3. Summary of material accounting policies

3.1 Current versus non- current classification

The Company presents assets and liabilities in the
financial statements of assets and liabilities 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 normal operating cycle

• Held primarily for the purpose of trading

• It is 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.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• 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.

3.2 Foreign currencies

The Company's financial statements are presented in
INR, which is also its functional currency. Functional
currency is the currency of the primary economic
environment in which the Company operates and is
normally the currency in which the Company primarily
generates and expends cash.

Foreign currency transactions are recorded at the
exchange rate prevailing on the date of transaction.
Foreign currency rate fluctuations relating to monetary
assets and liabilities are restated at the year-end rates.
The net gain or loss arising on restatement/ settlement
is recorded in Statement of Profit and Loss.

Non-monetary assets and non-monetary liabilities
denominated in a foreign currency and measured
at historical cost are translated at the exchange rate
prevalent at the date of the transaction. The related
revenue and expense are recognized using the same
exchange rate.

3.3 Fair value measurement

The Company measures financial instruments such as
derivatives at fair value at each balance sheet date.

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:

1. In the principal market for the asset or liability, or

2. 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, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

1. Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

2. Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

3. 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.

External valuers may be required for valuation of
significant assets and liabilities. Involvement of external
valuers is decided on the basis of nature of transaction
and complexity involved. Selection criteria include
market knowledge, reputation, independence and
whether professional standards are maintained.

At each reporting date, the finance team analyses
the movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company's accounting policies. For this
analysis, the team verifies the major inputs applied
in the latest valuation by agreeing the information
in the valuation computation to contracts and other
relevant documents. A change in fair value of assets
and liabilities is also compared with relevant external
sources to determine whether the change is reasonable.

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.

3.4 Property, plant and equipment

An item of property, plant and equipment is recognised
as an asset if it is probable that future economic benefits
associated with the item will flow to the Company and
its cost can be measured reliably. This recognition
principle is applied to costs incurred initially to acquire
an item of property, plant and equipment and also to
costs incurred subsequently to add to, replace part
of, or service it. All other repair and maintenance
costs, including regular servicing, are recognised in
the Statement of Profit and Loss as incurred. Where
an item of property, plant and equipment comprises
major components having different useful lives, these
components are accounted for as separate items.

The cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any
directly attributable expenditure on making the asset
ready for its intended use, other incidental expenses
and interest on borrowings attributable to acquisition of
qualifying fixed assets up to the date the asset is ready
for its intended use. Subsequent expenditure on fixed
assets after its purchase / completion is capitalized only
if such expenditure results in an increase in the future
benefits from such asset beyond its previously assessed
standard of performance. The Company depreciates
property, plant and equipment over their estimated
useful lives using the Written Down Value (WDV)
method. Depreciation methods and useful lives are
reviewed periodically at each financial year end. The
gain or loss arising on disposal of an item of property,
plant and equipment is determined as the difference
between sale proceeds and carrying value of such item
and is recognised in the Statement of Profit and Loss.

3.5 Intangible assets

Design, development and software costs are included
in the balance sheet as intangible assets when it is
probable that associated future economic benefits
would flow to the Company. All other costs on the
aforementioned are expensed in the statement of
profit and loss as and when incurred. Intangible assets
are stated at cost less accumulated amortization and
accumulated impairment. The estimated useful life of
an identifiable intangible asset is based on a number of
factors including the effects of obsolescence, demand,
competition, and other economic factors (such as
the stability of the industry and known technological
advances). Amortization methods and useful lives
are reviewed periodically including at each financial
year end.

Amortisation method: The Company amortizes
intangible assets with a future useful life using the
straight-line method over following period:

Class of assets Useful life

Computer Software 3 years

3.6 Investment property

Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at
cost less accumulated depreciation and accumulated
impairment loss, if any.

The cost includes the cost of replacing parts and
borrowing costs for long-term construction projects
if the recognition criteria are met. When significant
parts of the investment properties are required to be
replaced at intervals, the Company depreciates them
separately based on their specific useful lives. All other
repair and maintenance costs are recognised in profit
or loss as incurred.

The company depreciates building component of
investment property over 60 years using written down
value method from the date of original purchase.

The company, based on technical assessment made by
technical expert and management estimate, depreciates
the building over estimated useful lives which are
different from the useful life prescribed in Schedule II
to the Companies Act, 2013. The management believes
that these estimated useful lives are realistic and reflect
fair approximation of the period over which the assets
are likely to be used.

