Credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty fails to meet its contractual obligations and arises principally from the company’s receivables from rental deposits given, loans given, investments made and balances at bank.

The carrying amount of financial assets represents the maximum credit exposure. Credit risk on cash and cash equivalents is limited as the company generally invest in deposits with banks and financial institutions with high credit ratings assigned by credit-rating agencies. The credit risk on mutual funds, and debt instruments is limited because the counterparties are generally banks, financial institutions and sovereign bonds with high credit ratings assigned by credit rating agencies.

None of the financial instruments of the company result in material concentrations of credit risk. The company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

c) Liquidity risk

Liquidity risk is the risk that the company will not be able to settle or meet its obligations as they fall due. The company’s policy on liquidity risk is to maintain sufficient liquidity in the form of cash and investment in liquid mutual funds to meet the company’s operating requirements with an appropriate level of headroom. In addition, processes and policies related to such risks are overseen by senior management. The Management monitors the company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

36: Disclosure as per schedule III of the companies act 2013

i) The company has title deeds for all the immovable properties held in the name of the company.

ii) The company does not have any benami properties. There are no proceedings initiated or pending against the company for holding Benami property under Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules thereunder.

iii) The company is not declared as a ‘wilful defaulter’ by any bank or financial institution or other lender.

iv) During the year, the company has no transactions with struck off companies under section 248 of Companies Act 2013 or section 560 of Companies Act 1956.

Details of transactions with struck off companies under section 248 of Companies Act 2013 or section 560 of Companies Act 1956 for the year ended March 31,2023 is as follows:

v) There no charges or satisfaction yet to be registered with Registrar of Companies (ROC).

vi) The company has not traded or invested in crypto currency or virtual currency.

vii) The company does not have any transactions recorded in the books of account that has been surrendered or disclosed as income during the year in the assessments under Income Tax Act, 1961.

viii) The company does not have any Capital-work-in progress or intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan.

ix) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entity(ies) (intermediaries) with the understanding 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.

x) The company has not received any fund from any other person(s) or entity(ies), including foreign entity(ies) (funding party) with the understanding (whether recorded in writing or otherwise) that the funding party shall ;

a) directly or indirectly lend or invest in other persons or entities indentified 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.

xi) The company has not declared any dividend in the current year and in the previous year.

37: Subsequent Events

The Standalone financial statements of the company for the year ended March 31, 2024, were reviewed by the Audit Committee and were approved by the Board of Directors at their meeting held on April 17, 2024.