Notes to Accounts of Affle 3I Ltd.

Mar 31, 2025

xvii) Provisions

Provisions are recognized 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. 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
recognized as a finance cost.

Provisions are reviewed at the end of each
reporting period and adjusted to reflect
the current best estimate. If it is no longer
probable that an outflow of resources
would be required to settle the obligation,
the provision is reversed.

xviii) Contingent liabilities

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. Refer note 31 (b).

xix) Share-based payments

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).

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 recognized, together with a
corresponding increase in share-based
payment (SBP) reserves in equity, over the
period in which the service conditions are
fulfilled in employee benefits expense. The
cumulative expense recognized 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

identified as operating segments
for which the operating results are
regularly reviewed by the CODM to make
decisions about resource allocation and
performance measurement.

Inter-segment transfers

The Company generally accounts for
intersegment sales and transfers at cost
plus appropriate margins.

Allocation of common costs

Common allocable costs are allocated to
each segment according to the relative
contribution of each segment to the
total common costs.

Unallocated items

Unallocated items include general
income and expense items which are not
allocated to any business segment.

Segment accounting policies

The Company prepares its segment
information in conformity with the
accounting policies adopted for preparing
and presenting the financial statements
of the Company as a whole.

xxiii) Recent Pronouncements

Ministry of Corporate Affairs (“MCA”)
notifies new standards or amendments to
the existing standards under Companies
(Indian Accounting Standards) Rules as
issued from time to time. For the year
ended March 31, 2025, MCA has notified
Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions,
applicable to the Company w.e.f. April
1, 2024. The Company has reviewed 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 recognized as at the beginning
and end of that period and is recognized
in employee benefits expense.

Service 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 recognized for awards that
do not ultimately vest because service
conditions have not been met.

When the terms of an equity-settled
award are modified, the minimum
expense recognised is the grant date fair
value of the unmodified award, provided
the original vesting terms of the award are
met. An additional expense, measured as
at the date of modification, is recognised
for any modification that increases
the total fair value of the share-based
payment transaction, or is otherwise
beneficial to the employee. 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.

xx) Treasury shares

The ESOP trust has been treated as an
extension of the company and accordingly
shares held by ESOP trust are netted off
from the total share capital. Consequently,
all the assets, liabilities, income and
expenses of the trust are accounted as
assets and liabilities of the company,
except for profit/loss on issue of shares
to the employees and dividend received
by trust which are directly adjusted
in the Affle (India) limited employee
welfare trust reserve.

xxi) Earnings per share

Basic earnings per share (EPS) are
calculated by dividing the net profit or
loss for the year attributable to equity
shareholders by the weighted average
number of equity shares outstanding
during the year. The weighted average
number of equity shares outstanding
during the period is adjusted for events
such as bonus issue, bonus element in a
rights issue, share split, and reverse share
split (consolidation of shares) that have
changed the number of equity shares
outstanding, without a corresponding
change in resources.

Diluted EPS amounts are calculated by
dividing the profit or loss attributable
to equity holders of the Company (after
adjusting the corresponding income/
charge for dilutive potential equity shares)
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.

xxii) Segment reporting

The Chief Operating Decision Maker
(CODM), being the Board of Directors
(Board), evaluates the Company''s
performance from a services perspective
and has identified the ''business of
providing services in advertisement
and software development'' as a single
segment. As part for geographical
segments, the company mainly operates
in India only. The aforesaid is in line with
review operating results by the CODM.
As such, there is no separate reportable
segments as per the requirement of IND
AS 108 -''Operating Segments'' notified
under the companies (Indian Accounting
Standards) Rules,2015, as amended.

Identification of segments

Operating segments are reported
in a manner consistent with the
internal reporting provided to the chief
operating decision maker (CODM).
Only those business activities are

new pronouncements and based on its
evaluation has determined that it does
not have any significant impact in its
financial statements.

xxiv) Use of Estimates, assumptions,
Judgments and major sources of
estimation uncertainty

In preparing these financial statements,
management has made judgements,
estimates and assumptions that affect the
application of accounting policies and the
reported amounts of assets, liabilities, the
disclosures of contingent liabilities and
contingent assets as at the date of financial
statements, income and expenses during
the period. Actual results may differ
from these estimates. Estimates and
underlying assumptions are reviewed on
an on-going basis. Revisions to estimates
are recognised prospectively.

In the process of applying the company''s
accounting policies, management has
made the following judgement, estimates
and assumptions:

• Deferred tax assets (refer note 8(ii))

• Employee benefit (refer note 29)

• Leases (refer note 30)

• Contingent liabilities (refer note 31(b))

• Impairment of goodwill (refer note 38)

• Share based payment (refer note 39)

• Investment held for sale (refer note 47)

• Amortisation of intangible assets
(refer note 4 and 25)

• Intangible assets under development
(refer note 4)

Terms/rights attached to preference shares

*The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be
convertible into equity shares of Affle X Private Limited after complying the provision of Companies Act, 2013 and the manner
as specified in the subscription agreement. The Company does not have any voting rights in the invested entity except in case
any resolution is passed. The holders shall have an option to redeem only the fully paid up Preference share having maximum
redemption period of 20 years.

**The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can
be convertible into equity shares of Explurger Private Limited after complying the provision of Companies Act, 2013 and the
manner as specified in the subscription agreement. The Company have voting right as agreed in Series A share subscription
and shareholder agreement. Series A CCPS are non-redeemable and compulsory convertible into equity share in the ratio of
1:1 on completion of 19 (Nineteen) year and 11 (eleven) month or as per Series A share subscription and shareholder agreement.
***The Company has granted employees stock option to the eligible employees of wholly owned subsidiary and its subsidiaries
controlled through intermediate subsidairies. This has been treated as deemed investment in respective subsidiary by the
Company as per guidance under IND AS.

8 (ii) DEFERRED TAX

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities
relates to income taxes levied by the same tax authority.

In assessing the realisability of deferred tax assets, management considers whether it is probable,
that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of
deferred tax assets is dependent upon the generation of future taxable income during the years
in which the temporary differences become deductible. Management considers the projected
future taxable income and tax planning strategies in making this assessment. Based on the level

Nature and purpose of other equity
Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less
any transfers to general reserve, dividends or other distributions paid to shareholders. Retained
earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not
be reclassified to Statement of Profit and Loss.

Securities premium

Securities premium represents the amount received in excess of par value of equity shares.
Section 52 of Companies Act, 2013 specifies restriction and utilisation of security premium.

Treasury shares (Shares held by ESOP Trust)

Own equity instruments that held by Trust are recognised at cost and deducted from equity.
No gain or loss is recognised in statement of profit and loss on the purchase, sale, issue or
cancellation of the Company''s own equity instruments. Any difference between the carrying
amount and the consideration, if reissued, is recognised in other equity

Share based payment reserve

The share options-based payment reserve is used to recognise the grant date fair value of options
issued to employees under employee stock option plan.

(iii) Performance obligations

Information about the Company''s performance obligations are summarised below:

Consumer platform

The performance obligation is satisfied at a point in time and payment is generally due within 30
to 90 days of completion of services and acceptance of the customer. In some contracts, short¬
term advances are required before the advertisement services are provided.

As the duration of the contracts for consumer is less than one year, the Company has
opted for practical expedient and decided not to disclose the amount of the remaining
performance obligations.

Other operating revenue

The performance obligation is satisfied at a point in time and payment is generally due within
30 to 90 days of completion of services and acceptance of the customer.

Notes:

There is no difference between the amount of revenue recognised in the profit and loss statement
and the contract price.

28. EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders
of the company by the weighted average number of equity shares outstanding during the year
excluding treasury shares.

Diluted earning per share adjusts the figure used in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs associated with
dilutive equity shares and the weighted average number of additional equity shares that would have
been outstanding assuming the conversion of all dilutive potential equity shares.

The present value of the obligation under such defined benefit plan is determined based on
an actuarial valuation as at the reporting date using the projected unit credit method, which
recognizes each year of service as giving rise to additional unit of employee benefit entitlement
and measures each unit separately to build up the final obligation. The obligations are measured
at the present value of the estimated future cash flows. The discount rate used for determining
the present value of the obligation under defined benefit plans is based on the market yields on
Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are
recognised immediately in the other comprehensive income (OCI).

This is a unfunded benefit plan for qualifying employees. The scheme provides for a lump sum
payment to vested employees at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service.

The following tables summaries the components of net benefit expense recognised in the
statement of profit or loss and other comprehensive income and amounts recognised in the
balance sheet for the gratuity plan:

29. EMPLOYEE BENEFITS

A. Defined contribution plans

Provident fund:

The Companymakes contribution towards employees'' provident fund. The Companyhas recognised
INR 10.58 million (March 31, 2024: INR 10.99 million) as an expense towards contribution to this plan.

B. Defined benefit plans

Gratuity:

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who
have completed five years of service are entitled to specific benefit. The level of benefit provided
depends on the member''s length of service and salary retirement age. The employee is entitled
to a benefit equivalent to 15 days salary last drawn for each completed year of service with part
thereof in excess of six months. The same is payable on termination of service or retirement or
death whichever is earlier.

(j) Description of risk exposures: Company is exposed to various risks as follows:

a) Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary
increase rate assumption in future valuations will also increase the liability.

b) Discount rate- Reduction in discount rate in subsequent valuations can increase the
plan''s liability.

c) Mortality and disability- Actual deaths and disability cases proving lower or higher than
assumed in the valuation can impact the liabilities.

d) Withdrawals- Actual withdrawals proving higher or lower than assumed withdrawals and
change of withdrawal rates at subsequent valuations can impact Plan''s liability.

30. LEASES

Company as lessee

The Company has taken office premises on lease. The lease has been entered for a period ranging
from one to four years with renewal option. The Company has the option, under some of its lease, to
renew the lease for an additional years on a mutual consent basis.

31. COMMITMENTS AND CONTINGENT LIABILITIES

a. Capital commitments

As at March 31, 2025, the Company has commitments on capital account and not provided for
(net of advances) of INR 10.08 million (March 31, 2024: INR 8.64 million).

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts includes the following:

- Income tax demand from the Income tax authorities for assessment year 2017-18 of INR
64.88 million on account of disallowance of bad debts written off, advances written off,
amortization of goodwill and certain expenses under various heads as claimed by the
Company in the income tax. The matter is pending before Commissioner of Income
Tax (Appeals), Mumbai. In response (dated January 29, 2020) to the notice company has
discharged 20% of demand i.e. INR 13 million by depositing INR 6.50 million vide challan
No 11922 with HDFC Bank on January 28, 2020 and adjusting a refund of INR 6.25 million
which is outstanding for AY 2015-16 on which interest under section 244A of the Act is
also pending and this will exceeds a residual amount of INR 6.50 million.

