Excelsoft Technologies Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

5. THE MATERIAL ACCOUNTING
POLICIES ARE SET OUT BELOW

a Revenue recognition

The Company derives revenues primarily from IT
services comprising software development and
related services, licensing of software products and
platforms across the Company''s core and digital
offerings (together called as "software-related
services"). Contracts with customers are either on a
time-and-material, fixed-price or on a license basis.

Revenues from customer contracts are considered for
recognition and measurement when the contract has
been approved in writing, by the parties, to the contract,
the parties to contract are committed to perform their

respective obligations under the contract, and the
contract is legally enforceable. Revenue is recognized
upon transfer of control of promised products or
services ("performance obligations") to customers in
an amount that reflects the consideration the Company
has received or expects to receive in exchange for these
products or services ("transaction price"). When there
is uncertainty as to collectability, revenue recognition
is postponed until such uncertainty is resolved.

The Company assesses the services promised in a
contract and identifies distinct performance obligations
in the contract. The Company allocates the transaction
price to each distinct performance obligation based on
the relative standalone selling price. The price that is
regularly charged for an item when sold separately is
the best evidence of its standalone selling price. In the
absence of such evidence, the primary method used to
estimate standalone selling price is the expected cost
plus a margin, under which the Company estimates the
cost of satisfying the performance obligation and then
adds an appropriate margin based on similar services.

The Company''s contracts may include variable
consideration including rebates, volume discounts
and penalties. The Company includes variable
consideration as part of transaction price when there
is a basis to reasonably estimate the amount of the
variable consideration and when it is probable that a
significant reversal of cumulative revenue recognized
will not occur when the uncertainty associated with the
variable consideration is resolved.

Revenue on time-and-material are recognized as
the related services are performed. Fixed-price
maintenance revenue is recognized rateably either
on a straight-line basis when services are performed
through an indefinite number of repetitive acts over
a specified period or rateably using a percentage of
completion method when the pattern of benefits from
the services rendered to the customer and Company''s
costs to fulfil the contract is not even through the
period of contract because the services are generally
discrete in nature and not repetitive. Revenue from
other fixed-price where the performance obligations
are satisfied over time is recognized using the
percentage-of-completion method. Efforts or costs
expended are used to determine progress towards
completion as there is a direct relationship between
input and productivity. Progress towards completion
is measured as the ratio of costs or efforts incurred to
date (representing work performed) to the estimated
total costs or efforts. Estimates of transaction price
and total costs or efforts are continuously monitored
over the term of the contracts and are recognized in
net profit in the period when these estimates change

or when the estimates are revised. Revenues and the
estimated total costs or efforts are subject to revision
as the contract progresses. Provisions for estimated
losses, if any, on incomplete contracts are recorded
in the period in which such losses become probable
based on the estimated efforts or costs to complete
the contract.

The billing schedules agreed with customers include
periodic performance-based billing and/or milestone
based progress billings. Revenues in excess of billing
are classified as unbilled revenue while billing in excess
of revenues are classified as contract liabilities (which
we refer to as "unearned revenues").

Revenue from licenses where the customer obtains
a "right to use" the licenses is recognized at the time
the license is made available to the customer. Revenue
from licenses where the customer obtains a "right to
access" is recognized over the access period.

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.

A contract modification is a change in the scope
or price or both of a contract that is approved by
the parties to the contract. A contract modification
that results in the addition of distinct performance
obligations are accounted for either as a separate
contract if the additional services are priced at the
standalone selling price or as a termination of the
existing contract and creation of a new contract if they
are not priced at the standalone selling price. If the
modification does not result in a distinct performance
obligation, it is accounted for as part of the existing
contract on a cumulative catch-up basis.

The incremental costs of obtaining a contract (i.e.,
costs that would not have been incurred if the contract
had not been obtained) are recognised as an asset if
the Company expects to recover them.

Capitalized contract costs relating to upfront
payments to customers are amortized to revenue and
other capitalized costs are amortized to expenses
over the respective contract life on a systematic basis
consistent with the transfer of goods or services to
customer to which the asset relates. Capitalized costs
are monitored regularly for impairment. Impairment
losses are recorded when present value of projected
remaining operating cash flows is not sufficient to
recover the carrying amount of the capitalized costs.

The Company presents revenues net of indirect taxes
in its statement of profit and loss.

b Income taxes

Income tax expense comprises current tax and the
net change in the deferred tax asset or liability during
the year.

(i) Current tax

The tax currently payable is based on 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.
Advance taxes and provisions for current income
taxes are presented at net in the balance sheet
after off-setting advance tax paid and income
tax provision.

(ii) 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. 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. Such deferred tax assets and liabilities
are not recognised if the temporary difference
arises from the initial recognition of assets and
liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognised
if the temporary difference arises from the initial
recognition of goodwill. Deferred tax assets and
liabilities are offset when they relate to income
taxes levied by the same taxation authority and
the relevant entity intends to settle its current tax
assets and liabilities on a net basis. 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

realised, based on 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.

Temporary differences arising as a result of
changes in tax legislation. Accordingly, when
additional temporary differences arise as a result
of the introduction of a new tax, and not when an
asset or a liability is first recognised, the deferred
tax effect of the additional temporary differences
should be recognised.

