3. Significant Accounting Policies

The significant accounting policies applied in preparation of
the financial statements are as given below:

3.1 Financial instruments

3.1.1. Financial Assets

A. initial recognition and measurement

All financial assets are recognized initially at fair value, which
is normally the transaction price. Transaction costs that are
directly attributable to the acquisition of financial assets
(other than financial assets at fair value through Statement
of Profit or Loss ('FVTPL)) are added to the fair value of the
financial assets, on initial recognition. Such transaction cost
includes all fees paid or received between parties to the
contract that would not have been incurred if the entity had
not acquired the financial asset. Transaction costs directly
attributable to the acquisition of financial assets at FVTPL are
recognized immediately in Statement of Profit and Loss.

B. Subsequent Measurement

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

a) Financial assets measured at amortized cost

b) Financial assets measured at fair value through other
comprehensive income (FVTOCI);

c) Financial assets measured at fair value through profit or
loss (FVTPL);

The classification depends on the contractual terms of the
financial assets' cash flows and the company's business
model for managing financial assets.

Business model assessment

The Company determines its business model at the level that
best reflects how it manages company's financial assets to
achieve its business objective.

The Company's business model is not assessed on an
instrument-by-instrument basis, but at a higher level of
aggregated portfolios and is based on observable factors
such as:

• How the performance of the business model and the
financial assets held within that business model are
evaluated and reported to the entity's key management
personnel

• The risks that affect the performance of the business
model (and the financial assets held within that business
model) and, in particular, the way those risks are managed

• How managers of the business are compensated (for
example, whether the compensation is based on the fair
value of the assets managed or on the contractual cash
flows collected)

• The expected frequency, value and timing of sales are also
important aspects of the Company's assessment.

The business model assessment is based on reasonably
expected scenarios without taking 'worst case' or 'stress case'
scenarios into account. If cash flows after initial recognition
are realised in a way that is different from the Company's
original expectations, the Company does not change the
classification of the remaining financial assets held in that
business model, but incorporates such information when
assessing newly originated or newly purchased financial
assets going forward.

The Solely Payments of Principal and Interest ('SPPI') test

As a second step of its classification process the Company
assesses the contractual terms of financial to identify whether
they meet the SppI test.

'Principal' for the purpose of this test is defined as the fair
value of the financial asset at initial recognition and may
change over the life of the financial asset (for example, if there
are repayments of principal or amortisation of the premium/
discount).

The most significant elements of interest within a lending
arrangement are typically the consideration for the time value
of money and credit risk. To make the SPPI assessment,
the Company applies judgement and considers relevant
factors such as the currency in which the financial asset is
denominated, and the period for which the interest rate is set.

a) Financial assets measured at amortized cost

Financial assets are measured at amortized cost if both the
following conditions are met:

• Contractual terms of the asset give rise to cash flows on
specified dates, that represent Solely Payments of Principal
and Interest on the principal amount outstanding ('SPPI'); and

• The asset is held within a business model whose objective
is to hold assets for collecting contractual cash flows.

Effective interest Rate (EiR) Method

After initial measurement, such financial assets are
subsequently measured at amortized cost using the effective
interest rate (EIR) method. Interest income is recognized
by applying the effective interest rate to the gross carrying
amount of financial assets other than in case of credit-
impaired financial assets where EIR is applied to the
amortised cost i.e. gross carrying amount of financial assets
less provision for impairment.

the EiR is computed:

a. As the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to
the gross carrying amount of a financial asset.

b. By considering all the contractual terms of the financial
instrument in estimating the cash flows

c. Including all fees received between parties to the contract
that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash
flow are recognisedin interest income with the corresponding
adjustment to the carrying amount of the assets.

b) Financial assets measured at fair value through other
comprehensive income (FvTOCI)

Debt instruments

Financial assets are measured at FvTOCI if both of the
following criteria are met:

• Contractual terms of the asset give rise to cash flows on
specified dates, that represent Solely Payments of Principal
and Interest on the principal amount outstanding ('SPPI'); and

• The asset is held within a business model whose objective
is to hold assets for collecting contractual cash flows as
well as selling the asset.

Financial assets 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). Upon disposal, the
cumulative gain or loss previously recognized in OCI is
reclassified from equity to the statement of profit and loss.

