i. Provisions and contingencies
Provisions

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation.

When the Company expects some or all of a
provision to be reimbursed, the reimbursement
is recognised as a separate asset, but only
when the reimbursement is virtually certain.
The expense relating to a provision is presented
in the statement of profit and loss net of
any reimbursement.

If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage
of time is recognised as a finance cost.

Contingencies

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond
the control of the Company or a present obligation
that is not recognized because it is not probable
that an outflow of resources will be required to
settle the obligation. A contingent liability also
arises in extremely rare cases where there is a
liability that cannot be recognized because it
cannot be measured reliably. The Company does
not recognize a contingent liability but discloses
its existence in the financial statements.

j. Retirement and other employee benefits

For defined benefit plans (gratuity and long term
incentive plan), the liability or asset recognised
in the balance sheet is the present value of
the defined benefit obligation at the end of the
reporting period less the fair value of plan assets.
The defined benefit obligation is calculated by
an 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 by reference to market yields at
the end of the reporting period on government
bonds that have terms approximating to the
terms of the related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan
assets. This cost is included in employee benefit
expense in the statement of profit and loss.

Re-measurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur, directly in OCI. They are
included in retained earnings in the statement
of changes in equity and in the balance sheet.

Re-measurements are not reclassified to profit
or loss in the subsequent periods.

Changes in the present value of the defined
benefit obligation resulting from plan

amendments or curtailments are recognised
immediately in profit or loss as past service cost.

The Company's contributions to defined

contribution plans (provident fund) are recognized
in profit or loss when the employee renders related
service. The Company has no further obligations
under these plans beyond its periodic contributions.

The Company provides for liability at period
end on account of un-availed earned leave and
Long Term Incentive Plan ('LTIP') as per actuarial
valuation using projected unit credit method.

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognised in respect of employees'
services up to the end of the reporting period and
are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are
presented as employee benefit payable under
other financial liabilities in the balance sheet.

The Code on Social Security, 2020 ('Code')
relating to employee benefits during employment
and post-employment benefits received
Presidential assent in September 2020. The
Code has been published in the Gazette of
India. Certain sections of the code came into
effect on May 3, 2023. However, the final rules/
interpretation have not yet been issued. Based
on a preliminary assessment, the entity believes
the impact of the change will not be significant.

k. Share-based payments
Equity-settled transactions

Employees (including senior executives) of the
Company receive remuneration in the form of
share-based payments, 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 Employee Stock
Option Plan (ESOP) 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.

Performance conditions which are market
conditions are taken into account when determining
the grant date fair value of the awards. Service and
non-market performance conditions are not taken
into account when determining the grant date fair
value of awards, but the likelihood of the conditions
being met is assessed as part of the Company's
best estimate of the number of equity instruments
that will ultimately vest.

No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms 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.

l. 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.

Financial assets

Initial recognition and measurement

All financial assets 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 asset. However,
trade receivables that do not contain a
significant financing component are measured at
transaction price.

Subsequent measurement

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

• Debt instruments at amortized cost

• Debt instruments at fair value through other
comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity
instruments at fair value through profit
or loss (FVTPL)

• Equity instruments measured at fair value
through other comprehensive income
(FVTOCI)

Debt instruments at amortised cost

A 'debt instrument' is measured at the amortised
cost if both the following conditions are met:

a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) 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 amortization is included in finance
income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss.
This category generally applies to trade and other
receivables and is most relevant to the Company.

Debt instrument at FVTOCI

A 'debt instrument' is classified as at the FVTOCI
if both of the following criteria are met:

a) The objective of the business model is
achieved both by collecting contractual cash
flows and selling the financial assets, and

b) 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 OCI. However, the Company
recognizes interest income, impairment losses
and reversals and foreign exchange gain or
loss 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 the statement of profit and
loss. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using
the EIR method.

Debt instrument at 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 FVTOCI criteria, as at FVTPL.
However, such election is allowed only if doing
so reduces or eliminates a measurement or
recognition inconsistency (referred to as
'accounting mismatch').

Debt instruments included within the FVTPL
category are measured at fair value with all changes
recognized in the statement of profit and loss.

Equity investments

All equity investments in scope of Ind AS 109
'Financial Instruments' are measured at fair
value. The Company may make an irrevocable
election to present in OCI subsequent changes
in the fair value. The Company makes such
election on an instrument-by-instrument basis.
The classification is made on initial recognition
and is irrevocable.

If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognized in the OCI. There is no recycling
of the amounts from OCI to statement of profit
or loss, even on sale of investment. However, the
Company may transfer the cumulative gain or
loss within equity.

Equity instruments included within the FVTPL
category are measured at fair value with
all changes recognized in the statement of
profit and loss.

The equity securities which are not held for
trading, and for which the Company has made
an irrevocable election at initial recognition to
recognize changes in fair value through OCI
rather than profit or loss as these are strategic
investments and the Company considered this to
be more relevant.