(iii) Current and deferred tax for the year

Current and deferred tax are recognised in the
statement of profit and loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for
a business combination, the tax effect is included
in the accounting for the business combination.

c Property, plant and equipment

Property, plant and equipment represent a significant
proportion of the asset base of the Company. The
charge in respect of periodic depreciation is derived
after determining an estimate of an asset''s expected
useful life and the expected residual value at the end of
its life. The useful lives and residual values of Company''s
assets are determined by the management at the
time the asset is acquired and reviewed periodically,
including at each financial year end. The lives are based
on historical experience with similar assets as well as
anticipation of future events, which may impact their life,
such as changes in technology. Refer note 7.

Property, plant and equipment are stated at cost,
less accumulated depreciation and impairment, if
any. Costs directly attributable to acquisition are
capitalized until the property, plant and equipment are
ready for use, as intended by the Management. The
charge in respect of periodic depreciation is derived at
after determining an estimate of an asset''s expected
useful life and the expected residual value at the end of
its life. The Company depreciates property, plant and
equipment over their estimated useful lives using the
straight-line method.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sales proceeds and the carrying amount
of the asset and is recognised in the statement of
profit and loss.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets not
ready to use before such date are disclosed under
''Capital work-in-progress''. Subsequent expenditures
relating to property, plant and equipment is capitalized
only when it is probable that future economic benefits
associated with these will flow to the Company and
the cost of the item can be measured reliably. The cost
and related accumulated depreciation are eliminated
from the financial statements upon sale or retirement
of the asset.

d Other intangible assets

Intangible assets are stated at cost less accumulated
amortization and impairment. Intangible assets are
amortized over their respective individual estimated
useful lives on a straight-line basis, from the date that
they are available for use. 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), and the level of maintenance
expenditures required to obtain the expected future
cash flows from the asset. Amortization methods and
useful lives are reviewed periodically including at each
financial year end.

Research costs are expensed as incurred. Software
product development costs are expensed as incurred
unless technical and commercial feasibility of the
project is demonstrated, future economic benefits are
probable, the Company has an intention and ability to
complete and use or sell the software and the costs
can be measured reliably. The costs which can be

capitalized include the cost of material, direct labour,
overhead costs that are directly attributable to prepare
the asset for its intended use.

The estimated useful lives of assets are as follows:

Impairment of tangible and intangible assets
The carrying values of property plant and equipment
and intangible assets with finite life are reviewed for
possible impairment whenever events, circumstances
or operating results indicate that the carrying amount
of an asset may not be recoverable. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any). Recoverable amount is the
higher of fair value less costs of disposal and value
in use. 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 for which the estimates of future
cash flows have not been adjusted. If the recoverable
amount of an asset (or cash generating unit) is
estimated to be less than its carrying amount, the
carrying amount of the asset (or cash generating unit)
is reduced to its recoverable amount. An impairment
loss is recognised immediately in the statement of
profit and loss. If at the reporting date, there is an
indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed
and the impairment losses previously recognised
are reversed such that the asset is recognised at
its recoverable amount but not exceeding written
down value which would have been reported if the
impairment losses had not been recognised initially.

e Leases

The Company''s lease asset classes primarily consist
of leases for land and buildings. 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 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. As a
lessee, the Company determines the lease term as
the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use
of such option is reasonably certain. The Company
makes an assessment on the expected lease term on
a lease-by-lease basis and thereby assesses whether
it is reasonably certain that any options to extend or
terminate the contract will be exercised. In evaluating
the lease term, the Company considers factors such
as any significant leasehold improvements undertaken
over the lease term, costs relating to the termination of
the lease and the importance of the underlying asset
to the Company''s operations taking into account the
location of the underlying asset and the availability of
suitable alternatives. The lease term in future periods
is reassessed to ensure that the lease term reflects the
current economic circumstances.

The ROU 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.

The ROU 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. The ROU 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 Generating Unit (CGU) to
which the asset belongs.

The lease liability is initially measured at amortized
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates in the country
of domicile of these leases. Lease liabilities are
remeasured with a corresponding adjustment to the
related right of use asset if the Company changes its
assessment if whether it will exercise an extension or
a termination option.

f Employee benefits

(i) Retirement benefit costs and
termination benefits

Payments to defined contribution retirement
benefit plans are recognised as an expense when
employees have rendered service entitling them
to the contributions.

For defined benefit retirement benefit plans, the
cost of providing benefits is determined using
the projected unit credit method, with actuarial
valuations being carried out at the end of each
annual reporting period. Remeasurement,
comprising actuarial gains and losses and the return
on plan assets (excluding net interest), is reflected
immediately in the balance sheet with a charge or
credit recognised in other comprehensive income
in the period in which they occur. Remeasurement
recognised in other comprehensive income is not
reclassified to statement of profit and loss. Past
service cost is recognised in the statement of profit
and loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate
at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are
categorised as follows:

- service cost (including current service cost,
past service cost, as well as gains and losses
on curtailments and settlements);

- net interest expense or income; and-
Remeasurement.

The Company presents the first two components
of defined benefit costs in statement of profit and
loss in the line item ''Employee benefits expenses''.