Equity Instruments

Investment in equity instruments that are neither held for
trading nor contingent consideration recognised by the
Company in a business combination to which Ind AS 103
'Business Combination' applies, are measured at fair value
through other comprehensive income, where an irrevocable
election has been made by management and when such
instruments meet the definition of Equity under Ind AS 32
Financial Instruments: Presentation. Such classification is
determined on an instrument-by-instrument basis.

Amounts presented in other comprehensive income are
not subsequently transferred to the statement of profit and
loss. Dividends on such investments are recognised in the
statement of profit and loss.

c) Financial assets measured at fair value through profit or loss
(FVTPL)

Any financial asset, which does not meet the criteria for
categorization as at amortized cost or as at FVTOCI is
classified as at FVTPL. Financial assets included within the
FVTPL category are measured at fair value and all changes
thereto and transaction costs are recognized in the statement
of profit and loss.

Financial instruments held for trading

A financial instrument is classified as held for trading if it is
acquired or incurred principally for selling or repurchasing
in the near term, or forms part of a portfolio of financial
instruments that are managed together and for which there is
evidence of short-term profit taking.

d) Equity investment in subsidiaries and Associates

Investment in subsidiaries and associates are carried at Cost
in the Separate Financial Statements as permitted under Ind
AS 27 and 28 respectively.

C. De-recognition of financial assets

De-recognition of financial assets due to substantial
modification of terms and conditions:

The Company derecognises a financial asset, such as a
loan to customer, when the terms and conditions have been
renegotiated to the extent that, substantially, it becomes a
new loan, with the difference recognised as a de-recognition
gain or loss, net of impairment loss, if any, already recorded.
The newly recognised loans are classified as Stage 1 for
ECL measurement purposes. Based on the change in cash
flows discounted at the original EIR, the Company records

are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Gains and losses
are recognized in profit or loss when the liabilities are de¬
recognised as well as through the EIR amortization process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and processing fees or
sourcing costs that are an integral part of the EIR. The EIR
amortization is included as finance costs in the statement of
profit and loss.

Trade and other payables:

These amounts represent liabilities for goods or services
provided to the Company which are unpaid at the end of the
reporting period. trade and other payables falling due within a
period of 12 months are presented at its carrying amounts as
it approximates fair value due to the short maturity of these
instruments. Other payables falling due after 12 months from
the end of the reporting period are measured and presented at
amortised cost unless designated as fair value through profit
and loss at the inception.

Financial liabilities measured 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. Gains or losses on liabilities held for trading or
designated as at FVTPL are recognized in the profit or loss.

C. De-recognition of financial liabilities:

A financial liability is de-recognised when the obligation under
the liability is discharged or cancelled or expired. 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 de-recognition of
the original liability and the recognition of a new liability. the
difference in the respective carrying amounts is recognized in
the statement of profit or loss.

3.1.3. Offsetting

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 recognized amounts and
there is an intention to settle on a net basis, to realize the assets
and settle the liabilities simultaneously.

3.2. property, plant and equipment

Property plant and equipment is stated at cost excluding the
costs of day-to-day servicing, less accumulated depreciation
and accumulated impairment in value. Changes in the expected
useful life are accounted for by changing the amortisation

period or methodology, as appropriate, and treated as changes
in accounting estimates.

Depreciation is calculated using the straight-line method to
write down the cost of property and equipment to their residual
values over their estimated useful lives. Land is not depreciated.

the residual values, useful lives and methods of depreciation
of property, plant and equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.

Property plant and equipment is de-recognised on disposal or
when no future economic benefits are expected from its use. 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 recognised in other income /
expense in the statement of profit and loss in the year the asset
is derecognised. The date of disposal of an item of property,
plant and equipment is the date the recipient obtains control of
that item in accordance with the requirements for determining
when a performance obligation is satisfied in Ind AS 115.

3.3. Intangible assets

The Company's other intangible assets mainly include the value
of computer software. An intangible asset is recognised only
when its cost can be measured reliably and it is probable that the
expected future economic benefits that are attributable to it will
flow to the Company. Intangible assets acquired separately are
measured on initial recognition at cost. Subsequently, they are
carried at cost less accumulated amortisation and impairment
losses if any, and are amortised over their estimated useful life
on the straight line basis over a 5 year period or the license
period whichever is lower.