Though the company measures investment properties
using cost-based measurement, the fair value of
investment properties are disclosed in the notes. Fair
values are determined based on an annual evaluation
performed by an accredited external independent
valuer applying a valuation model recommended by
the International Valuation Standards Committee.

Investment properties are derecognised either
when they have been disposed of or when they are
permanently withdrawn from use and no future
economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the
carrying amount of the asset is recognised in profit
or loss in the period of derecognition. In determining
the amount of consideration from the derecognition
of investment properties the Company considers
the effects of variable consideration, existence

of a significant financing component, non-cash
consideration, and consideration payable to the buyer
(if any).

Transfers are made to (or from) investment properties
only when there is a change in use. Transfers between
investment property, owner-occupied property and
inventories do not change the carrying amount of the
property transferred and they do not change the cost of
that property for measurement or disclosure purposes.

3.7 Depreciation of property, plant and equipment

Depreciation is provided on the written down value
method. The estimated useful life of each asset as
prescribed under Schedule II of the Companies Act,
2013 and based on technical assessment of internal
experts (after considering the expected usage of the
asset, expected physical wear and tear, technical and
commercial obsolescence and understanding of past
practices and general industry experience) are as
depicted below:

The residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting
period. Lease hold Improvements are amortised on a
straight-line basis over the lease period.

3.8 Leases

The Company's leased assets primarily consist of leases
for office space. 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 in exchange for consideration. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether:

• the contract involves the use of an identified asset

• the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease; and

• the Company has the right to direct the use of
the asset.

1. Right of use assets

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term
of twelve months or less (short-term leases) and low
value leases. 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 right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. Right-of-use assets are depreciated
from the commencement date on a straight-line
basis over the shorter of the lease term and useful
life of the underlying asset unless the lease transfers
ownership of the underlying asset to the Company by
the end of the lease term or the cost of the right-of-
use asset reflect that the Company exercise a purchase
option. The Company applies Ind AS 36 to determine
whether a right-of-use asset is impaired and accounts
for any identified impairment loss as described in
the accounting policy below on "Impairment of non¬
financial assets".

2. Lease liabilities

The lease liability is initially measured at amortized
cost at the present value of the future lease payments
that are not paid at the commencement date. The
lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable,
using the Company's incremental borrowing rates.
Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset (or in profit
or loss if the carrying amount of the right-of-use asset
has been reduced to zero) if the Company changes its
assessment of whether it will exercise an extension or
a termination or a purchase option. The interest cost
on lease liability (computed using effective interest
method), is expensed in the statement of profit and loss.

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. The Company has applied a practical expedient
wherein the Company has ignored the requirement to
separate non- lease components (such as maintenance
services) from the lease components. Instead, the
Company has accounted for the entire contract as a
single lease contract.

3.9 Revenue recognition

The Company has revenue from its clients. The Company
recognizes revenue when it satisfies performance
obligations under the terms of its contracts, and control
of its services is transferred to its client's users in an
amount that reflects the consideration the Company
expects to receive from its client in exchange for those
services. This process involves identifying the client
contract, determining the performance obligations in the
contract, determining the contract price, allocating the
contract price to the distinct performance obligations
in the contract, and recognizing revenue when the
performance obligations have been satisfied.

The Company through its platform allows transactions
between the consumers of its clients and service
operators enlisted with the platform. The Company
earns revenue when the consumers of its clients utilize
services such as Lounge Access, Meet and Assist, Airport
Transfers, Food and Beverages, Door-step Baggage
and Spa & Wellness either through the DreamFolks
App, DreamFolks Card, Issuer's Card, Issuer's Website,
Issuer's web or mobile Application (App) or Interactive
voice response (IVR).

Revenue is recognised in the accounting period in which
the services are rendered. A receivable is recognised
when the services are delivered as this is the point in
time that the consideration is unconditional because
only the passage of time is required before the payment
is due.

Cash received before the goods and services are
delivered is recognised as a contract liability.

Financing Components: The Company does not expect
to have any contracts where the period between the
transfer of the promised goods or services to the
customer and payment by the customer exceeds
one year. As a consequence, the Company does not
adjust any of the transaction prices for the time value
of money.

Other income

I nterest income from a financial asset is recognised when
it is probable that the economic benefits will flow to the
Company and the amount of income can be measured
reliably. Interest income is accrued on a time proportion
basis, by reference to the principal outstanding and
effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset's net carrying amount on initial recognition.

Share of profit/(loss) from partnerships firm

Share of profit/(loss) from partnership firm are
recognised on accrual basis.