The retirement benefit obligation recognised in
the balance sheet represents the actual deficit
or surplus in the Company''s defined benefit
plans. Any surplus resulting from this calculation
is limited to the present value of any economic
benefits available in the form of refunds from
the plans or reductions in future contributions to
the plans.

(ii) Short term and other long term
employee benefits

Leave encashment

The employees of the Company are entitled to
encash the unutilised leave. The employees
can carry forward a portion of the unutilised
accumulating leave and utilise it in future
periods or receive cash as per the Companies
policy upon accumulation of minimum number
of days. The Company records an obligation

for leave encashment in the period in which the
employee renders the services that increases
this entitlement. The Company measures the
expected cost of leave encashment as the
additional amount that the Company expects
to pay as a result of the unused entitlement that
has accumulated at the end of the reporting
period. The Company recognises accumulated
leave entitlements based on actuarial valuation
using the projected unit credit method. Non¬
accumulating leave balances are recognised in
the period in which the leaves occur.

Other short term employee benefits
Liabilities recognised in respect of short-term
employee benefits are measured at the undiscounted
amount of the benefits expected to be paid in exchange
for the related service.

4. Significant accounting policies
i. Revenue recognition

The Company derives revenues primarily from (T services comprising licensing of learning
and assessment software products and platforms, software development and related
services and maintenance, licensing the educational¹ learning material copy rights and
content services. Contracts with customers are either on a tirne-and-material, unlt-of-
work, fixed-price or on a fixed-timeframe basis.

Revenue Is recognized upon transfer of control of promised products or services
{''’performance obligations") to customers in an amount that reflects the consideration the
Company has received or expects to receive in exchange for these products or services
(''’transaction price’''). When there Is uncertainty as to collectability, revenue recognition is
postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a "right to use" the licenses is
recognized at the time the license is made available Lo the customer. Revenue from
licenses where the customer obtains a "right to access" is recognized over the access
period.

Revenue un time-ancl-material and unft^jof-work-based contracts, are recognized on
output basis measured by units delivered, efforts expended, number oT transactions
processed etc.

Revenue related to fixed-price maintenance and support revenue is recognized rateably
on a straight-line basis when services are performed through an indefinite number of
repetitive acts over a specified period or the Company is standing ready to provide the
services.

Revenue from other fixed-price, fixed-timeframe contracts, where the performance
obligations are satisfied over time is recognized using the percentage-of-completioii
method or accounting wrth contract cost incurred determining the degree of completion of
the performance obligation. Efforts or costs expended are used to determine progress
towards completion as there is a direct relationship between input and productivity.
Progress towards completion is measured as the ratio of costs or efforts incurred to date
(representing work performed) to the estimated total costs or efforts

Revenue is measured based on the transaction price, which is the consideration, adjusted
for volume discounts, service level credits, price concession and incentives, 0 any, as

specified in the contract with the customer. The Company assesses the services promised
fn a contract and identifies distinct performance obligations in the contract and allocates
the transaction price to each distinct performance obligation based on the relative
standalone selling price.

The billing schedules agreed with customers include periodic performance-based billing
and / or milestone-based progress billings. Revenues In excess of billing are classified as
unbilled revenue while billing in excess of revenues are classified as contract liabilities
(which we refer to as unearned revenues),

In accordance with Tnd-AS 37, the Company recognise an onerous contract provision when
the unavoidable costs of meeting the obligations under a contract exceed the economic
benefits to be received.

The incremental costs of obtaining a contract {i.e,, costs that would not have been incurred
if the contracL had not been obtained) are recognized as an asset if the Company expects
to recover them. Any capitalized contract costs are amortized, with the expense recognized
as the Company transfers the related goods or services to the customer. The Company
prosents revenues net of indirect taxes irr its Consolidated Statement of Profit and Loss.

The Company disaggregates revenue from contracts with customers by geography and
business verticals.

EL Property, plant and equipment

Property, plant and equipment are measured at cost of acquisition or construction less
accumulated depreciation and impairment losses, if any. the cast of an Item of property,
plant and equipment comprises Its purchase price, including import duties and other non¬
refundable taxes or levies and any directly attributable cost of bringing the asset to its
working condition for its intended use and any trade discounts and rebaLes are deducted
in arriving at the purchase price. IT significant parts of an item of property, plant and
equipment have different useful lives, Lhen Lhey are accounted for as separate items
(major components) of property, plant and equipment-

Capital work-in-progress are measured at cost less accumulated impairment losses, iT any.

Depredation on property, plant and equipment is provided on pro-rota basis using the
Straight-Line method based on the useful life specified in the Schedule J i to the Companies
Act, 2013,

Subsequent expenditure related to Property, plant and equipment is capitalized only when
It is probable that future economic benefits associated with these will flow to the Company
and the cost of Item can be measured reliably. Other repairs and maintenance costs are
recognized Tn the Statement cif Profit & Loss while incurred.

