3 MATERIAL ACCOUNTING POLICY INFORMATION

a. Financial instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

i. Recognition and initial measurement

Trade receivables and debt instruments
(such as security deposits) issued are
initially recognised when they are originated.
All other financial assets and financial
liabilities are initially recognised when the
Company becomes a party to the contractual
provisions of the instrument.

A financial asset or financial liability is initially
measured at fair value plus, for an item not
at fair value through profit and loss (FVTPL),
transaction costs that are directly attributable
to its acquisition or issue.

ii. Classification and subsequent measure¬
ment

Financial assets

On initial recognition, a financial asset is
classified as measured at

- amortised cost;

- Fair Value through Other Comprehensive
Income (FVOCI) - debt investment;

- Fair Value through Other Comprehensive
Income (FVOCI) - equity investment; or

- Fair Value through profit and loss
(FVTPL)

Financial assets are not reclassified
subsequent to their initial recognition, except
if and in the period the Company changes
its business model for managing financial
assets.

A financial asset is measured at amortised
cost if it meets both of the following
conditions and is not designated as at FVTPL:

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

- the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding. This assessment
is referred to as the SPPI test and is
performed at an instrument level.

A debt investment is measured at FVOCI if it
meets both of the following conditions and is
not designated as at FVTPL:

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

- the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding. This assessment
is referred to as the SPPI test and is
performed at an instrument level.

On initial recognition of an equity investment
that is not held for trading, the Company
may irrevocably elect to present subsequent
changes in the investment's fair value in OCI
(designated as FVOCI - equity investment).
This election is made on an instrument- by¬
instrument basis.

Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company’s
continuing recognition of the assets.

Financial assets that are held for trading or
are managed and whose performance is
evaluated on a fair value basis are measured
at FVTPL.

All financial assets not classified as
measured at amortised cost or FVOCI as
described above are measured at FVTPL.
On initial recognition, the Company may
irrevocably designate a financial asset that
otherwise meets the requirements to be
measured at amortised cost or at FVOCI as at
FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would
otherwise arise.

Financial liabilities

Classification, subsequent measurement
and gains and losses

Financial liabilities are classified as
measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL
if it is classified as held- for- trading, or it
is a derivative or it is designated as such
on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net
gains and losses, including any interest
expense, are recognised in profit or loss.
Other financial liabilities are subsequently
measured at amortised cost using the
effective interest method. Interest expense
and foreign exchange gains and losses are
recognised in profit or loss. Any gain or loss
on derecognition is also recognised in profit
or loss.

iii. Derecognition
Financial assets

The Company derecognises a financial asset
when the contractual rights to the cash flows
from the financial asset expire, or it transfers
the rights to receive the contractual cash
flows in a transaction in which substantially
all of the risks and rewards of ownership of
the financial asset are transferred or in which
the Company neither transfers nor retains
substantially all of the risks and rewards of
ownership and does not retain control of the
financial asset.

If the Company enters into transactions
whereby it transfers assets recognised on
its balance sheet, but retains either all or
substantially all of the risks and rewards of
the transferred assets, the transferred assets
are not derecognised.

Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company’s
continuing recognition of the assets.

Financial liabilities

The Company derecognises a financial
liability when its contractual obligations are
discharged or cancelled, or expire.

The Company also derecognises a financial
liability when its terms are modified and the
cash flows under the modified terms are
substantially different. In this case, a new
financial liability based on the modified terms
is recognised at fair value. The difference
between the carrying amount of the financial
liability extinguished and the new financial
liability with modified terms is recognised in
profit or loss.

iv. Offsetting

Financial assets and financial liabilities are
offset and the net amount presented in the
balance sheet when, and only when, the
Company currently has a legally enforceable
right to set off the amounts and it intends

either to settle them on a net basis or to
realise the asset and settle the liability
simultaneously.

b. Property, plant and equipment

i. Recognition and measurement

I tems of property, plant and equipment are
measured at cost, which includes capitalised
borrowing costs, less accumulated
amortisation and accumulated impairment
losses, if any.

Capital work-in-progress is stated at cost,
net of accumulated impairment losses, if
any.

Cost of an item of property, plant and
equipment comprises its purchase
price, including import duties and non¬
refundable purchase taxes, after deducting
trade discounts and rebates, any directly
attributable cost of bringing the item to its
working condition for its intended use and
estimated costs of dismantling and removing
the item and restoring the site on which it is
located.