- Income tax demand from the Income tax authorities order dated September 17, 2022,
for assessment year 2020-21 of INR 1.13 million on account of disallowance of Corporate
Social Responsibility (CSR) expenditure under section 80G of the Income Tax Act, 1961
of INR 2.15 million as claimed by the Company in the income tax. The matter is pending
before Commissioner of Income Tax (Appeals), Mumbai.

- Income tax demand from the Income tax authorities order dated October 10, 2023
for assessment year 2021-22 of INR 31.7 million on the ground that documentation
not provided. Mumbai High court has stayed the demand in the Order on May 7, 2024.
further the Income tax authorities order dated October 24, 2024 for assessment year
2021-22 of INR 30.2 million on account of transfer pricing adjustments for SBLC and
Licence fee. The matter is pending before Delhi bench of Income Tax Appellate Tribunal.

The Company is contesting the demands and the management, including its tax advisors,
believes that its position will likely be upheld in the appellate process. No tax expense has
been accrued in the financial statements for the demand raised. The management believes
that the ultimate outcome of these proceedings will not have a material adverse effect
on the Company''s financial position and results of operations. The likelihood of the above
cases going in favour of the Company is probable and accordingly has not considered any
provision against the demands in the financial statements.

(ii) (a) The opening balance of Stand by Letter of Credit (SBLC) as on April 01 ,2024 is amounting
to INR 2,508.47 million (equivalent to USD 30.10 million) was taken in favour of Axis
Bank Limited, Singapore. During the current year it is reduced by INR 1450.90 million
(equivalent to USD 17.16 million). The outstanding closing balance of SBLC in favour of
Axis Bank Limited, Singapore is INR 1,107.07 million (equivalent to USD 12.94 million).

(b) The opening balance of Stand by Letter of Credit (SBLC) as on April 01,2024 is amounting
to INR 500.05 million (equivalent of USD 6.00 million) was taken in favour of HDFC Bank
Limited, Bahrain. The outstanding closing balance of SBLC in favour of HDFC Bank
Limited, Bahrain is INR 513.17 million (equivalent to USD 6.00 million).

No amount has been written off or written back in the year in respect of debts due from/to above
related parties.

Terms and conditions of transactions with related parties

The sale and purchase from related parties are made on terms equivalent to those that prevail
in arm''s length transaction. Outstanding balances at the year end are unsecured and interest
free and settlement occurs in cash. For the year ended March 31, 2025 and year ended March 31,
2024, the Company has not recorded any impairment of trade receivables relating to amounts
owed by related parties. This assessment is undertaken each financial year through examining
the financial position of the related party and the market in which the related party operates.

33. SEGMENT INFORMATION

(a) The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates
the Company''s performance from a services perspective and has identified the ‘business of
providing services in advertisement and software development'' as a single segment. As part for
geographical segments, the company mainly operates in India only. The aforesaid is in line with
review operating results by the CODM. As such, there is no separate reportable segments as per
the requirement of IND AS 108-''operating Segments Reporting'' notified under the companies
(India Accounting Standards) Rules,2015, as amended.

During the current year ended March 31, 2025, Chief operating decision maker (‘CODM'') of the
Company reviews the performance of the company on a consolidated basis and not as India
and Outside India, considering the fact that operating platforms of the Group are inter-operable
globally and across customers/vendors. As the Company considers entire operations related to
consumer platform stack as a single operating segment.

(b) Information about major customers

There is one ( March 31, 2024: none) major external customer with whom company has earned
revenue of more than 10% during the year amounting to INR 768.13 million (March 31, 2024: Nil).

The management assessed that cash and cash equivalent, other bank balances, trade receivables,
trade payables and other financial liabilities approximate their carrying amounts and fair value of the
Company''s financial instruments

The fair value of the financial assets and liabilities is included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale. Further, the subsequent measurements of all assets and liabilities (other than
investments) is at amortised cost, using effective interest rate (EIR) method.

The following methods and assumptions were used to estimate the fair values:

Receivables are evaluated by the Company based on parameters such as interest rates, specific
country risk factors, individual creditworthiness of the customer and the risk characteristics of the
financed project based on this evaluation, allowances are taken into account for the expected credit
losses of these receivables.

The fair value of unquoted instruments is estimated by discounting future cash flows using rates
currently applicable for debt on similar terms, credit risk and remaining maturities.

For other financial assets and liabilities that are measured at fair value, the carrying amounts are
equal to the fair values.

35. FAIR VALUE HIERARCHY

All financial instruments for which fair value is recognised or disclosed are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair
value measurements as a whole.

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

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the
fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair
value measurement is not based on observable market data.

The cost of unquoted investment included in level 3 of fair value hierarchy approximate their face
value because there is a wide range of possible fair value measurement and the cost represents
estimate of fair value within that range

The following table provides the fair value measurement hierarchy of the Company''s assets
and liabilities.

Valuation technique used to derive fair values

The Company''s unquoted instruments is estimated by discounting future cash flows using rates
currently applicable for debt on similar terms, credit risk and remaining maturities. The valuation
requires management to make certain assumptions about the model inputs, including forecast
cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within
the range can be reasonably assessed and are used in management''s estimate of fair value for these
unquoted equity investments.

36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprises trade payables, other payables, capital
creditors and employee related payables. The main purpose of these financial liabilities is to finance
the Company''s operations and to provide guarantees to support its operations. The Company''s
principal financial assets include trade and other receivables, and cash and cash equivalent that
derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management
oversees the management of these risks. The Company''s senior management is responsible to ensure
that Company''s financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company''s policies and
risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks,
which are summarised below:

a. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of a change in market price.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will
fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk

of changes in foreign exchange rates relates primarily to the Company''s operating activities
(when revenue or expense is denominated in a foreign currency).

The Company does not use derivative financial instruments such as forward exchange
contracts or options to hedge its risk associated with foreign currency fluctuations or for
trading/speculation purpose.

The amount of foreign currency exposure not hedged by derivative instruments or
otherwise is as under:

b. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument
or customer contract, leading to a financial loss. The Company is exposed to credit risk from
its operating activities (primarily trade receivables) and from its investing activities, including
deposits with banks and financial institutions.

A counterparty whose payment is due more than 90 days after the due date is considered
as a defaulted party. This is based on considering the market and economic forces in which
the Company operates. The Company write-off the amount if the credit risk of counter-party
increases significantly due to its poor financial position.

All the financial assets carried at amortised cost were into good category except some portion of
trade receivables considered under doubtful category (refer note 10).

Trade receivables and contract assets

Trade receivables are typically unsecured. Credit risk is managed by the Company through
credit approvals, establishing credit limits and continuously monitoring the creditworthiness of
customers to which the Company grants credit terms in the normal course of business.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only
accepting highly rated banks and diversifying bank deposits and accounts in different banks
across the country.

Other financial assets

Other financial assets are considered to have low credit risk since there is a low risk of default by
the counterparties owing to their strong capacity to meet contractual cash flow obligations in
the near term. Credit risk related to these other financial assets is managed by monitoring the
recoverability of such amounts continuously, while at the same time internal control system in
place ensure the amounts are within defined limits.

The Company is exposed to credit risk in the event of non-payment by customers. An impairment
analysis is performed at each reporting date. The Company uses a provision matrix to measure
the expected credit loss of trade receivables.

None of those trade receivable past due or impaired have had their terms renegotiated. The
maximum exposure to credit risk at the reporting date is the fair value of each class of receivables
presented in the financial statement. The Company does not hold any collateral or other credit
enhancements over balances with third parties nor does it have a legal right of offset against
any amounts owed by the Company to the counterparty. For receivables which are overdue the
Company has subsequently received payments and has reduced its overdue exposure.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in
accordance with the Company''s policy. Investments of surplus funds are made only with
approved counterparties and within credit limits assigned to each counterparty. Counterparty
credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be
updated throughout the year subject to approval of the Company''s finance committee. The
limits are set to minimise the concentration of risks and therefore mitigate financial loss through
counterparty''s potential failure to make payments.

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
become due. The Company monitors their risk of shortage of funds using cash flow forecasting
models. These models consider the maturity of their financial investments, committed funding
and projected cash flows from operations. The Company''s objective is to provide financial
resources to meet its business objectives in a timely, cost effective and reliable manner.

A balance between continuity of funding and flexibility is maintained through the use of
borrowings. The Company also monitors compliance with its debt covenants. The maturity
profile of the Company''s financial liabilities based on contractual undiscounted payments is
given in the table below:

37. CAPITAL MANAGEMENT

The Board''s policy maintains a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitor the
return on capital employed as well as the amount of dividend if any to shareholders.

For the purpose of the Company''s capital management, capital includes issued capital and all other
equity reserves attributable to the equity shareholders of the Company. The primary objective of the
Company when managing capital is to safeguard its ability to continue as a going concern and to
maintain an optimal capital structure so as to maximize shareholder value. As at March 31, 2025 and
March 31, 2024, the Company has only one class of equity shares and has no debt. Consequent to
such capital structure, there are no externally imposed capital requirements.

The Company manages its capital structure and makes adjustments in light of changes in economic
conditions and the requirements of the financial covenants. To maintain or adjust the capital structure,
the Company may adjust the dividend payment to shareholders, return capital to shareholders or
issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus
net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and
other payables, less cash and cash equivalents. The Company''s policy is to keep the gearing ratio
between 0% and 10%.

No changes were made in the objectives, policies or processes for managing capital during the year.

38. IMPAIRMENT TESTING OF GOODWILL

Goodwill acquired through business combinations have indefinite life. The Company performs the
impairment testing at the initial recognition of Goodwill. The Company further performs impairment
testing as and when the indicators arise. At present there is no indicator for impairment of Goodwill.
The Company considers the relationship between its value in use and its carrying value, among
other factors, when reviewing for indicators of impairment.

The recoverable amount of the goodwill is determined based on value in use (''VIU'') calculated using
cash flow projections from financial budgets approved by management covering a five year period
and the terminal value (after considering the relevant long-term growth rate) at the end of the said
forecast periods. The Company has used long-term growth rate of 20% (March 31, 2024:10%) and
discount rate of 11.70% (March 31, 2024: 11.70%) for calculation of terminal value.