The Company doesn''t have any Berrami Property under the Benami Transactions
(Prohibition Act), 19&S.

iii. Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment.
Intangible assets are amortized over their respective individual estimated useful lives on
a straight-line basis, from the date thaL they are available for use, The estimated useful
life of an identifiable intangible asset is based on a number of factors including the effects
of obsolescence, demand, compeLiLion_r and other economic factors (such as the stability
of the industry and known technological advances).. Amortization methods and useful lives
arc reviewed periodically including at each financial year end.

Jn ¹'' ‘ i

The estimated useful life of amortizable intangibles is reviewed and where appropriate are
adjusted, annually. The estimated useful lives of the amortizable intangible assets for the
current and comparative periods are considered as (Customer-related software products)
10 years. (Comparative periods 10 years)

Research costs are expensed as incurred Software product development costs are
expensed as incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the Company has an Intention and
ability to complete and use or sell the software, and the costs can be measured reliably.
The costs which can be capitalized include the cost of material, direct labour and overhead
costs that are directly attributable to preparing the asset for its intended use.

Intangible 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 (l.e. Lhe 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 pf those from other
assets. In such cases, the recoverable amount is determined for the 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 Lhe
carrying value of the assets exceeds the estimated recoverable amount of the asset,

iv. Impairment

a} Financial assets

The Company applies the expected credit loss model for recognising impairment loss on
financial assets measured al amortized cost, Lrade receivables, unbilled receivables,
contract assets and other financial assets, Expected credit loss is the difference between
the contractual cash flows and the cash flows that the entity expects to receive, discounted
using the effective interest rate.

Loss allowances for trade receivables, unbilled receivables and contract assets are
measured at an amount equal to lifetime expected credit loss, Lifetime expected credit
losses are the expected credit losses that result from all possible default events over the
expected life of a financial instrument. Lifetime expected credit loss is computed based on
a provision matrix which takes in to account risk profiling or customers and historical crudil
loss experience adjusted for forward looking Information.

b) Non-financial assets

The Company assesses long lived assets such as property, plant and equipment, right-of-
use assets and intangible assets for impairment whenever events or changes in
circumstances indicate LhaL the carrying amount of an asset or group of assets may not
be recoverable. If any such Indication exists, the Company astimates the recoverable
amount of Lhe asstit or group of assets,

lhe recoverable amount of an asset or cash generating unit is the higher of its fair value
less cost of disposal (FVLCD) and its value-in-use {VIU}. The VIU of long-lived assets is
calculated using projected future cash flows. FVLCD of a cash generating unit is computed
using turnover and earnings multiples, if the recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset belongs is less than lts^J
carrying amount, the carrying amount is reduced to its recoverable amount. The reduction
in treated ns an impairment loss and is recognized in the consolidated statement of profit
and loss. If at the reporting daLe, there, is an indication that a previously assessed

•A

impairment loss no longer exists, the recoverable amount Is reassessed and the
impairment losses previously recognized are reversed such that the asset Is recognized at
its recoverable amount but not exceeding written down value which would have been
repotted if the impairment looses had not been recognized initially. An impairment in
respect of goodwill is not reversed.

v. teases

The Company evaluates each contract or arrangement whether it gualifies as lease as
defined under Ind AS 116.

The Company recognises the right-of*Use assets and lease liability at the commencement
dote of the [ease. The right of use asset is initially measured at cost, which comprises of
present value of future lease rent payments adjusLed for any payments made at or before
commencement date, any initial direct cosL incurred and estimate of cost to dismantle or
remove an underlying asset or to restore an asset less any lease incentives received I he
lease liability is initially measured at present value of lease payments that is not paid at
commencement date discounted at implicit rate mentioned in lease or incremental
borrowing rate. The generally uses incremental borrowing rate as discount rate. The nghL
of use asset is depreciated using the straight-line method from the commencement date
of the lease over useful life of right to use asset.

Subsequently, the right-of-use assets Is measured at cost less any accumulated
depreciation and accumulated Impairment losses, if any. The estimated useful lives of
right-of-use assets are determined on the same basis as those of properly, plant and
equipment.

The Company applies Ind AS 36 to determine whether a RoU asset is impaired and
accounts for any identified impairment loss as described in the impairment or non-flnanciaf
assets below.

After the commencement date, Lhe amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made.

The Company recognizes the amount of the re-measurement of lease liability as an
adjustment to the right-of-use assets. Where thd carrying Amount of the righL-of-usc asset
is reduced to zero and there is a further reduction in the measurement pf the lease liability,
rhe Company recognizes any remaining amount of the re-measurement in statement of
profit and loss.

Lease liability payments are classified as cash used in financing activities in the statement
of cash flows.

The Company as a lessor

Leases under which the Company is a lessor are classified as a finance or opeiating lease.
Lease, confracts where all the risks and rewards are substantially transferred to Lite lessee,
are classified as a finance lease. All other leases are classified as. operating lease.