Cost of replacing part of the PPE, borrowing
costs where recognition criteria is met, cost
of major inspection and estimated costs
of dismantling and removing the item and
restoring the site on which it is located
is recognised in the carrying amount of
PPE All other repairs and maintenance are
recognised in statement of Profit & Loss.

If significant parts of an item of property,
plant and equipment have different useful
lives, then they are accounted for as separate
items (major components) of property, plant
and equipment.

Any gain or loss on disposal of an item of
property, plant and equipment is recognised
in profit or loss.

Advances paid towards the acquisition of
property plant and equipment outstanding
at each Balance sheet date are disclosed as
capital advances under Non-current assets.

ii. Subsequent expenditure

Subsequent expenditure related to an item
of property, plant and equipment is added to
its book value only if it increases the future

benefits from the existing assets beyond it
previously assessed standard performance.
All other expenses on existing property, plant
and equipment, including day to day repairs
and maintenance expenditure and cost of
replacing parts are charged to the statement
of profit and loss for the year during which
such expenses are incurred.

iii. Depreciation

Depreciation is calculated on costs of
items of property, plant and equipment less
their estimated residual values over their
estimated useful lives using the written down
value method, and is generally recognised in
the statement of profit and loss.

The useful lives of items of property, plant and
equipment for the current and comparative
periods estimated by management are also
in line with those specified in Schedule II to
the Companies Act, 2013 and are as follows:

Depreciation method, useful lives and
residual values are reviewed at each financial
year-end and adjusted if appropriate.

Depreciation on additions (disposals) is
provided on a pro-rata basis i.e. from (upto)
the date on which asset is ready for use
(disposed of).

c. Intangible assets

i. Brands

Brands acquired on business combination is
initially recognised at fair value. Subsequent
to initial recognition the Brands are assessed
between those having indefinite useful lives
and those having definite useful lives. Brands
with indefinite useful lives are recognised
at their carrying value less impairment

losses. Brands with definite useful lives, are
amortised over their estimated useful lives.
Amortisation method and amortisation
period is reviewed by the management and
changes in the estimated useful life are
made if the same are expected to be used
for shorter period than the initial estimated
period.

ii. Customer contracts

Customer contracts / relationships acquired
on business combination is initially
recognised at fair value. Subsequent to
initial recognition the intangible asset’s
amortisation method and amortisation
period is reviewed by the management and
changes in the estimated useful life are
made if the same are expected to be used
for shorter period than the initial estimated
period.

iii. Content writing

Intangible assets for content writing are
initially recognised at cost of acquisition.
Subsequent measurement is at cost less
accumulated amortisation and impairment
loss, if any.

iv. Other intangible assets

Other intangible assets are initially
measured at cost. Such intangible assets
are subsequently measured at cost
less accumulated amortisation and any
accumulated impairment losses.

v. Internally generated Intangible Asset

Research costs are charged to the statement
of Profit and Loss in the year in which they
are incurred. Platform development costs
incurred are recognised as intangible assets,
when feasibility has been established,
the Company has committed technical,
financial and other resources to complete
the development and it is probable that
asset will generate future economic benefits.
The costs capitalised includes the salary
cost of employees exclusively working on
platform development upto the date the
asset is available for use. Platform costs
is amortised on a straight line basis over a
period of 4 years.

e. Impairment

i. Impairment of financial instruments

The Company recognises loss allowances
for expected credit losses on financial assets
measured at amortised cost. The Company
measures loss allowances at an amount
equal to lifetime expected credit losses.

Loss allowances for trade receivables are
always measured at an amount equal to
lifetime expected credit losses. Lifetime
expected credit losses are the expected
credit losses that result from all possible
default events over the expected life of a
financial instrument.

In all cases, the maximum period considered
when estimating expected credit losses is
the maximum contractual period over which
the Company is exposed to credit risk.

ii. Impairment of non-financial assets

The Company’s non-financial assets, other
than inventories and deferred tax assets, are
reviewed at each reporting date to determine
whether there is any indication of impairment.
If any such indication exists, then the asset’s
recoverable amount is estimated. Goodwill
and brand value are tested annually for
impairment.

For impairment testing, assets that do not
generate independent cash inflows are
grouped together into cash-generating units
(CGUs). Each CGU represents the smallest
group of assets that generates cash inflows
that are largely independent of the cash
inflows of other assets or CGUs.

Goodwill arising from a business combination
is allocated to CGUs or groups of CGUs that
are expected to benefit from the synergies of
the combination.

The recoverable amount of a CGU (or an
individual asset) is the higher of its value in
use and its fair value less costs to sell. Value
in use is based on the estimated future cash
flows, discounted to their present value using
a pre-tax discount rate that reflects current
market assessments of the time value of
money and the risks specific to the CGU (or
the asset).