The said cash flow projections are based on the senior management past experience as well as
expected met trends for the future periods. The projected cash flows have been updated to reflect
the decreased demand for services. The calculation of weighted average cost of capital (WACC) is
based on the Company''s estimated capital structure as relevant and attributable to the Company.
The WACC is also adjusted for specific risks, market risks and premium, and other inherent
risks associated with similar type of investments to arrive at an approximation of the WACC of a
comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks,
are then applied to the above mentioned projections of the estimated future cash flows to arrive at
the discounted cash flows. The Company considers the consumer platform stack as a single CGU for
the purpose of impairment testing of goodwill.

Discount rates represent the market assessment of the risks, taking into consideration the time value
of money and individual risks of the underlying assets that have not been incorporated in the cash
flow estimates. The discount rate calculation is based on the specific circumstances of the Company
and its operating segments and is derived from its WACC.

The key assumptions used in the determination of VIU are the revenue annual growth rates and the
EBITDA growth rate. Revenue and EBITDA growths are based on average value achieved in preceding
years. Also, the growth rates used to extrapolate the cash flows beyond the forecast period are based on
industry standards.

Based on the above assumptions and analysis, no impairment was identified as at March 31, 2025
(March 31, 2024: Nil). Further, on the analysis of the said calculation''s sensitivity to a reasonably possible
change in any of the above mentioned key assumptions/parameters on which the management
has based determination of the recoverable amount, there are no scenarios identified by the
management wherein the carrying value could exceed its recoverable amount.

39. EMPLOYEE SHARE BASED PAYMENT

During the year ended March 31,2022, the Company has issued Employee Stock Option Scheme -2021".
The relevant details of the scheme and the grant are as follows:

Scheme: Affle (India) Limited Employee Stock Option Scheme - 2021

a) The Company instituted an Employees Stock Option Scheme (“ESOS”) for certain employees of
the Company, its subsidiary and its step down subsidiaries (together know as Group) as approved
by the shareholders on September 23, 2021 which provides for a grant of 3,750,000 options (each
option convertible into share) to employees of the Group.

During the year ended March 31, 2025 the Company has further granted 712,982 (March 31, 2024
189,420) options to the eligible employees as approved by the nomination and remuneration
committee of the Company.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC
beyond the statutory period.

(iv) The Company has not traded or invested in Cryptocurrency transactions / balances or Virtual
Currency during the financial year ended March 31, 2025 and March 31, 2024.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the group (ultimate beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign
entities (funding party) with the understanding (whether recorded in writing or otherwise) that
the group shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (ultimate beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(vii) There is no income surrendered or disclosed as income during the current or previous year
in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the
books of account.

(viii) The Company has not been declared as wilful defaulter by any bank or financial institution
or other lender.

(ix) The Company has taken loan facility from bank but not utilised in the current year or previous year.

(x) The Company has not entered into any scheme of arrangement which has an accounting impact
on current or previous financial year

(xi) The Company has not revalued its property, plant and equipment (including right-of-use assets)
or intangible assets or both during the current or previous year

(xii) The Company has not owned any immovable property.

(xiii) The Company has complied with the number of layers prescribed under the companies Act,
2013, read with the companies (Restriction on number of layers) Rules, 2017.

(xiv) The company has not owned any immovable property. All the properties where the company is
the lessee, the lease agreements are duly executed in the favour of lessee.

xv) Disclosure as per section 186 of Companies Act 2013 The details of loans, guarantees and
investments under section 186 of the Companies Act, 2013 read with the Companies (Meetings
of Board and its Powers) Rules, 2014 are as follows:

(a) Refer note 32 for details of loan given by the Company and balance outstanding thereof to
Affle International Pte. Ltd (‘AINT'') as at March 31, 2025 and March 31, 2024. Further maximum
balance outstanding in respect to aforementioned loan is INR 1,905.84 Million and INR
1,905.84 million during the year ended March 31, 2025 and March 31, 2024 respectively.

(b) Refer note 31(b)(ii) for details of guarantees given by the Company and balance outstanding
thereof to Affle International Pte. Ltd (‘AINT'') as at March 31, 2025 and March 31, 2024. Further
maximum balance outstanding in respect to aforementioned guarantees is INR 2,793.94
Million and INR 3,025.40 during the year ended March 31,2025 and March 31,2024 respectively.

42. 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. However, the date on which the Code will come into effect has not
been notified and the final rules/interpretation have not yet been issued. The Company will assess
the impact of the Code when it comes into effect and will record any related impact in the period the
Code becomes effective.

43. The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the
proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts)
Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its

books of account, shall use only such accounting software which has a feature of recording audit trail
of each and every transaction, creating an edit log of each change made in the books of account along
with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company has used an accounting software which is operated by a third party service provider
for maintenance of books of accounts. The Company has obtained the ‘Independent Service
Auditor''s Assurance Report on Controls relevant to Security, Availability and Confidentiality (‘Type 2
report'' issued in accordance with ISAE 3000 (Revised), Assurance Engagements Other than Audits
or Reviews of Historical Financial Information) issued by the International Auditing and Assurance
Standards Board for the year ended March 31, 2025. The accounting software is used in form of
software-as-a-service; and SOC 2 report does not provide information on availability of audit trail at
database level.

44. The Company has appointed independent consultants for conducting a transfer pricing study to
determine whether the transactions with associated enterprise were undertaken at "arms length
price". The management confirms that all domestic and international transactions with associated
enterprises are undertaken at negotiated contracted price on usual commercial terms and is
confident of there being no adjustment on completion of the study. Adjustment, if any, arising from
the transfer pricing study shall be accounted for as and when the study is completed.

45. During the previous year, the company had issued and allotted 6,900,000 equity shares with face
value of INR 2 each, at a premium of INR 1,083.54 each aggregating to INR 7,374.28 million (net of
issue expenses of INR 115.95 million) on a preferential basis to Gamnat Pte. Ltd. The issue was made in
accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations,
2018 (“’’SEBI ICDR Regulations””), as amended, the Companies Act, 2013, other applicable laws and
other requisite statutory and regulatory approvals. As at March 31, 2025 the Group has utilised INR
2,383.20 million towards purposes specified in the Offer document and the balance amount remains
invested in fixed and other deposits.

Further, during the current year the company has issued and allotted 248,250 equity shares with
face value of INR 2 each at a premium of INR 1,048.00 each (March 31, 2024: 39,000 equity shares
with face value of INR 2 each at a premium of INR 1,125.00 each) aggregating to INR 304.62 million to
ESOP trust on exercise of options under the ESOP scheme.

46. During the earlier years, the Company had completed Qualified Institutional Placement (“QIP”)
by issuing 1,153,845 equity shares aggregating to INR 5,906.90 million (net of QIP expenses of INR
93.09 million). As at March 31, 2025 the Company has utilised INR 4,872,47 million towards purposes
specified in the placement document and the balance amount of QIP''s net proceeds remains
invested in fixed and other deposits.

47. During the earlier years, investment in Talent Unlimited Online Services Private Limited (“Bobble”)
has been classified as held for sale vide the Board meeting held on May 14, 2022. Further, the Board
in its meeting held on May 24, 2024 decided to continue to classify the investment as held for sale.
The carrying value of the investments held for sale is INR 1,358.28 million for a 24.07% stake, on a fully
diluted basis.

Further, during the year the company has invested in 1 equity shares with face value of INR 10 each
with premium of INR 307,019 each and 25 0.001% Series D1 compulsorily convertible preference
shares (“Series D1 CCPS”) with face value of INR 100 each with premium of INR 306,929 each in Talent
Unlimited Online Services Private Limited.

Further, during the current year the Company has recognised expenses of INR Nil (March 31, 2024:
INR 24.08 million) as cost for services availed from Bobble.

49. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/reclassified wherever necessary, to conform to this year''s
classification and figure for the year ended March 31, 2025. The impact of regrouping/reclassification
is not material to the financials statement.

50. The financial statements were approved by board of directors on May 10, 2025.

51. The company does not have any post balance sheet date event to be reported.

As per our report of even date attach

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Affle 3i Limited (formerly known as “Affle (India) Limited”)

ICAI Firm''s Registration No.: CIN No: L65990DL1994PLC408172

001076N/N500013

Ashish Gupta Anuj Khanna Sohum

Partner Chairperson, Managing Director & Chief Executive Officer

Membership No: 504662 (DIN: 01363666)

Place: Gurugram Place: Singapore

Date: May 10, 2025 Date: May 10, 2025

Kapil Mohan Bhutani Parmita Choudhury

Chief Financial & Company Secretary

Operations Officer Membership No: 26261

Place: Gurugram Place: Gurugram

Date: May 10, 2025 Date: May 10, 2025

---

Mar 31, 2024

xviii) Provisions

Provisions are recognized 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. 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 recognized as a finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

xix) Contingent liabilities

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. Refer note 29 (b).

xx) Share based payments

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).

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 recognized, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the service conditions are fulfilled in employee benefits expense. The cumulative expense recognized 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 recognized as at the beginning and end of that period and is recognized in employee benefits expense.

Service 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 recognized for awards that do not ultimately vest because service conditions have not been met.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. 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.

xxi) Treasury shares

The ESOP trust has been treated as an extension of the company and accordingly shares held by ESOP trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted as assets and liabilities of the company, except for profit/loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Affle (India) limited employee welfare trust reserve.

xxii) Earnings per share

Basic earnings per share (EPS) are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted EPS amounts are calculated by dividing the profit or loss attributable to equity holders of the Company (after adjusting the corresponding income/ charge for dilutive potential equity shares) 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.

xxiii) Segment reporting

The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates the Company''s performance from a services perspective and has identified the ‘business ofproviding services in advertisement and software development'' as a single segment. As part for geographical segments, the company mainly operates in India only. The aforesaid is in line with review operating results by the CODM. As such, there is no separate reportable segments as per the requirement of IND AS 108-''operating Segments Reporting'' notified under the companies (India Accounting Standards) Rules,2015, as amended.

Identification of segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker(CODM). Only thosebusiness activities are identified as operating segment for which the operating results are regularly reviewed by the CODM to make decisions about resource allocation and performance measurement.

Inter-segment transfers

The Company generally accounts for intersegment sales and transfers at cost plus appropriate margins.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing

and presenting the financial statements of the Company as a whole.

xxiv) Recent Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

xxv) Use of Estimates, assumptions, Judgments and major sources of estimation uncertainty

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent liabilities and contingent assets as at the date of financial statements, income and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

Terms/rights attached to preference shares

*The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be convertible into equity shares of Affle X Private Limited after complying the provision of Companies Act, 2013 and the manner as specified in the subscription agreement. The Company does not have any voting rights in the invested entity except in case any resolution is passed. The holders shall have an option to redeem the only fully paid up Preference share having maximum redemption period of 20 years.