For leases under which the Company is an intermediate lessor, the Company accounts for
the head-lease and the sub-lease as two separate contracts The sun-lease is further
classified either as a finance lease or an operating lease by reference to the RoU asset
arising from the head-lease,

vli Earnings per share

Basic Earnings per share is computed using the weighted average number of equity shares
outstanding during the period adjusted for treasury shares held. Diluted earnings per share
is computed using the weighted-average number of equity and dilutive equivalent shares
outstanding during the period, using the treasury stock method for options, except where
the results would be anti-dllutlve,

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 statements by the Board of
Directors.

vri. Functional and presentation currency

These standalone financial statements are presented In Indian rupees, which is Lhe
functional currency of the Company,

viii. Foreign currency transactions and translation

a. Transactions and balances

Transactions in foreign currency are translated into the functional currencies using lhe
exchange rates prevailing at the date of the transaction Foreign exchange gams and
losses resulting from the settlement of such transactions and from translation at the
exchange rates prevailing at the reporting date of monetary assets and liabilities
denominated in foreign currencies are recognized in the statement of profit and loss and
reported within foreign exchange gains/flosses), net, within results of operating activities.
Galns/flosses), net, relating to translation or settlement of borrowings denominated in
foreign currency are reported within finance costs. Non-monetary assets and liabilities
denominated in foreign currency and measured at historical cost are translated at "he
exchange rate prevalent at the date of transaction,

b. Foreign operations

For Lhe purpose of presenting financial statements, the assets and liabilities of the
Company''s foreign operations that have a functional currency other than Indian rupees
are translated into Indian rupees using exchange rates prevailing at the reporting date,
income and expense items are translated at the average exchange rates for Lhe period.
Exchange differences arising, if any, are recognized in other comprehensive income and
held in foreign currency translation reserve {FCTR), a component of equity When a foreign
operation is disposed of, the relevant amount recognized in FCTR. is transferred to the
statement of profit and loss as part of the profit or loss on disposal.

(x. Financial assets and liabilities

A.)Initial Recognition

Financial assets and [labilities are recognised when the Company becomes a party to the
contractual provisions of Lhe instrument. Financial 3SseLs and liabilities are Initially
measured at fair value. Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities [other than financial assets end financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial asset or financial liability,

B) Subsequent measurement

i) Financial assets carried at amortised cost

A Financial asset is subsequently measured at amortised cost IF it held within a business
model whose objectives is to hold the asset in order to collect contractual cash Flows and
the contractual terms of Lhe Financial asset give rise on specified dates cash Flows that are
solely payment of principals ana interest on the principal amount outstanding

ii) financial assets at Fair value through other comprehensive income

A financial asset is subsequently measured at fair value Lhrough other comprehensive
income if It is held within a business model whose objective Is achieved by both contractual
cash flows and selling financial asset and the contractual terms of the financial asset give
rise on specified dates cash flows that are solely payment of principals and interest on rhe
principal amount outstanding.

til) Financial assets at fair value through profit or loss

A Financial asset which Is not classified in any of the abova categoric are subsequently
fair valued through profit or loss,

However, in cases where the company has made an irrevocable election For particular
Investment In equity instrument that would otherwise be pleasured at fair value through
profiL or loss, the subsequent changes in fair value are measured In other comprehensive
income.

C) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest
method, except for contingent consideration recognised in business combination which Is
subsequently measured at fair value through profit or loss. For trade and other payables
maturing within one year from Lhe balance sheet date, the carrying amounts approximate
fair value due to the short maturity or these instruments,

D) Investment in subsidiaries

Investment in subsidiaries are measured at cost less impairment loss, If any.

E) Derecognition of financial assets and liabilities

The Company derecognises a Financial asset when the contractual rights to the cash Flow
from the financial asset expires or IL transfers the financial asset and the transfer qualifies
for derecognition under Ind-AS 109. A financial liability {or a part of financial liability} is
derecognised when the obligation specified in Lhe contract Is discharged or cancelled or
expires

F) Cash and cash equivalents

The Company''s cash and cash equivalents consist or cash on hand and lr) banks and
demand deposits with banks, which can be withdrawn at any fime, without prior notice or
penalty on the principal.

For Lhe purposes of Lhe cash flow statement, cash and cash equivalents include cash on
hand, in banks and demand deposiLs with banks are considered part of the Company''s
cash management system. In the balance sheet, bank overdrafts are presented under
borrowings within current liabilities.

. jj _ ''

e)Other financial assets

OLher financial assets are non-derivative financial asset? with fixed or determinable
payments that are not quoted in an active market. They are presented as current assets,
except for those maturing later than 12 monLhs after the reporting date which are
presented as non-current assets. These are initially recognized at fair value and
subsequently measured at amortized cost using the effective interest method, iess any
impairment losses. These comprise trade receivables, unbilled receivables, employee and
other advances and eligible current and non-current assets.

H)Trade payables and other payables

Trade payables and other payables are initially recognized at fair value, arid subsequently
carried at amortized cost using the effective interest method. For these Financial
instruments, the carrying amounts approximate fair value due to the short-term maturity
of these instruments.

x. Employee benefits

a. Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are

classified as short-term employee benefits. Benefits such as salaries and wages are
recognised in the period in which the employee renders the related service. A liability is
recognised for the amount expected to be paid when Lhere is a present legal or constructive
obligation tD pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably,

b. Provident fund

Eligible employees of the company receive benefits from a provident fund, which is 3
defined benefit plan. Both the eligible employee and the Company make monthly
contributions to the provident fund plan equal to a specified percentage of the covered
employee''s salary. The monthly contributions are made to the government administered
provident and pension fund. The rate at which the annual interest is payable to the
beneficiaries is being administered by the government and the same is paid by the
provident and pension fund,

c. Gratuity

The Company provides for gratuity, a defined benefit retirement plan ["the Gratuity Plan")
covering eligible employees of the company. The Gratuity Plan provides a lump-sum
payment to vested employees at retirement, death, incapacitation or termination of
employment, of an amount based on the respective employee''s salary and the tenure of
employment with the company.

