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.

The classification of liabilities is based on
rights existing at the reporting date and is
unaffected by management's expectations
regarding settlement after the reporting
period.

Where the Company's right to defer
settlement is subject to compliance with
specified covenants, such right exists only if
the Company complies with those covenants
on or before the reporting date, unless the
terms of the arrangement provide otherwise.

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. Discontinued Operations

A discontinued operation is a component of
the Company's operations that has either
been disposed of or is classified as held for
sale and represents a separate major line of
business or geographical area of operations.

When an operation is classified as a
discontinued operation, the results of such
operation are presented separately in the
Statement of Profit and Loss. The profit or
loss from discontinued operations comprises
the post-tax profit or loss of the discontinued
operation and the post-tax gain or loss
recognised on the measurement to fair value
less costs to sell or on disposal of the related
assets or disposal group.

Revenue, expenses, gains, losses and related
income taxes attributable to discontinued
operations are disclosed separately from
continuing operations for the current and
comparative periods presented in the
financial statements, to the extent required
by applicable accounting standards.

During the year, the Company disposed
of one of its business segments as a going
concern to its subsidiary. Accordingly, the
financial results attributable to the disposed
segment up to the date of disposal have been
presented as "Profit/(Loss) from Discontinued
Operations" in the Statement of Profit and
Loss in accordance with Ind AS 105.

4.4. 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).

The Company assesses at each reporting
date whether a foreign currency is
exchangeable into another currency. A
currency is considered exchangeable when
the Company can obtain the other currency
within a normal administrative period through
a market or exchange mechanism that
creates enforceable rights and obligations.

Where exchangeability between two
currencies is lacking at the measurement
date, the Company estimates the spot
exchange rate that would have applied in an
orderly exchange transaction between market
participants under prevailing economic
conditions and uses such estimated rate for
translation purposes.

Exchange differences arising from the use
of estimated exchange rates are recognised
in profit or loss unless another Standard
requires recognition elsewhere.

4.5. 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)

4.6. 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.

4.7. 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.

4.8. 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.

4.9. 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.

4.10 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.

4.11 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.

4.12 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. Financial assets are classified
based on the Company's business model for
managing the assets and the contractual
cash flow characteristics of the financial
asset. In assessing whether contractual cash
flows represent solely payments of principal
and interest, the Company considers all
contractual terms, including contingent
events, sustainability-linked features and
other contractual mechanisms that may
modify the timing or amount of cash flows.

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.

• 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.

(iv) Impairment of financial assets

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.

(v) Financial Risk Management and
Financial Instrument Disclosures

The Company provides qualitative and
quantitative disclosures that enable
users of the financial statements to
understand the significance of financial
instruments for its financial position
and performance, including information
regarding instruments with contractual
features that may affect future cash
flows or classification assessments.

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.

(iv) Financial guarantee contracts:

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.

4.13 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.

4.14 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.

4.15 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.

4.16 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.

4.17 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 with
employees is measured at the fair value of the
equity instruments granted on the grant date
in accordance with SEBI regulation and Ind
As 102: Share based payment. The fair value
is determined using an appropriate option
pricing model, taking into account the terms
and conditions upon which the instruments
are granted.

The cost is recognized as an employee
benefits expense in the Statement of Profit
and Loss over the vesting period, with a
corresponding increase in "Stock Option
Outstanding reserve" under equity.

The fair value of equity-settled share-
based payment awards is recognised as an
employee benefits expense over the vesting
period during which the applicable service
and/or performance conditions are satisfied,
with a corresponding credit to Share-Based
Payment (SBP) Reserve within equity.

At each reporting date up to the vesting
date, the cumulative expense recognised
reflects the extent to which the vesting
period has elapsed and the Company's best
estimate of the number of equity instruments
expected to ultimately vest. The charge or
credit recognised in the Statement of Profit
and Loss for a reporting period represents
the movement in the cumulative expense
recognised between the beginning and the
end of that period and is included within
employee benefits expense.

No expense is recognised in respect of
awards that do not ultimately vest due to the

failure to satisfy non-market performance
conditions and/or service conditions.

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.

4.18 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.

The shares held by the Trust are treated as
treasury shares and are deducted from the
total number of equity shares for the purpose
of calculating Basic Earnings per share and
Diluted Earnings per share (EPS).

4.19 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.

During the year, the Company had transferred
its Platform Business Undertaking on a going
concern basis through a slump sale to Rediff.
com India Limited ("Rediff"), subsidiary of the
Company. Accordingly, the Company now
operates in a single business segment i.e.
"Payment Business" which includes Payment
Gateway business with CC Avenue business
brand and payment infrastructure including
CPGS towards banks, and Credit & Lending
related business. Accordingly, the financial
statement reflect the performance of a single
operating segment, and no separate segment
disclosures are presented.

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.

4.20 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.