3.10Retirement and other employee benefits

Employee benefits include provident fund,
employee state insurance scheme, gratuity and
compensated absences.

Long-term employee benefits:

Defined contribution plans: The Company's contribution
to provident fund and employee state insurance
scheme are considered as defined contribution plans
and are charged as an expense based on the amount
of contribution required to be made and when services
are rendered by the employees.

Defined benefit plans: The Company has Defined
Benefit Plan in the form of Gratuity. Liability for
Defined Benefit Plans is provided on the basis of
valuations, as at the balance sheet date, carried out by
an independent actuary. The defined benefit obligation
is calculated annually by independent actuary using
the projected unit credit method. The present value
of the defined benefit obligation is determined by
discounting the estimated future cash outflows using
discount rate (interest rates of government bonds) that
have terms to maturity approximating to the terms of
the gratuity. Remeasurement gains and losses arising
from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They
are included in 'Other comprehensive income' (net of
taxes) in the statement of changes in equity and in the
balance sheet. Net interest is calculated by applying
the discount rate to the net defined benefit liability or
asset. The Company presents the first two components
of defined benefit costs in profit or loss in the line item
'Employee Benefits Expense'.

Short-term employee benefits:

The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the services
rendered by employees are recognised during the year
when the employees render the service. These benefits
include performance incentive and compensated
absences which are expected to occur within twelve
months after the end of the period in which the employee
renders the related service. The cost of short-term
compensated absences is accounted as under:

• in case of accumulated compensated absences, when
employees render the services that increase their
entitlement of future compensated absences; and

• in case of non-accumulating compensated absences,
when the absences occur.

3.11 Share based payments

Employees (including senior executives) of the Company
receive remuneration in the form of share based payment
transactions, whereby employees render services as
consideration for equity instruments (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 Options outstanding 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.

When the terms of an equity-settled award are modified,
the minimum expense recognised is the expense had
the terms had not been modified, if the original terms of
the award are met. An additional expense is recognised
for any modification that increases the total fair value
of the share-based payment transaction or is otherwise
beneficial to the employee as measured at the date
of modification. Where an award is cancelled by the
entity or by the counterparty, any remaining element
of the fair value of the award is expensed immediately
through profit or loss.

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

3.12 Taxes

a. Current income tax

Current tax is the tax payable on the taxable profit
for the year. Taxable profit differs from 'profit before
tax' as reported in the Statement of Profit and Loss
because of items of income or expense that are taxable
or deductible in other years and items that are never
taxable or deductible. The Company's current tax is
calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting
period, in accordance with the Income Tax Act, 1961.

Current income tax relating to items recognised outside
financial statements profit and loss is recognised
outside financial statements profit and loss (either in
other comprehensive income or in equity). Current tax
items are recognised in correlation to the underlying
transaction either in OCI 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.

Advance taxes and provisions for current income taxes
are presented in the statement of assets and liabilities
after off-setting advance tax paid and income tax
provision arising in the same tax jurisdiction and where
the relevant tax paying units intends to settle the asset
and liability on a net basis.

b. Deferred taxes

Deferred tax assets and liabilities are recognized for
the future tax consequences of temporary differences
between the carrying values of assets and liabilities
and their respective tax bases. Deferred tax assets are
recognised for all deductible temporary differences and
unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary
differences and losses.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.

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

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and where the deferred tax balances
relate to the same taxation authority.

Current tax assets and tax liabilities are off set where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize the
asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.

3.13 Segment reporting

Operating segments are defined as components of an
entity where discrete financial information is evaluated
regularly by the chief operating decision maker
(“CODM” ) in deciding allocation of resources and in
assessing performance. The Company's Managing
Director is its CODM. The Company's CODM reviews
financial information presented on a consolidated basis
for the purposes of making operating decisions, allocating
resources, and evaluating financial performance. Our
business activity primarily falls within a single business
and geographical segment, hence, the disclosure of
segment-wise information is not applicable under Ind
AS 108- 'Operating Segments'.

3.14 Earnings per share

Basic earnings per share is computed using the weighted
average number of equity shares outstanding during the
period. Diluted earnings per share is computed using
the weighted-average number of equity and dilutive
equivalent shares outstanding during the period, except
where the results would be anti-dilutive.

The number of equity shares and potentially dilutive
equity shares are adjusted retrospectively for all
periods presented for any splits and bonus shares issues
including for change effected prior to the approval of
the financial Information by the Board of Directors.