Liabilities With regard ta Lhe Gratuity Plan are determined by actuarial valuation,
performed by an independent actuary, at each balance Sheet date using the projected
unit credit method. i he company recognizes the net obligation of a defined benefit plan in
its Balance Sheet as an asset or liability. Gains and losses through remeasurements of the
net defined benefit liability are recognized in other comprehensive income and are not
reclassified to profit or loss in subsequent periods. The effect of any pian amendments is
recognized in the Statement of Profit and Loss.

d. Compensated absences

The Company has a policy on compensated absences which are both accumulating and
non-accumulating in nature; The expected cost of accumulating compensated absences is
determined by actuarial valuation performed by an independent actuary at each Balance
Sheet date using projected unit credit method on thE additional amount expected to be
paid / availed as a result of the unused entitlement that has accumulated at the Balance
Sheet date. Expense on non-accumulating compensated absences is recognized in the
period m which the absences occur.

xb Employee stock option

In respect of stock options granted pursuant to the Company''s Employee Stock Option
Scheme, the Company recognise employee compensation expense, using the grant date
fan value in accordance with Ind-As 102 - Share Based payment, on straight line basis
over the period over which the employees would become unconditionally entitled to apply
for the shares,

4. Significant accounting policies

i. Revenue recognition

The Company derives revenues primarily from IT services comprising licensing of
eLearning software products and platforms, software development and related services
and maintenance, licensing the educational learning material copy rights, Content and KPO
services in eLearning sector. Contracts with customers are either on a time and material,
unit of work, fixed-price or on a fixed-timeframe basis.

Revenue is recognized upon transfer of control of promised products or services
("performance obligations") to customers in an amount that reflects the consideration the
Company has received or expects to receive in exchange for these products or services
("transaction price"). When there is uncertainty as to collectability, revenue recognition is
postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a "right to use" the licenses is
recognized at the time the license is made available to the customer. Revenue from
licenses where the customer obtains a "right to access" is recognized over the access
period.

Revenue on time and material and unit of work based contracts, are recognized on
output basis measured by units delivered, efforts expended, number of transactions
processed etc.

Revenue related to fixed-price maintenance and support revenue is recognized rateable
on a straight-line basis when services are performed through an indefinite number of
repetitive acts over a specified period or the Company is standing ready to provide the
services.

Revenue from other fixed-price, fixed-timeframe contracts, where the performance
obligations are satisfied over time is recognized using the percentage of completion
method of accounting with contract cost incurred determining the degree of completion of
the performance obligation. Efforts or costs expended are used to determine progress
towards completion as there is a direct relationship between input and productivity.
Progress towards completion is measured as the ratio of costs or efforts incurred to date
(representing work performed) to the estimated total costs or efforts.

Revenue is measured based on the transaction price, which is the consideration, adjusted
for volume discounts, service level credits, price concession and incentives, if any, as
specified in the contract with the customer. The Company assesses the services promised
in a contract and identifies distinct performance obligations in the contract and allocates
the transaction price to each distinct performance obligation based on the relative
standalone selling price.

The billing schedules agreed with customers include periodic performance-based billing
and / or milestone-based progress billings. Revenues in excess of billing are classified as
unbilled revenue while billing in excess of revenues are classified as contract liabilities
(which we refer to as unearned revenues).

In accordance with Ind-AS 37, the Company recognise an onerous contract provision when
the unavoidable costs of meeting the obligations under a contract exceed the economic
benefits to be received.

The incremental costs of obtaining a contract (i.e., costs that would not have been incurred
if the contract had not been obtained) are recognized as an asset if the Company expects
to recover them. Any capitalized contract costs are amortized, with the expense recognized
as the Company transfers the related goods or services to the customer. The Company
presents revenues net of indirect taxes in its Consolidated Statement of Profit and Loss.

The Company disaggregates revenue from contracts with customers by geography and
business verticals.

ii. Property, plant and equipment

Property, plant and equipment are measured at cost of acquisition or construction less
accumulated depreciation and impairment losses, if any. The cost of an item of property,
plant and equipment comprises its purchase price, including import duties and other non-
refundable taxes or levies and any directly attributable cost of bringing the asset to its
working condition for its intended use and any trade discounts and rebates are deducted
in arriving at the purchase price. 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.

Capital work-in-progress are measured at cost less accumulated impairment losses, if any.

Depreciation on property, plant and equipment is provided on pro-rata basis using the
Straight-Line method based on the useful life specified in the Schedule II to the Companies
Act, 2013.

Subsequent expenditure related to Property, plant and equipment is capitalized only when
it is probable that future economic benefits associated with these will flow to the Company
and the cost of item can be measured reliably. Other repairs and maintenance costs are
recognized in the Statement of Profit & Loss while incurred.