An impairment loss is recognised if the
carrying amount of an asset or CGU
exceeds its estimated recoverable amount.
Impairment losses are recognised in the
statement of profit and loss. Impairment loss
recognised in respect of a CGU is allocated
first to reduce the carrying amount of any
goodwill allocated to the CGU, and then to
reduce the carrying amounts of the other
assets of the CGU (or group of CGUs) on a
pro rata basis.

An impairment loss in respect of goodwill is
not subsequently reversed. In respect of other
assets for which impairment loss has been
recognised in prior periods, the Company
reviews at each reporting date whether there
is any indication that the loss has decreased
or no longer exists. An impairment loss is
reversed if there has been a change in the
estimates used to determine the recoverable
amount. Such a reversal is made only to the
extent that the asset’s carrying amount does
not exceed the carrying amount that would
have been determined, net of amortisation or
amortisation, if no impairment loss had been
recognised.

f. Employee benefits

i. Short-term employee benefits

Short-term employee benefit obligations
are measured on an undiscounted basis
and are expensed as the related service is
provided. A liability is recognised for the
amount expected to be paid e.g., under
short-term cash bonus, if the Company has
a present legal or constructive obligation to
pay this amount as a result of past service
provided by the employee, and the amount of
obligation can be estimated reliably.

ii. Share-based payment transactions

The grant date fair value of equity settled
share-based payment awards granted to
employees is recognised as an employee
expense, with a corresponding increase in
equity, over the period that the employees
unconditionally become entitled to the
awards. The amount recognised as expense
is based on the estimate of the number of
awards for which the related service and
non-market vesting conditions are expected

to be met, such that the amount ultimately
recognised as an expense is based on the
number of awards that do meet the related
service and non-market vesting conditions at
the vesting date. For share-based payment
awards with non-vesting conditions, the grant
date fair value of the share-based payment
is measured to reflect such conditions and
there is no true-up for differences between
expected and actual outcomes.

iii. Defined contribution plans

A defined contribution plan is a post¬
employment benefit plan under which
an entity pays fixed contributions into
a separate entity and will have no legal
or constructive obligation to pay further
amounts. The Company makes specified
monthly contributions towards Government
administered provident fund scheme.
Obligations for contributions to defined
contribution plans are recognised as an
employee benefit expense in profit or loss in
the periods during which the related services
are rendered by employees.

Prepaid contributions are recognised as an
asset to the extent that a cash refund or a
reduction in future payments is available.

iv. Defined benefit plans

A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan. The Company’s net obligation in
respect of defined benefit plans is calculated
separately for each plan by estimating the
amount of future benefit that employees
have earned in the current and prior periods,
discounting that amount and deducting the
fair value of any plan assets.

The calculation of defined benefit obligation
is performed annually by a qualified actuary
using the projected unit credit method. When
the calculation results in a potential asset
for the Company, the recognised asset is
limited to the present value of economic
benefits available in the form of any future
refunds from the plan or reductions in future
contributions to the plan ('the asset ceiling’).
In order to calculate the present value of
economic benefits, consideration is given to
any minimum funding requirements.

Remeasurements of the net defined benefit
liability, which comprise actuarial gains and
losses, the return on plan assets (excluding
interest) and the effect of the asset ceiling
(if any, excluding interest), are recognised
in OCI. The Company determines the net
interest expense (income) on the net defined
benefit liability (asset) for the period by
applying the discount rate used to measure
the defined benefit obligation at the beginning
of the annual period to the then-net defined
benefit liability (asset), taking into account
any changes in the net defined benefit
liability (asset) during the period as a result
of contributions and benefit payments. Net
interest expense and other expenses related
to defined benefit plans are recognised in
profit or loss.

When the benefits of a plan are changed or
when a plan is curtailed, the resulting change
in benefit that relates to past service ('past
service cost’ or 'past service gain’) or the
gain or loss on curtailment is recognised
immediately in profit or loss. The Company
recognises gains and losses on the
settlement of a defined benefit plan when the
settlement occurs.

v. Other long term employee benefit

The Company’s liability in respect of other
long-term employee benefits (compensated
absences is the amount of future benefit that
employees have earned in return for their
service in the current and prior periods, that
benefit is discounted to determine its present
value, and the fair value of any related assets
is deducted. The obligations measured on
the basis of an annual independent actuarial
valuation using the Projected Unit Credit
method. Remeasurement gains or losses are
recognised in profit or loss in the period in
which they arise.