**The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be convertible into equity shares of Explurger Private Limited after complying the provision of Companies Act, 2013 and the manner as specified in the subscription agreement. The Company have voting right as agreed in Series A share subscription and shareholder agreement. series A CCPS are non-redeemable and compulsory convertible into equity share in the ratio of 1:1on completion of 19(Nineteen) year and 11 (eleven) month or as per series A share subscription and shareholder agreement.

***The Company has granted employees stock option to the eligible employees of wholly owned subsidiary and its subsidairies controlled through intermediate subsidairies. This has been treated as deemed investment in respective subsidiary by the Company as per guidance under IND AS.

8 (II) DEFERRED TAX

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relates to income taxes levied by the same tax authority.

I n assessing the realisibility of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the years in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level

(iii) Performance obligations

Information about the Company''s performance obligations are summarised below:

Consumer platform

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, shortterm advances are required before the advertisement services are provided.

As the duration of the contracts for consumer is less than one year, the Company has opted for practical expedient and decided not to disclose the amount of the remaining performance obligations.

Other operating revenue

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer.

Notes: There is no difference between the amount of revenue recognised in the profit and loss statement and the contract price.

26. EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the company by the weighted average number of equity shares outstanding during the year excluding treasury shares.

Diluted earning per share adjusts the figure used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive equity shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversio of all dilutive potential equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

27. EMPLOYEE BENEFITS

A. Defined contribution plans

Provident fund:

The Company makes contribution towards employees'' provident fund. The Company has recognised INR 10.99 million (March 31, 2023: INR 10.88 million) as an expense towards contribution to this plan.

B. Defined benefit plans

Gratuity:

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service with part thereof in excess of six months. The same is payable on termination of service or retirement or death whichever is earlier.

The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognised immediately in the other comprehensive income (OCI).

This is a unfunded benefit plan for qualifying employees. The scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and other comprehensive income and amounts recognised in the balance sheet for the gratuity plan:

29. COMMITMENTS AND CONTINGENT LIABILITIES

a. Capital commitments

As at March 31,2024, the Company has commitments on capital account and not provided for

(net of advances) of INR 8.64 million (March 31,2023: INR 9.78 million).

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts includes the following:

- Income tax demand from the Income tax authorities for assessment year 2017-18 of INR 64.88 million on account of disallowance of bad debts written off, advances written off, amortization of goodwill and certain expenses under various heads as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai. In response (dated January 29, 2020) to the notice company has discharged 20% of demand i.e. INR 13 million by depositing INR 6.50 million vide challan No 11922 with HDFC Bank on January 28, 2020 and adjusting a refund of INR 6.25 million which is outstanding for AY 2015-16 on which interest under section 244A of the Act is also pending and this will exceeds a residual amount of INR 6.50 million. "

- Income tax demand from the Income tax authorities order dated September 17, 2022, for assessment year 2020-21 of INR 1.13 million on account of disallowance of Corporate Social Responsibility (CSR) expenditure under section 80G of the Income Tax Act, 1961 of INR 2.15 million as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai.

- Income tax demand from the Income tax authorities order dated October 10, 2023 for assessment year 2021-22 of INR 31.7 million on the ground that documentation not provided. Mumbai High court has stayed the demand in the Order on May 7, 2024.

The Company is contesting the demands and the management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The likelihood of the above cases going in favour of the Company is probable and accordingly has not considered any provision against the demands in the financial statements.

(ii) (a) The opening balance of Stand by Letter of Credit (SBLC) as on April 01 ,2023 is amounting

to INR 699.72 million (equivalent to USD 10.11 million) was taken in favour of Axis Bank Limited, Singapore. An addition amounting to INR 1,886 million (USD 23 million) is done during the current year. Further during the current year it is reduced by INR 231.46 million (equivalent to USD 3.11 million). The outstanding closing balance of SBLC in favour of Axis Bank Limited, Singapore is INR 2,354.26 million (equivalent to USD 30 million).

(b) The opening balance of Stand by Letter of Credit (SBLC) as on April 01 , 2023 is amounting to INR 439.68 million (equivalent of USD 6.00 million) was taken in favour of HDFC Bank Limited, Bahrain. The outstanding closing balance of SBLC in favour of HDFC Bank Limited, Bahrain is INR 439.68 million (equivalent to USD 6 million).

Terms and conditions of transactions with related parties

The sale and purchase from related parties are made on terms equivalent to those that prevail in arm''s length transaction. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2024 and year ended March 31, 2023, the Company has not recorded any impairment of trade receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

31. SEGMENT INFORMATION

(a) The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates the Company''s performance from a services perspective and has identified the ‘business of providing services in advertisement and software development'' as a single segment. As part for geographical segments, the company mainly operates in India only. The aforesaid is in line with

33. FAIR VALUE HIERARCHY

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

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

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

The cost of unquoted investment included in level 3 of fair value hierarchy approximate their face value because there is a wide range of possible fair value measurement and the cost represents estimate of fair value within that range

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

Valuation technique used to derive fair values

The Company''s unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprises trade payables, other payables, capital creditors and employee related payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalent that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is responsible to ensure that Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

a. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of a change in market price.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company does not use derivative financial instruments such as forward exchange contracts or options to hedge its risk associated with foreign currency fluctuations or for trading/speculation purpose.

The amount of foreign currency exposure not hedged by derivative instruments or otherwise is as under:

b. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions.

A counterparty whose payment is due more than 90 days after the due date is considered as a defaulted party. This is based on considering the market and economic forces in which the Company operates. The Company write-off the amount if the credit risk of counter-party increases significantly due to its poor financial position.

All the financial assets carried at amortised cost were into good category except some portion of trade receivables considered under doubtful category (refer note 10).

Trade receivables and contract assets

Trade receivables are typically unsecured. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Other financial assets

Other financial assets are considered to have low credit risk since there is a low risk of default by the counterparties owing to their strong capacity to meet contractual cash flow obligations in the near term. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

The Company is exposed to credit risk in the event of non-payment by customers. An impairment analysis is performed at each reporting date. The Company uses a provision matrix to measure the expected credit loss of trade receivables.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s finance committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company monitors their risk of shortage of funds using cash flow forecasting models. These models consider the maturity of their financial investments, committed funding and projected cash flows from operations. The Company''s objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner.

A balance between continuity of funding and flexibility is maintained through the use of borrowings. The Company also monitors compliance with its debt covenants. The maturity profile of the Company''s financial liabilities based on contractual undiscounted payments is given in the table below:

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company''s policy is to keep the gearing ratio between 0% and 10%.

35. CAPITAL MANAGEMENT

The Board''s policy maintains a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the amount of dividend if any to shareholders.

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at March 31,2024 and March 31,2023, the Company has only one class of equity shares and has no debt. Consequent to such capital structure, there are no externally imposed capital requirements.

36. IMPAIRMENT TESTING OF GOODWILL

Goodwill acquired through business combinations have indefinite life. The Company performs the impairment testing at the initial recognition of Goodwill. The Company further performs impairment testing as and when the indicators arise. At present there is no indicator for impairment of Goodwill. The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.

The recoverable amount of the goodwill is determined based on value in use (‘VIU'') calculated using cash flow projections from financial budgets approved by management covering a five year period and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has used long-term growth rate of 10% (March 31, 2023: 5%) and discount rate of 11.70% (March 31,2023: 10%) for calculation of terminal value.

The said cash flow projections are based on the senior management past experience as well as expected met trends for the future periods. The projected cash flows have been updated to reflect the decreased demand for services. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the Company. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows. The Company considers the consumer platform stack as a single CGU for the purpose of impairment testing of goodwill.

Discount rates represent the market assessment of the risks, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments and is derived from its WACC.

The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate. Revenue and EBITDA growths are based on average value achieved in preceding years. Also, the growth rates used to extrapolate the cash flows beyond the forecast period are based on industry standards.

Based on the above assumptions and analysis, no impairment was identified as at March 31, 2024 (March 31, 2023: Nil). Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions/parameters on which the management has based determination of the recoverable amount, there are no scenarios identified by the management wherein the carrying value could exceed its recoverable amount.

37. EMPLOYEE SHARE BASED PAYMENT

During the year ended March 31,2022, the Company has issued Employee Stock Option Scheme -2021”. The relevant details of the scheme and the grant are as follows:

Scheme: Affle (India) Limited Employee Stock Option Scheme - 2021

a) The Company instituted an Employees Stock Option Scheme (“ESOPs”) for certain employees of the Company, its subsidiary and its step down subsidiaries (together know as Group) as approved by the shareholders on September 23, 2021 which provides for a grant of 3,750,000 options (each option convertible into share) to employees of the Group.

During the year ended March 31,2024 the Company has further granted 189,420 options to the eligible employees on December 11, 2023 as approved by the nomination and remuneration committee of the Company.

39. OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company have balance with the below-mentioned company struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Cryptocurrency transactions / balances or Virtual Currency during the financial year ended March 31,2024 and March 31, 2023.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (ultimate beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the group shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (ultimate beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(vii) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(viii) The Company has not been declared as willful defaulter by any bank or financial institution or other lender.

(ix) The Company has taken loan facility from bank but not utlised in the current year or previous year.

(x) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year

(xi) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year

(xii) The Company has not owned any immovable property.

(xiii) The Company has complied with the number of layers prescribed under the companies Act, 2013, read with the companies (Restriction on number of layers) Rules, 2017.

(xiv) The Company has not owned any immovable property. All the properties where the company is the lessee, the lease agreements are duly executed in the favour of lessee.

(xv) Disclosure as per section 186 of Companies Act 2013 The details of loans, guarantees and investments under section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

(a) Details of loan given by the company and guarantees issued as at March 31, 2024 and March 31,2023 refer note 30.

40. 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. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

41. The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company has used an accounting software which is operated by a third party service provider for maintenance of books of accounts. The Company has obtained the ‘Independent Service Auditor''s Assurance Report on Controls relevant to Security, Availability and Confidentiality (‘Type 2 report'' issued in accordance with ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information) issued by the International Auditing and Assurance Standards Board for the year ended March 31,2024. The accounting software is used in form of software-as-a-service; and SOC 2 report does not provide information on availability of audit trail at database level.

42. The Company has appointed independent consultants for conducting a transfer pricing study to determine whether the transactions with associated enterprise were undertaken at "arms length price". The management confirms that all domestic and international transactions with associated enterprises are undertaken at negotiated contracted price on usual commercial terms and is confident of there being no adjustment on completion of the study. Adjustment, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed.