The Company doesn''t have any Benami Property under the Benami Transactions
(Prohibition Act), 1988.

iii. Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment.
Intangible assets are amortized over their respective individual estimated useful lives on
a straight-line basis, from the date that they are available for use. 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.

The estimated useful life of amortizable intangibles is reviewed and where appropriate are
adjusted, annually. The estimated useful lives of the amortizable intangible assets for the
current and comparative periods are considered as (Customer-related software products)
10 years. (Comparative periods 10 years)

Research costs are expensed as incurred. Software product development costs are
expensed as incurred unless technical and commercial feasibility of the project is
demonstrated, future economic benefits are probable, the Company has an intention and
ability to complete and use or sell the software, and the costs can be measured reliably.
The costs which can be capitalized include the cost of material, direct labour and overhead
costs that are directly attributable to preparing the asset for its intended use.

Intangible 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 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.

iv. Impairment

a) Financial assets

The Company applies the expected credit loss model for recognizing impairment loss on
financial assets measured at amortized cost, trade receivables, unbilled receivables,
contract assets and other financial assets. Expected credit loss is the difference between
the contractual cash flows and the cash flows that the entity expects to receive, discounted
using the effective interest rate.

Loss allowances for trade receivables, unbilled receivables and contract assets are
measured at an amount equal to lifetime expected credit loss. Lifetime expected credit
losses are the expected credit losses that result from all possible default events over the
expected life of a financial instrument. Lifetime expected credit loss is computed based on
a provision matrix which takes in to account risk profiling of customers and historical credit
loss experience adjusted for forward looking information.

b) Non-financial assets

The Company assesses long-lived assets such as property, plant and equipment, right of use
assets and intangible assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset or group of assets may not
be recoverable. If any such indication exists, the Company estimates the recoverable
amount of the asset or group of assets,

The recoverable amount of an asset or cash generating unit is the higher of its fair value
less cost of disposal (FVLCD) and its value-in-use (VIU). The VIU of long-lived assets is
calculated using projected future cash flows. FVLCD of a cash generating unit is computed
using turnover and earnings multiples. If the recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset belongs is less than its''
carrying amount, the carrying amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized in the consolidated statement of profit
and loss. If at the reporting date, there is an indication that a previously assessed
impairment loss no longer exists, the recoverable amount is reassessed and the
impairment losses previously recognized are reversed such that the asset is recognized at
its recoverable amount but not exceeding written down value which would have been
reported if the impairment losses had not been recognized initially. An impairment in
respect of goodwill is not reversed.

v. Leases

The Company evaluates each contract or arrangement, whether it qualifies as lease as
defined under Ind AS 116.

The Company recognises the right of use assets and lease liability at the commencement
date of the lease. The right of use asset is initially measured at cost, which comprises of
present value of future lease rent payments adjusted for any payments made at or before
commencement date, any initial direct cost incurred and estimate of cost to dismantle or
remove an underlying asset or to restore an asset less any lease incentives received. The
lease liability is initially measured at present value of lease payments that is not paid at
commencement date discounted at implicit rate mentioned in lease or incremental
borrowing rate. The generally uses incremental borrowing rate as discount rate. The right
of use asset is depreciated using the straight-line method from the commencement date
of the lease over useful life of right to use asset.

Subsequently, the right of use assets is measured at cost less any accumulated
depreciation and accumulated impairment losses, if any. The estimated useful lives of
right of use assets are determined on the same basis as those of property, plant and
equipment.

The Company applies Ind AS 36 to determine whether a RoU asset is impaired and
accounts for any identified impairment loss as described in the impairment of non-financial
assets below.

After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made.

The Company recognizes the amount of the re-measurement of lease liability as an
adjustment to the right-of-use assets. Where the carrying amount of the right-of-use asset
is reduced to zero and there is a further reduction in the measurement of the lease liability,
the Company recognizes any remaining amount of the re-measurement in statement of
profit and loss.

Lease liability payments are classified as cash used in financing activities in the statement
of cash flows.

The Company as a lessor

Leases under which the Company is a lessor are classified as a finance or operating lease.
Lease contracts where all the risks and rewards are substantially transferred to the lessee,
are classified as a finance lease. All other leases are classified as operating lease.

For leases under which the Company is an intermediate lessor, the Company accounts for
the head-lease and the sub-lease as two separate contracts. The sub-lease is further
classified either as a finance lease or an operating lease by reference to the RoU asset
arising from the head-lease.

vi. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares
outstanding during the period adjusted for treasury shares held. Diluted earnings per share
is computed using the weighted-average number of equity and dilutive equivalent shares
outstanding during the period, using the treasury stock method for options, 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 statements by the Board of
Directors.

vii. Functional and presentation currency

These standalone financial statements are presented in Indian rupees, which is the
functional currency of the Company.

viii. Foreign currency transactions and translation

a. Transactions and balances

Transactions in foreign currency are translated into the functional currencies using the
exchange rates prevailing at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions and from translation at the
exchange rates prevailing at the reporting date of monetary assets and liabilities
denominated in foreign currencies are recognized in the statement of profit and loss and
reported within foreign exchange gains/(losses), net, within results of operating activities.
Gains/(losses), net, relating to translation or settlement of borrowings denominated in
foreign currency are reported within finance costs. Non-monetary assets and liabilities
denominated in foreign currency and measured at historical cost are translated at the
exchange rate prevalent at the date of transaction.