The carrying amount of the assets is reviewed at each Balance
sheet date to ascertain impairment based on internal or external
factors. Impairment is recognised, if the carrying value exceeds
the higher of the net selling price of the assets and its value in use.

As per schedule II of companies act 2013, earlier useful life
determined as per board was 3 years for computer software
which includes software for distribution platform, Trade
mark & Rights and Software cost. During the financial year
2024 - 25, board revised the estimation of useful life in board
meeting held on 31st January 2024 by further 3 years and
revised total estimated useful life is 5 years and 3 months.

3.4. Cash and Cash equivalents

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 from the date of acquisition,
highly liquid instruments that are readily convertible into known
amounts of cash and which are subject to an insignificant risk
of changes in value.

3.5. Leases

Leases are recognized, measured and presented in accordance
with IND AS 116 "leases”.

The Company assesses whether a contract is or contains a lease,
at inception of a contract. The Company recognises a right-of-
use asset and a corresponding lease liability with respect to all
lease agreements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets. For these leases, the Company
recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Company uses its incremental
borrowing rate.

Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Company expects to exercise
a purchase option, the related right-of-use asset is depreciated
over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.

3.6. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there
is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is
required, the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an
asset's or cash-generating unit's (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined
for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets
or Group of assets. When the carrying amount of an asset or
CGU exceeds its recoverable amount, the asset is considered

impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are
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 asset. In determining fair
value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.

The company bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared separately
for each of the Company's CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally
cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash
flows after the fifth year. To estimate cash flow projections
beyond periods covered by the most recent budgets/forecasts,
the Company extrapolates cash flow projections in the budget
using a steady or declining growth rate for subsequent years,
unless an increasing rate can be justified. In any case, this
growth rate does not exceed the long-term average growth rate
for the products, industries, or country or countries in which the
entity operates, or for the market in which the asset is used.

Impairment losses of continuing operations, are recognised in
the statement of profit and loss.

For assets excluding goodwill, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Company estimates the
asset's or CGU's recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change
in the assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the statement of profit or
loss unless the asset is carried at a revalued amount, in which
case, the reversal is treated as a revaluation increase.

3.7. Revenue Recognition

Revenue (other than for those items to which Ind AS 109
Financial Instruments are applicable) is measured at fair value
of the consideration received or receivable.

Income from other non-financing activity is recognised as per
the terms of the respective contract on accrual basis provided
that it is probable that the economic benefits will flow to the

company and the amount of income can be measured reliably.

Dividend income from investments is recognised when the
shareholder's right to receive payment has been established.

3.8. Employee benefits

Short term employee benefit Plans

All short term employee benefit plans such as salaries, wages,
bonus, special awards and medical benefits, which fall due
within 12 months of the period in which the employee renders
the related service, which entitles him to avail such benefits
are recognised on an undiscounted basis, and charged to the
statement of profit and loss.

Defined Contribution Plans

Contribution to provident funds are made monthly at a
predetermined rate to the regional provident fund commissioner
and debited to the statement of profit and loss.

Defined Benefit Plans

provision is made for gratuity based on actuarial valuation,
carried out by an independent actuary as at the balance sheet
date using the projected unit credit method. Re-measurement,
comprising actuarial gains and losses, the effect of the changes
to the asset ceiling (if applicable) and the return on plan assets
(excluding interest), is reflected immediately in the statement
of financial position with a charge or credit recognised in other
comprehensive income in the period in which they occur.

3.9. Taxes
Current tax

Current tax is provided using the tax rates and laws that have
been enacted or substantively enacted by the reporting date and
includes any adjustment to tax payable in respect of previous
years. Current tax is generally recognized in the statement of
profit and loss.

Deferred Tax

Deferred tax is recognised on temporary differences between
the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally
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. Deferred
tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary
differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the
end of each reporting date 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. Unrecognised
deferred tax assets are re-assessed at each reporting date and
are recognized 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 each reporting
date at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based on tax
rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

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.

Current and deferred tax are recognised in the statement of
profit and loss, except when they are related to items that are
recognised in other comprehensive income or directly in equity,
in which case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity respectively.