43. 43. During the year, the Group had issued and allotted 69,00,000 equity shares with face value of INR 2 each, at a premium of INR 1,083.54 each aggregating to INR 7,380.28 million (net of issue expenses of INR 109.95 million) on a preferential basis to Gamnat Pte. Ltd. The issue was made in accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”), as amended, the Companies Act, 2013, other applicable laws and other requisite statutory and regulatory approvals. As at March 31,2024 the Group has utilised INR 1,483.38 million towards purposes specified in the Offer document and the balance amount remains invested in fixed and other deposits.

Further, the Group has issued and allotted 58,000 equity shares with face value of INR 2 each, at a premium of INR 1,048.00 each aggregating to INR 60.90 million to ESOP trust on exercise of options under the ESOP scheme.

44. During the earlier year, the Company had completed Qualified Institutional Placement (“QIP”) by issuing 1,153,845 equity shares aggregating to INR 5,906.90 million (net of QIP expenses of INR 93.09 million). As at March 31,2024 the Company has utilised INR 3,517.51 million towards purposes specified in the placement document and the balance amount of QIP''s net proceeds remains invested in fixed and other deposits.

45. During the earlier years, Company had made a strategic, non-controlling investment in Talent Unlimited Online Services Private Limited (“Bobble”). The Company in its Board meeting held on May 14, 2022; had authorized the management to either divest or invest further in Bobble. Accordingly, the management had decided to and continues to classify the investment in Bobble as held for sale in accordance with Ind AS 105. The carrying value of the investment is INR 1,350.29 million for a 24.07% stake, on a fully diluted basis.

Further, during the current year the Company has recognised expenses of INR 24.08 million (March 31,2023: INR 75.45 million) as cost for services availed from Bobble.

47. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/reclassified wherever necessary, to confirm to this year''s classification and figure for the year ended March 31,2024. The impact of regrouping/reclassification is not material to the financial statement

48. The financial statements were approved by board of directors on May 24, 2024

49. The company does not have any post balance sheet date event to be reported.

As per our report of even date attach

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Affle (India) Limited

ICAI Firm''s Registration CIN No: L65990DL1994PLC408172

No.: 001076N/N500013

Ashish Gupta Anuj Khanna Sohum Vipul Kedia

Partner Managing Director & Executive Director

Membership No: 504662 Chief Executive Officer (DIN: 08234884)

Place: New Delhi (DIN: 01363666) Place: Gurugram

Date: May 24, 2024 Place: Singapore Date: May 24, 2024

Date: May 24, 2024

Kapil Mohan Bhutani Parmita Choudhury

Chief Financial & Operations Officer Company Secretary

Place: Gurugram Membership No: 26261

Date: May 24, 2024 Place: Gurugram

Date: May 24, 2024

---

Mar 31, 2023

Terms/rights attached to preference shares

*The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be convertible into equity shares of Affle X Private Limited after complying the provision of Companies Act, 2013 and the manner as specified in the subscription agreement. The Company does not have any voting rights in the invested entity except in case any resolution is passed. The holders shall have an option to redeem the only fully paid up Preference share having maximum redemption period of 20 years.

**The Company has granted employees stock option to the selected employees of its direct subsidiaries and step down subsidiary. This has been treated as deemed investent in respective subsidiary by the Company as per guidance under IND AS.

*During the previous year, the Company had increased its stake into Talent Unlimited Online Services Private Limited (“Bobble”), as a result investment in Talent Unlimited Online Services Private Limited was being converted into investment in associates under Note 5(b) (also refer note 45).

In the current year, the board of directors had authorized the management to either divest or invest further in Bobble. Accordingly, the management had decided to classify the investment in Bobble as held for sale in accordance with Ind AS 105 considering a possibility of divestment. The investment is disclosed as an investment held for sale as at March 31, 2023. The Company holds 26.24% stake on fully diluted basis in Bobble.

Terms/rights attached to preference shares

**Each Series C CCPS shall be converted by the Company into 1 equity share at the rate of INR 10 (Indian Rupees Ten only) per share after 20 years from the date of issuance of the Series C CCPS. It carries a noncumulative dividend rate of 0.1% (Zero Point One Percent) per annum. The Series C CCPS may not be redeemed by the Company for cash.

*Security deposits primarily include deposits given towards rented premises and other miscellaneous deposits. It represents fair value of amount paid to landlord for the leases premises. As at March 31, 2023, remaining tenure for security deposits ranges from one to five years.

“Includes the following:

- amount recoverable from related parties of INR 1.09 million (March 31, 2022: INR 0.95 million) pertaining to reimbursement of expenses not yet billed as at the year end.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relates to income taxes levied by the same tax authority.

In assessing the realisibility of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the years in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the years in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.

3) During the period ended March 31, 2023 & March 31, 2022; there were no balances of trade receivables with a significant increase in credit risk.

Contract assets

As at March 31, 2023, the Company has contract assets of INR 502.82 million (March 31, 2022: INR 410.54 million) which is net of an allowance for expected credit losses of INR 5.27 million (March 31, 2022: INR 4.56 million).

4) No trade or other receivables are due from directors or any other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

*Balances with banks on current accounts includes balance in cash credit facility account amounting to Nil (March 31, 2022: Nil). The cash credit facility in the year ended March 31, 2023 is secured by hypothecation of fixed & current assets of the Company including other intangible assets. The rate of interest to be charged on the utilisation of the facility amount is 6M MCLR 1.10% (presently 9.00% p.a.) payable at monthly intervals. The amount utilised is payable on demand and the tenure of the cash credit limit is one year from the date of sanction.

**Short-term deposits are made for varying periods of between one date and three months depending on the cash requirements of the company. Company also earns an interest on these short-term deposits at the rate ranging from 3% to 7.50%.

*Pursuant to the approval of the shareholders in its annual general meeting held on October 23, 2021, each equity share of face value of INR 10 per share have been subdivided into five equity shares of face value of INR 2 per share, with effect from October 08, 2021.

B. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 2 per share. The holders of equity shares are entitled to receive dividends and are entitled to one vote per share. In the event of liquidation, equity shareholders will be entitled to receive assets of the Company in proportion to the number of shares held to the total equity shares outstanding as on that date.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date is Nil.

Nature and purpose of other equity Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include remeasurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

Securities premium

Securities premium represents the amount received in excess of par value of equity shares. Section 52 of Companies Act, 2013 specifies restriction and utilisation of security premium.

Share based payment reserve

The share options-based payment reserve is used to recognise the grant date fair value of options issued to employees under employee stock option plan.

Treasury shares (Shares held by the ESOP Trust)

The Company has created an Employee Benefit Trust (EBT) for providing share-based payment to its employees. The Company uses EBT as a vehicle for distributing shares to employees under the employee remuneration schemes. The EBT buys shares of the company from the market, for giving shares to employees. The Company treats EBT as its extension and shares held by EBT are treated as treasury shares. Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity.

iii. Performance obligations

Information about the Company''s performance obligations are summarised below:

Consumer platform

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, short-term advances are required before the advertisement services are provided.

Enterprise platform

The performance obligation is satisfied over time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, short-term advances are required before the software development services are provided.

As the duration of the contracts for consumer and enterprise platform is less than one year, the Company has opted for practical expedient and decided not to disclose the amount of the remaining performance obligations.

Other operating revenue

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer.

Notes:

There is no difference between the amount of revenue recognised in the profit and loss statement and the contract price.

26. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted EPS, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

*The weighted average number of equity shares for the year ended March 31, 2023 takes into account the weighted average effect of equity shares issued during the year.

27 Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Group''s exposure to risks and uncertainties includes:

- Capital Management, refer note 36

- Financial risk management objectives and policies, refer note 35

- Sensitivity analysis, refer note 28, note 35

Judgements

In the process of applying the Company''s accounting policies, management has not made any significant judgement, which have the most significant effect on the amounts recognised in the financial statements.

a. Investment in Bobblei. Investment as associates

During the previous year, w.e.f. January 1, 2022, the Company had received a right to appoint its nominee as a director on the Board of Bobble, which was duly exercised. Given the shareholding of 17% on such date and board seat, the Company had considered Bobble as an associate over which it was deemed to have significant influence.

ii. Classified as investment held for sale

During the current year, the Company in its board meeting, had authorized the management to either divest or invest further in Bobble. Accordingly, the management had decided to classify the investment in Bobble as held for sale in accordance with Ind AS 105 considering a possibility of divestment. The investment is disclosed as an investment held for sale as at March 31, 2023. The Company holds 26.24% stake on fully diluted basis in Bobble.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a. Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (“CGU”) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company has not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by the Company. Refer note 38 for further disclosures.

b. Provision for expected credit losses of trade receivables and contract assets

Trade receivables and contract assets do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing of the receivable balances and historical experience adjusted for forward-looking estimates. Individual trade receivables are written off when management deems them not to be collectible. For details of allowance for doubtful debts please refer note 10.

c. Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India. Further details about gratuity obligations are given in note 28.

d. Intangible assets under development

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. At March 31, 2023, the carrying amount of capitalised intangible asset under development was INR 5.17 million (March 31, 2022: INR 35.15 million).

This amount includes significant investment in the development of platforms.

e. Fair value measurement of derivative instruments

During the previous year, the Company used valuation techniques including the DCF model for the fair valuation of derivative instruments recorded in the balance sheet. The inputs to these models were taken from observable markets where possible, but where this was not feasible, a degree of judgement was required in establishing fair values. Judgements included considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of derivative instruments.

f. Leases- estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available.

g. Share based payment

The Company measures the cost of equity-settled transactions with employees using Black Scholes pricing model to determine the fair value on the grant date. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 39.

28. Employee benefitsA. Defined contribution plans

Provident fund: The Company makes contribution towards employees'' provident fund. The Company has recognised INR 12.08 million (March 31, 2022: INR 12.61 million) as an expense towards contribution to this plan.

B. Defined benefit plans

Gratuity: The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service with part thereof in excess of six months. The same is payable on termination of service or retirement or death whichever is earlier.

The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognised immediately in the other comprehensive income (OCI).

This is a unfunded benefit plan for qualifying employees. The scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and other comprehensive income and amounts recognised in the balance sheet for the gratuity plan:

The average duration of the defined benefit plan obligation at the end of the reporting year is 1.91 years (March 31, 2022: 2.31 years).

29. Leases

The discount rate is based on the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligations. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Company as lessee

The Company has taken office premises on lease. The lease has been entered for a period ranging from one to two years with renewal option. The Company has the option, under some of its lease, to renew the lease for an additional years on a mutual consent basis.