b. Foreign operations

For the purpose of presenting financial statements, the assets and liabilities of the
Company''s foreign operations that have a functional currency other than Indian rupees
are translated into Indian rupees using exchange rates prevailing at the reporting date.
Income and expense items are translated at the average exchange rates for the period.
Exchange differences arising, if any, are recognized in other comprehensive income and
held in foreign currency translation reserve (FCTR), a component of equity. When a foreign
operation is disposed of, the relevant amount recognized in FCTR is transferred to the
statement of profit and loss as part of the profit or loss on disposal.

ix. Financial assets and liabilities

A) Initial Recognition

Financial assets and liabilities are recognised when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial asset or financial liability.

B) Subsequent measurement

i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it held within a business
model whose objectives is to hold the asset in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified dates cash flows that are
solely payment of principals and interest on the principal amount outstanding.

ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive
income if it is held within a business model whose objective is achieved by both contractual
cash flows and selling financial asset and the contractual terms of the financial asset give
rise on specified dates cash flows that are solely payment of principals and interest on the
principal amount outstanding.

iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently
fair valued through profit or loss.

However, in cases where the company has made an irrevocable election for particular
investment in equity instrument that would otherwise be measured at fair value through
profit or loss, the subsequent changes in fair value are measured in other comprehensive
income.

C) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest
method, except for contingent consideration recognised in business combination which is
subsequently measured at fair value through profit or loss. For trade and other payables
maturing within one year from the balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these instruments.

D) Investment in subsidiaries

Investment in subsidiaries are measured at cost less impairment loss, if any.

E) Derecognition of financial assets and liabilities

The Company derecognises a financial asset when the contractual rights to the cash flow
from the financial asset expires or it transfers the financial asset and the transfer qualifies
for derecognition under Ind-AS 109. A financial liability (or a part of financial liability) is
derecognised when the obligation specified in the contract is discharged or cancelled or
expires.

F) Cash and cash equivalents

The Company''s cash and cash equivalents consist of cash on hand and in banks and
demand deposits with banks, which can be withdrawn at any time, without prior notice or
penalty on the principal.

For the purposes of the cash flow statement, cash and cash equivalents include cash on
hand, in banks and demand deposits with banks are considered part of the Company''s
cash management system. In the balance sheet, bank overdrafts are presented under
borrowings within current liabilities.

G) Other financial assets

Other financial assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are presented as current assets,
except for those maturing later than 12 months after the reporting date which are
presented as non-current assets. These are initially recognized at fair value and
subsequently measured at amortized cost using the effective interest method, less any
impairment losses. These comprise trade receivables, unbilled receivables, employee and
other advances and eligible; current and non-current assets.

H)Trade payables and other payables

Trade payables and other payables are initially recognized at fair value, and subsequently
carried at amortized cost using the effective interest method. For these financial
instruments, the carrying amounts approximate fair value due to the short-term maturity
of these instruments.

x. Employee benefits

a. Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are
classified as short-term employee benefits. Benefits such as salaries and wages are
recognised in the period in which the employee renders the related service. A liability is
recognised for the amount expected to be paid when there is a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.

b. Provident fund

Eligible employees of the company receive benefits from a provident fund, which is a
defined benefit plan. Both the eligible employee and the Company make monthly
contributions to the provident fund plan equal to a specified percentage of the covered
employee''s salary. The monthly contributions are made to the government administered
provident and pension fund. The rate at which the annual interest is payable to the
beneficiaries is being administered by the government and the same is paid by the
provident and pension fund.

c. Gratuity

The Company provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan")
covering eligible employees of the company. The Gratuity Plan provides a lump-sum
payment to vested employees at retirement, death, incapacitation or termination of
employment, of an amount based on the respective employee''s salary and the tenure of
employment with the company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation,
performed by an independent actuary, at each Balance Sheet date using the projected
unit credit method. The company recognizes the net obligation of a defined benefit plan in
its Balance Sheet as an asset or liability. Gains and losses through remeasurements of the
net defined benefit liability are recognized in other comprehensive income and are not
reclassified to profit or loss in subsequent periods. The effect of any plan amendments is
recognized in the Statement of Profit and Loss.

d. Compensated absences

The Company has a policy on compensated absences which are both accumulating and
non-accumulating in nature. The expected cost of accumulating compensated absences is
determined by actuarial valuation performed by an independent actuary at each Balance
Sheet date using projected unit credit method on the additional amount expected to be
paid / availed as a result of the unused entitlement that has accumulated at the Balance
Sheet date. Expense on non-accumulating compensated absences is recognized in the
period in which the absences occur.

xi. Employee stock option

In respect of stock options granted pursuant to the Company''s Employee Stock Option
Scheme, the Company recognise employee compensation expense, using the grant date
fair value in accordance with Ind-As 102 - Share Based payment, on straight line basis
over the period over which the employees would become unconditionally entitled to apply
for the shares.