Equity investments in subsidiaries, associates
and joint ventures are measured at cost. The
investments are reviewed at each reporting date
to determine whether there is any indication of
impairment considering the provisions of Ind AS
36 'Impairment of Assets'. If any such indication
exists, policy for impairment of non-financial
assets is followed.

Derecognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed
from the Company's balance sheet) when:

• The rights to receive cash flows from the
asset have expired, or

• 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.

Impairment of financial assets

In accordance with Ind AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment loss
on financial assets that are debt instruments,
and are measured at amortised cost e.g., loans,
debt securities, deposits, trade receivables
and bank balance.

The Company follows 'simplified approach' for
recognition of impairment loss allowance on
trade receivables. The application of simplified
approach does not require the Company to
track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime
ECLs at each reporting date, right from its
initial recognition.

For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month expected credit loss
(ECL) is used to provide for impairment loss.
However, if credit risk has increased significantly,
lifetime ECL is used. If, in a subsequent period,
credit quality of the instrument improves such
that there is no longer a significant increase in
credit risk since initial recognition, then the entity
reverts to recognising impairment loss allowance
based on 12-month ECL.

Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument. The

12-month ECL is a portion of the lifetime ECL which
results from default events that are possible within
12 months after the reporting date.

ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the cash
flows that the entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR.

The Company uses a provision matrix to
determine impairment loss allowance on portfolio
of its trade receivables. The provision matrix is
based on its historically observed default rates
over the expected life of the trade receivables
and is adjusted for forward-looking estimates.
At every reporting date, the historical observed
default rates are updated and changes in the
forward-looking estimates are analyzed.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the statement of profit and
loss. This amount is reflected under the head other
expenses in the statement of profit and loss. For
the financial assets measured as at amortised
cost, ECL is presented as an allowance, i.e., as an
integral part of the measurement of those assets in
the balance sheet. The allowance reduces the net
carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment
allowance from the gross carrying amount.

Financial Guarantee Contracts

The Company acts as Lending Service Provider and
in certain arrangements with the lender, it issues
Default Loss Guarantee (DLG) as per the Digital
Lending Guidelines issued by Reserve Bank of India
referred in the financial statements as "financial
guarantees". Financial Guarantees which are initially
recognised in the financial statements (within
Other Financial Liabilities) at fair value (premium).
Subsequent to initial recognition, the Company's
liability under each financial guarantee is measured
at the higher of the amount initially recognised less
cumulative amortisation, and the ECL.

Financial Guarantee Premium

The financial guarantee premium received is
recognised in the Standalone Statement of
Profit and Loss account under Sale of Service
on a weighted average basis over the estimated
tenure of the guarantee.

ECL methodology

The Company calculates the ECL as a product
of the Exposure at Default, Probability of
Default and Loss Given Default, capped at the
contractually agreed guarantee rate, where
Probability of Default is estimated as a likelihood
of default over the tenure of the loans, Loss
Given Default is an estimate of loss net of
any recoveries and Exposure at Default is the
amount of disbursement made under financial
guarantee contracts.

Financial liabilities

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, or as derivatives designated as hedging
instruments in an effective hedge, 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
borrowings, lease liabilities, trade and other
payables.

Subsequent measurement

The measurement of financial liabilities depends
on their classification as described below:

Loans and borrowings

After initial recognition, interest-bearing loans
and 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.

Derecognition

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 or loss.

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.

m. Cash and cash equivalents

Cash and cash equivalent in the standalone
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 standalone 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.

n. Leases

The Company as a lessee

The Company's lease asset classes primarily
consist of leases for land and office premises. 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 contact
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.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU")

sheet and lease payments have been classified
as financing cash flows.

o. Earnings/ (loss) per share (EPS)

Basic EPS amounts are calculated by dividing the
profit/ (loss) for the year attributable to equity
holders by the weighted average number of
Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing
the profit/ (loss) attributable to equity holders 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.

p. Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision-maker. The Chief Operating
decision-maker is responsible for allocating
resources and assessing performance of the
operating segments and makes strategic decisions.

q. Use of estimates

The Company is required to make estimates and
assumptions that affect the reported amounts
of assets, liabilities, disclosure of contingent
liabilities at the date of the financial statements
and the reported amounts of revenue and
expenses during the reporting period. Actual
results could differ from those estimates. The
Company bases its estimates on historical
experience and on various other assumptions
that are believed to be reasonable, the results
of which form the basis for making judgements
about carrying values of assets and liabilities.

r. Exceptional Items

On certain occasions, the size, type or incidence
of an item of income or expense, pertaining to the
ordinary activities of the Company is such that
its disclosure improves the understanding of the
performance of the Company. Such income or
expense is classified as an exceptional item and
accordingly disclosed in the financial statements.
Significant impact on the financial statements
arising from impairment and non-recurring events
are considered and reported as exceptional items.