The incremental borrowing rate for the lease liabilities is 9% per annum.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

The sensitivity analysis above have been determined based on a method that extrapolates the impact on define benefit obligation as a result of reasonable changes in key assumptions occurring at the end of reporting year. The sensitivity analysis are based on a change in a significant assumption, keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

Note: During the previous year ended March 31, 2022, the Company has served termination notice to vacate the premise and accordingly written off right of use asset and the lease liability.

30. Commitments and contingent liabilitiesa. Capital commitments

As at March 31, 2023, the Company has commitments on capital account and not provided for (net of advances) of INR 9.78 million (March 31, 2022: INR 8.08 million).

b. Contingent liabilities

i. Claims against the Company not acknowledged as debts includes the following:

- Income tax demand from the Income tax authorities for assessment year 2017-18 of INR 64.88 million on account of disallowance of bad debts written off, advances written off, amortization of goodwill and certain expenses under various heads as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai. In response (dated 29th January''2020) to the notice company has discharged 20% of demand i.e. INR 13 million by depositing INR 6.50 million vide challan No 11922 with HDFC Bank on January 28, 2020 and adjusting a refund of INR 6.25 million which is outstanding for AY 2015-16 on which interest under section 244A of the Act is also pending and this will exceeds a residual amount of INR 6.50 million.

- Income tax demand from the Income tax authorities order dated September 17, 2022, for assessment year 2020-21 of INR 1.13 million on account of disallowance of Corporate Social Responsibility (CSR) expenditure under section 80G of the Income Tax Act, 1961 of Rs. 2.15 million as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai.

The Company is contesting the demands and the management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The likelihood of the above cases going in favour of the Company is probable and accordingly has not considered any provision against the demands in the financial statements.

ii. (a) The opening balance of Stand by Letter of Credit (SBLC) as on April 01,2022 is amounting to INR 447.01 million(equivalentofUSD6.10million)wastakeninfavourofAxisBankLimited,Singapore.Duringthecurrent year it is reduced by INR 100.26 million (equivalent to USD 1.22 million). The outstanding closing balance of SBLC in favour of Axis Bank Limited, Singapore is INR 346.75 million (equivalent to USD 4.88 million).

(b) The opening balance of Stand by Letter of Credit (SBLC) as on April 01,2022 is amounting to INR 629.83 million (equivalent of USD 8.60 million) was taken in favour of Axis Bank Limited, Singapore. During the current year it is reduced by INR 276.86 million (equivalent to USD 3.37 million). The outstanding closing balance of SBLC in favour of Axis Bank Limited, Singapore is INR 352.97 million (equivalent to USD 5.23 million).

(c) The opening balance of Stand by Letter of Credit (SBLC) as on April 01, 2022 is amounting to INR 439.68 million (equivalent of USD 6.00 million) was taken in favour of HDFC Bank Limited, Bahrain. The outstanding closing balance of SBLC in favour of HDFC Bank Limited, Bahrain is INR 439.68 million (equivalent to USD 6.00 million).

No amount has been written off or written back in the year in respect of debts due from/to above related parties.

Terms and conditions of transactions with related parties

The sale and purchase from related parties are made on terms equivalent to those that prevail in arm''s length transaction. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. For the period ended March 31, 2023 and year ended March 31, 2022, the Company has not recorded any impairment of trade receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

32. Segment information

Ind AS 108 establishes standards for the way that companies report information about operating segments and related disclosures about products and services, geographic areas, and major customers.

The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates the Company''s performance and allocates resources based on analysis of various performance indicators pertaining to advertisement and software development segment.

The “Consumer platform” segment provides mobile advertisement services to its customers and is a reseller of advertisement space for online publishing companies including right to use of the platform.

The “Enterprise platform” segment provides customized mobile app development services.

Transfer pricing is carried between the operating segments are set at cost plus appropriate margins. Segment revenue, segment expenses and segment result include transfers between operating segments. Those transfers are eliminated in total revenue/expense/result.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in segment information, and are as set out in the significant accounting policies.

The Company had one customer who contributed more than 10% of the Company''s revenue from contracts with customers for the year ended March 31, 2023, however for the year ended March 31, 2022 there is no such customer. The total amount of revenue from contracts with this customer for the year ended March 31, 2023 is 552.84 (March 31, 2022: INR NIL).

The management assessed that cash and cash equivalent, other bank balances, trade receivables, capital creditors, trade payables and other financial liabilities approximate their carrying amounts and fair value of the Company''s financial instuments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Further, the subsequent measurements of all assets and liabilities (other than investments) is at amortised cost, using effective interest rate (EIR) method.

The following methods and assumptions were used to estimate the fair values:

Receivables are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

34. Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

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

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

Valuation technique used to derive fair values

The Company''s unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

35. Financial risk management objectives and policies

The Company''s principal financial liabilities comprises trade payables, other payables, capital creditors and employee related payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalent that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is responsible to ensure that Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of a change in market price.

i. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company does not use derivative financial instruments such as forward exchange contracts or options to hedge its risk associated with foreign currency fluctuations or for trading/speculation purpose.

b. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions.

A counterparty whose payment is due more than 90 days after the due date is considered as a defaulted party. This is based on considering the market and economic forces in which the Company operates. The

Company write-off the amount if the credit risk of counter-party increases significantly due to its poor financial position.

All the financial assets carried at amortised cost were into good category except some portion of trade receivables considered under doubtful category (refer note 10).

Trade receivables and contract assets

Trade receivables are typically unsecured. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company is exposed to credit risk in the event of non-payment by customers. An impairment analysis is performed at each reporting date. The Company uses a provision matrix to measure the expected credit loss of trade receivables.

None of those trade receivable past due or impaired have had their terms renegotiated. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables presented in the financial statement. The Company does not hold any collateral or other credit enhancements over balances with third parties nor does it have a legal right of offset against any amounts owed by the Company to the counterparty. For receivables which are overdue the Company has subsequently received payments and has reduced its overdue exposure.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s finance committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company monitors their risk of shortage of funds using cash flow forecasting models. These models consider the maturity of their financial investments, committed funding and projected cash flows from operations. The Company''s objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner.

36. Capital management

The Board''s policy maintains a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the amount of dividend if any to shareholders.

For the purpose of the Company''s capital management, capital includes issued equity capital and general reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

38. Business combination

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company''s policy is to keep the gearing ratio between 0% and 30%.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year.

38.1 Business combinations under common control Scheme of amalgamation in accordance with previous GAAP

During the year ended March 31, 2017, the Holding Company has merged its fellow subsidiaries i.e. AD2C Holdings, AD2C India, Appstudioz Technologies into one merged entity, Affle India Limited (formerly known as “Affle (India) Private Limited”) under the court approved scheme of amalgamation in accordance with erstwhile applicable previous GAAP.

Business combination under common control has been accounted for using purchase method in accordance with previous GAAP as prescribed under court scheme instead of using pooling interest method as prescribed under Ind AS 103. Business Combinations as the approved court scheme will prevail over applicable accounting standard.

Accordingly, the Scheme was accounted for using purchase method in accordance with erstwhile applicable Accounting Standard 14 “Accounting for Amalgamations”. All the assets and liabilities of the Transferor Companies have been incorporated at fair values as at 1 April 2015 against the purchase consideration of INR 84.64 million which resulted in the Goodwill on amalgamation of amounting INR 59.24 million.

Goodwill acquired through business combinations have indefinite life. The Company performed its impairment test for the year ended March 31, 2023.

38.2 Impairment testing of goodwill

Goodwill acquired through business combinations have indefinite life. The Company performs the impairment testing at the initial recognition of Godwill. The Company further performs impairment testing at every year end. At present there is no indcator for impairment of Goodwill. The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.

The recoverable amount of the goodwill is determined based on value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a five year period and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has used long-term growth rate of 5% (March 31, 2022: 2%) and discount rate of 10% (March 31, 2022: 10%) for calculation of terminal value.

The said cash flow projections are based on the senior management past experience as well as expected met trends for the future periods. The projected cash flows have been updated to reflect the decreased demand for services. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the Company. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.

Discount rates represent the market assessment of the risks specific to Cash generating unit (CGU), taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments and is derived from its WACC.

The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate. Revenue and EBITDA growths are based on average value achieved in preceding years. Also, the growth rates used to extrapolate the cash flows beyond the forecast period are based on industry standards.

Based on the above assumptions and analysis, no impairment was identified as at March 31, 2023 (March 31, 2022: Nil). Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions/parameters on which the management has based determination of the recoverable amount, there are no scenarios identified by the management wherein the carrying value could exceed its recoverable amount.

39. Employee share based payment

During the previous year ended March 31, 2022, the Company has issued Employee Stock Option Scheme -2021. The relevant details of the scheme and the grant are as follows:

Scheme: Affle (India) Limited Employee Stock Option Scheme - 2021

a. The Company instituted an Employees Stock Option Scheme (“ESOPs”) for certain employees of the Company, its subsidiary and its step down subsidiaries (together know as Group) as approved by the shareholders on October 23, 2021 which provides for a grant of 3,750,000 options (each option convertible into share) to employees of the Group.

During the year ended March 31, 2023 the Company has further granted 25,057 options to the eligible employees on March 23, 2023 as approved by the nomination and remuneration committee of the Company.

40. Capitalisation of intangible assets

The Company has capitalized the following expenses of revenue nature to the internally developed software. Consequently, the expenses disclosed under the respective heads are net of amounts capitalised by the Company.

41. Other statutory information

i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

ii. The Company has balance with the below-mentioned company struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv. The Company has not traded or invested in Cryptocurrency transactions / balances or Virtual Currency during the financial year ended March 31, 2023 and March 31, 2022.

v. The Company have not advanced or loaned or invested funds to Intermediaries for further advancing to any other person(s) or entity(ies), including foreign entities (Intermediaries).

vi. The Company has not received any funds or further advances in form of any fund from any person(s) or entity(ies), including guarantee to the Ultimate beneficiaries.

42. 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. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

43. The Company has appointed independent consultants for conducting a Transfer pricing study to determine whether the transactions with associated enterprise were undertaken at “arm length price”. The management confirms that all domestic and international transactions with associated enterprises are undertaken at negotiated contracted price on usual commercial terms and is confident of there being no adjustment on completion of the study. Adjustment, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed.

44. During the previous year, the Company had completed Qualified Institutional Placement (“QIP”) by issuing 1,153,845 equity shares aggregating to INR 5,906.90 million (net of QIP expenses of INR 93.09 million). As at March 31, 2023 the Company has utilised INR 2,524.25 million towards purposes specified in the placement document and the balance amount of QIP''s net proceeds remains invested in fixed and other deposits.

45. During the earlier years, Company had made a strategic, non-controlling investment in Talent Unlimited Online Services Private Limited (“Bobble”). The Company had received a right to appoint its nominee as a director on the board of Bobble, effective January 01, 2022, which was duly exercised. Given the shareholding and board seat, the Company had considered Bobble as an associate. As at March 31, 2023, the carrying value of investment in Bobble of INR 1,350.29 million was shown as the deemed cost of investment.

The Company in its board meeting; had authorized the management to either divest or invest further in Bobble. Accordingly, the management has classified the investment in Bobble as held for sale in accordance with Ind AS 105 considering a possibility of divestment. The investment continues to be disclosed as an investment held for sale as at March 31, 2023. The Company holds 26.24% stake on fully diluted basis in Bobble.

46. The Finance Act, 2021 has introduced an amendment to section 32 of the Income Tax Act, 1961, whereby Goodwill of a business will not be considered as a depreciable asset and depreciation on goodwill will not be allowed as deductible expenditure effective April 1, 2020. In accordance with the requirements of Ind AS 12 - Income Taxes, the Company has recognised one-time tax expense amounting to INR 14.18 million for the year ended March 31, 2021 respectively being the deferred tax liabilities recognized by the Company on difference between book basis and tax basis of goodwill consequent upon enactment of above provisions. This deferred tax liability is not expected to be a cash outflow in the future and its reversal is deemed unlikely as the value of its associated goodwill is expected by value in use.

*During the current year, investment in Bobble (associate) has been classified as held for sale and hence not considered for retrun on Investment in an associate ratio. Further, during the previous year ended March 31, 2022, the Company has increased its stake into Bobble, as a result investment in Bobble is being converted into investment in associates (refer note 46).

Note 1: T1 = end of time period, T0 = beginning of time period, t = specific date falling between T1 and T0, MV(T1) = market Value at T1, MV(T0) = market Value at T0, C(t) = cash inflow, cash outflow on specific date, W(t) = weight of the net cash flow (i.e. either net inflow or net outflow) on day ''t'', calculated as [T1 - t] / T1. Note 2: Debt service = Interest & Lease Payments Principal Repayments Note 3: Net credit sales consist of gross credit sales minus sales return.

Note 4: Net credit purchases consist of gross credit purchases minus purchase return.

Note 5: Net sales shall be calculated as total sales minus sales returns.

Note 6: Working capital shall be calculated as current assets minus current liabilities.

Note 7: Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability

Note 8: T1 = End of time period, T0 = Beginning of time period, t = Specific date falling between T1 and T0, MV(T1) = Market Value at T1, MV(T0) = Market Value at T0, C(t) = Cash inflow, cash outflow on specific date, W(t) = Weight of the net cash flow (i.e. either net inflow or net outflow) on day ''t'', calculated as [T1 - t] / T1.

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Mar 31, 2022

*During the year ended March 31, 2022, the Company has increased its stake into Talent Unlimited Online Services Private Limited, as a result investment in Talent Unlimited Online Services Private Limited is being converted into investment in associates under Note 5(b) (also refer note 46).

Terms/rights attached to preference shares

*Each Series C CCPS shall be converted by the Company into 1 equity share at the rate of INR 10 (Indian Rupees ten only) per share after 20 years from the date of issuance of the Series C CCPS. It carries a noncumulative dividend rate of 0.1% (Zero Point One Percent) per annum. The Series C CCPS may not be redeemed by the Company for cash.

**The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be convertible into equity shares of Affle X Private Limited after complying the provision of Companies Act, 2013 and the manner as specified in the subscription agreement. The Company does not have any voting rights in the invested entity except in case any resolution is passed. The holders shall have an option to redeem the only fully paid up Preference share having maximum redemption period of 20 years.

***The company has granted employees stock option to the selected employees of its direct subsidiaries and step down subsidiary. This has been treated as deemed investent in respective subsidiary by the company as per guidance under IND AS.

*Security deposits primarily include deposits given towards rented premises and other miscellaneous deposits. It represents fair value of amount paid to landlord for the leases premises. As at March 31, 2022, remaining tenure for security deposits ranges from one to nine years.

“Includes the following:

amount recoverable from related parties of INR 0.95 million (March 31, 2021: INR 8.81 million) pertaining to reimbursement of expenses not yet billed as at the year end. - qualified institutional placement expenses of NIL (March 31, 2021: INR 8.97 million).

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relates to income taxes levied by the same tax authority.

In assessing the realisability of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the years in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the years in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.

3) During the year ended March 31, 2022 & March 31, 2021; there were no balances of trade receivables with a significant increase in credit risk.

Contract assets

As at March 31, 2022, the Company has contract assets of INR 410.54 million (March 31, 2021: INR 288.50 million) which is net of an allowance for expected credit losses of INR 4.56 million (March 31, 2021: INR 2.39 million).

4) No trade or other receivables are due from directors or any other officers of the company either severally or jointly with any other person. No any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

*Balances with banks on current accounts includes balance in cash credit facility account amounting to Nil (March 31, 2021: Nil). The cash credit facility in the year ended March 31, 2022 is secured by hypothecation of fixed & current assets of the Company including other intangible assets. The rate of interest to be charged on the utilisation of the facility amount is 6M MCLR 1.10% (presently 8.80% p.a.) payable at monthly intervals. The amount utilised is payable on demand and the tenure of the cash credit limit is one year from the date of sanction.

**Short-term deposits are made for varying periods of between one and three months depending on the cash requirements of the company. Company also earns an interest on these short-term deposits at the rate ranging from 3% to 6%.

*Pursuant to the approval of the shareholders in its annual general meeting held on September 23, 2021, each equity share of face value of INR 10 per share have been subdivided into five equity shares of face value of INR 2 per share, with effect from October 08, 2021.

B. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 2 per share. The holders of equity shares are entitled to receive dividends and are entitled to one vote per share. In the event of liquidation, equity shareholders will be entitled to receive assets of the Company in proportion to the number of shares held to the total equity shares outstanding as on that date.

C. Shares held by holding company and/or their subsidiaries

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date is Nil.

Nature and purpose of other equity Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include remeasurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

Securities premium

Securities premium represents the amount received in excess of par value of equity shares. Section 52 of Companies Act, 2013 specifies restriction and utilisation of security premium.

Share based payment reserve

The share options-based payment reserve is used to recognise the grant date fair value of options issued to employees under employee stock option plan.

iii. Performance obligations

Information about the Company''s performance obligations are summarised below:

Consumer platform

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, short-term advances are required before the advertisement services are provided.

Enterprise platform

The performance obligation is satisfied over time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, short-term advances are required before the software development services are provided.

As the duration of the contracts for consumer and enterprise platform is less than one year, the Company has opted for practical expedient and decided not to disclose the amount of the remaining performance obligations.

Other operating revenue

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer.

Notes:

There is no difference between the amount of revenue recognised in the statement of profit and loss and the contract price.

26.Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted EPS, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

27Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

- Capital Management, refer note 36

- Financial risk management objectives and policies, refer note 35

- Sensitivity analysis, refer note 28, note 35

Judgements

In the process of applying the Company''s accounting policies, management has not made any significant judgement, which have the most significant effect on the amounts recognised in the financial statements.

a. Investment in associates

Effective January 1, 2022, the Company received a right to appoint its nominee as a director on the Board of Bobble, which was duly exercised. Given the shareholding of 17% on such date and board seat, the Company has considered Bobble as an associate over which it is deemed to have significant influence.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a. Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (“CGU”) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company has not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by the Company. Refer note 38 for further disclosures.

b. Provision for expected credit losses of trade receivables and contract assets

Trade receivables and contract assets do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing of the receivable balances and historical experience adjusted for forward-looking estimates. Individual trade receivables are written off when management deems them not to be collectible. For details of allowance for doubtful debts please refer note 10.

c. Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India. Further details about gratuity obligations are given in note 28.

d. Intangible assets under development

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. At March 31, 2022, the carrying amount of capitalised intangible asset under development was INR 35.15 million (March 31, 2021: INR 87.24 million).

This amount includes significant investment in the development of platforms.

e. Fair value measurement of derivative instruments

The Company uses valuation techniques including the DCF model for the fair valuation of derivative instruments recorded in the balance sheet. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of derivative instruments. See note 46 for further details.

f. Leases- estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available.

g Share based payment

The Company measures the cost of equity-settled transactions with employees using Black Scholes pricing model to determine the fair value on the grant date. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 39.

28.Employee benefitsA. Defined contribution plans

Provident fund: The Company makes contribution towards employees'' provident fund. The Company has recognised INR 12.61 million (March 31, 2021: INR 9.91 million) as an expense towards contribution to this plan.

B. Defined benefit plans

Gratuity: The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service with part thereof in excess of six months. The same is payable on termination of service or retirement or death whichever is earlier.

The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognised immediately in the other comprehensive income (OCI).

This is a unfunded benefit plan for qualifying employees. The scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and other comprehensive income and amounts recognised in the balance sheet for the gratuity plan:

The discount rate is based on the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligations. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on define benefit obligation as a result of reasonable changes in key assumptions occurring at the end of reporting year. The sensitivity analysis are based on a change in a significant assumption, keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

Note: The Company has applied practical expedient in Indian Accounting Standard (Ind AS 116) notified vide Companies (Indian Accounting Standards) Amendment Rules, 2020 by Ministry of Corporate Affairs (''MCA'') on July 24, 2020 to all rent rebate received as a direct consequence of COVID-19 pandemic. Accordingly, the Company recognized an amount of Nil (March 31, 2021: INR 4.78 million) as other income. The Company has further got rent waivers for other premises taken on lease and it has resulted in cost saving of Nil (March 31, 2021: INR 3.30 million) during the year ended March 31, 2022. During the year ended March 31, 2022, the Company has served termination notice to vacate the premise and accordingly written off right of use asset and the lease liability.

29. Leases

Company as lessee

The Company has taken office premises on lease. The lease has been entered for a period ranging from one to nine years with renewal option. The Company has the option, under some of its lease, to renew the lease for an additional years on a mutual consent basis.

The incremental borrowing rate for the lease liabilities is 11% per annum.

30. Commitments and contingent liabilitiesa. Capital commitments

As at March 31, 2022, the Company has commitments on capital account and not provided for (net of advances) of INR 8.08 million (March 31, 2021: INR 9.51 million).

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts includes the following:

- Income tax demand from the Income tax authorities for assessment year 2017-18 of INR 64.88 million on account of disallowance of bad debts written off, advances written off, amortization of goodwill and certain expenses under various heads as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai. In response (dated 29th January''2020) to the notice company has discharged 20% of demand i.e. INR 13 million by depositing INR 6.50 million vide challan No 11922 with HDFC Bank on January 28, 2020 and adjusting a refund of INR 6.25 million which is outstanding for AY 2015-16 on which interest under section 244A of the Act is also pending and this will exceeds a residual amount of INR 6.50 million.

- Income tax demand from the Income tax authorities for assessment year 2015-16 of INR 2.95 million on account of disallowance of availment of cenvat credit and write off of certain advances in the income tax. The matter is pending before ITAT.

The Company is contesting the demands and the management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The likelihood of the above cases going in favour of the Company is probable and accordingly has not considered any provision against the demands in the financial statements.

(ii) During the current year, the Company had further obtained Standby Letter of Credit (SBLC) amounting to INR 476.32 million (equivalent of USD 6.5 million) in favour of Axis Bank Limited, Singapore and INR 439.68 million (equivalent of USD 6 million) in favour of HDFC Bank Limited, Bahrain in lieu of term loan taken by Affle International Pte. Ltd, wholly owned subsidiary of the Company. During the current year, the outstanding SBLC in favour of Axis Bamk Limited, Singapore has reduced by INR 29.31 million (equivalent to USD 0.4 million). During the previous year, the Company had obtained Standby Letter of Credit (SBLC) amounting to INR 695.74 million (equivalent of USD 9.5 million) in favour of Axis Bank Limited, Singapore in lieu of term loan taken by Affle International Pte. Ltd, wholly owned subsidiary of the Company. During the current year, the outstanding SBLC in favour of Axis Bamk Limited, Singapore has reduced by INR 65.91 million (equivalent to USD 0.9 million).

32. Segment information

Ind AS 108 establishes standards for the way that companies report information about operating segments and related disclosures about products and services, geographic areas, and major customers.

The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates the Company''s performance and allocates resources based on analysis of various performance indicators pertaining to advertisement and software development segment.

The “Consumer platform” segment provides mobile advertisement services to its customers and is a reseller of advertisement space for online publishing companies.

The “Enterprise platform” segment provides customized mobile app development services.

Transfer pricing is carried between the operating segments are set at cost plus appropriate margins. Segment revenue, segment expenses and segment result include transfers between operating segments. Those transfers are eliminated in total revenue/expense/result.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in segment information, and are as set out in the significant accounting policies.

The Company had no customer who contributed more than 10% of the Company''s revenue from contracts with customers for the year ended March 31, 2022, however for the year ended March 31, 2021, the Company had one customer. The total amount of revenue from contracts with these customer for the year ended March 31, 2022 is NIL (March 31, 2021: INR 544.69 million).

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Further, the subsequent measurements of all assets and liabilities (other than investments) is at amortised cost, using effective interest rate (EIR) method.

The following methods and assumptions were used to estimate the fair values:

Receivables are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

34. Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

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

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

There have been no transfers between Level 1, Level 2 and Level 3 during the year ended March 31, 2021. Valuation technique used to derive fair values

The Company''s unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

35. Financial risk management objectives and policies

The Company''s principal financial liabilities comprises trade payables, other payables, capital creditors and employee related payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalent that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is responsible to ensure that Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

a. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of a change in market price.

i. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company does not use derivative financial instruments such as forward exchange contracts or options to hedge its risk associated with foreign currency fluctuations or for trading/speculation purpose.

b. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions.

A counterparty whose payment is due more than 90 days after the due date is considered as a defaulted party. This is based on considering the market and economic forces in which the Company operates. The Company write-off the amount if the credit risk of counter-party increases significantly due to its poor financial position.

All the financial assets carried at amortised cost were into good category except some portion of trade receivables considered under doubtful category (refer note 10).

Trade receivables and contract assets

Trade receivables are typically unsecured. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company is exposed to credit risk in the event of non-payment by customers. An impairment analysis is performed at each reporting date. The Company uses a provision matrix to measure the expected credit loss of trade receivables.

None of those trade receivable past due or impaired have had their terms renegotiated. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables presented in the financial statement. The Company does not hold any collateral or other credit enhancements over balances with third parties nor does it have a legal right of offset against any amounts owed by the Company to the counterparty. For receivables which are overdue the Company has subsequently received payments and has reduced its overdue exposure.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s finance committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company monitors their risk of shortage of funds using cash flow forecasting models. These models consider the maturity of their financial investments, committed funding and projected cash flows from operations. The Company''s objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner.

36. Capital management

The Board''s policy maintains a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the amount of dividend if any to shareholders.

For the purpose of the Company''s capital management, capital includes issued equity capital and general reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company''s policy is to keep the gearing ratio ranging between 0% to 60%.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing borrowings in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year.

38. Business combination38.1 Business combinations under common control Scheme of amalgamation in accordance with previous GAAP

During the year ended March 31, 2017, the Holding Company has merged its fellow subsidiaries i.e. AD2C Holdings, AD2C India, Appstudioz Technologies into one merged entity, Affle India Limited (formerly known as “Affle (India) Private Limited”) under the court approved scheme of amalgamation in accordance with erstwhile applicable previous GAAP.

Business combination under common control has been accounted for using purchase method in accordance with previous GAAP as prescribed under court scheme instead of using pooling interest method as prescribed under Ind AS 103. Business Combinations as the approved court scheme will prevail over applicable accounting standard.

Accordingly, the Scheme was accounted for using purchase method in accordance with erstwhile applicable Accounting Standard 14 “Accounting for Amalgamations”. All the assets and liabilities of the Transferor Companies have been incorporated at fair values as at 1 April 2015 against the purchase consideration of INR 84.64 million which resulted in the Goodwill on amalgamation of amounting INR 59.24 million.

Goodwill acquired through business combinations have indefinite life. The Company performed its impairment test for the year ended March 31, 2022.

38.2 Impairment testing of goodwill

Goodwill acquired through business combinations have indefinite life. The Company performs the impairment testing at the initial recognition of Godwill. The Company further performs impairment testing as and when the indicatiors arise. At present there is no indcator for impairment of Goodwill. The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.

The recoverable amount of the goodwill is determined based on value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a five year period and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has used long-term growth rate of 2% (March 31, 2021: 2%) and discount rate of 10% (March 31, 2021: 10%) for calculation of terminal value.

The said cash flow projections are based on the senior management past experience as well as expected market trends for the future periods. The projected cash flows have been updated to reflect the decreased demand for services. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the Company. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.

Discount rates represent the market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments and is derived from its WACC.

The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate. Revenue and EBITDA growths are based on average value achieved in preceding years. Also, the growth rates used to extrapolate the cash flows beyond the forecast period are based on industry standards.

Based on the above assumptions and analysis, no impairment was identified as at March 31, 2022 (March 31, 2021: Nil). Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions/parameters on which the management has based determination of the recoverable amount, there are no scenarios identified by the management wherein the carrying value could exceed its recoverable amount.

39. Employee share based payment

During the year ended March 31, 2022, the Company has issued Employee Stock Option Scheme - 2021” . The relevant details of the scheme and the grant are as follows:

Scheme: Affle (India) Limited Employee Stock Option Scheme - 2021

a. The Company instituted an Employees Stock Option Scheme (“ESOPs”) for certain employees of the Company, its subsidiary and its step down subsidiaries (together know as Group) as approved by the shareholders on September 23, 2021 which provides for a grant of 3,750,000 options (each option convertible into share) to employees of the Group.

41. Other statutory information

i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

ii. The Company does not have any transactions or relationships with any companies struck off under

section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond

the statutory period.

iv. The Company has not traded or invested in Cryptocurrency transactions / balances or Virtual Currency

during the financial year ended March 31, 2022 and March 31, 2021.

v. The Company have not advanced or loaned or invested funds to Intermediaries for further advancing to

any other person(s) or entity(ies), including foreign entities (Intermediaries). with the understanding that the Ultimate beneficiaries.

vi. The Company has not received any funds or further advances in form of any fund from any person(s) or

entity(ies), including guarantee to the Ultimate beneficiaries.

42. 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. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

43. The Company has appointed independent consultants for conducting a Transfer pricing study to determine whether the transactions associated with enterprise were undertaken at “arm length price”. The management confirms that all domestic and international transactions with associated enterprises are undertaken at negotiated contracted price on usual commercial terms and is confident of there being no adjustment on completion of the study. Adjustment, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed.

44. During the year ended March 31, 2020, the Company had completed the Initial Public Offering (IPO) and raised funds of INR 857.64 million, net of IPO expenses. As at September 30, 2021, the Company had utilised all the IPO proceeds raised for working capital and general corporate purposes.

45. During the year ended March 31, 2022, the Company had issued 1,153,845 equity shares with face value of INR 10 each, at a premium of INR 5,190 each aggregating to INR 5,999.99 million. Further, the Company had incurred expenses of approximately INR 93.09 million towards issuance of such equity shares which have been adjusted from the securities premium account. The issue was made in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Upto March 31, 2022, the Company has utilised INR 1,877.95 million towards purposes specified in the placement document. The balance amount of Qualified Institutional Placement''s net proceeds remains invested in fixed and other deposits.

46. On August 08, 2020, the Company had signed a Share Subscription Agreement (“SSA”) and made a strategic, non-controlling investment and acquired 8% stake on a fully diluted basis in Talent Unlimited Online Services Private Limited (“Bobble”) for a consideration of INR 198.00 million through Compulsorily Convertible Preference Shares (“CCPS”). Additionally, the Company had also entered into an exclusive monetization agreement for Bobble''s intellectual property, which also provided rights to the Company to acquire an additional ownership upto 10.47% of Bobble, through subscription to CCPS and equity shares at a pre-agreed consideration upon meeting of conditions as defined in the SSA. The addon technology required to monetize was validated in the year ended March 31, 2021 and accordingly, basis fair value assessment undertaken by an independent valuer, on date of recognition, the Company had accounted for such rights (“call options”) amounting to INR 237.80 million as a derivative asset as per Ind AS 109 with a corresponding credit to contract liabilities to be recognized through statement of profit and loss ranging over a period of 12-18 months.

In the current year, the Company had entered into definite agreements to further acquire 9.72 % stake on a fully diluted basis in Bobble for a consideration of INR 341.98 million through subscription / purchase of both Compulsory Convertible Preference Shares (“CCPS”) and ordinary shares.

Effective January 1, 2022, the Company received a right to appoint its nominee as a director on the Board of Bobble, which was duly exercised. Given the shareholding and board seat, the Company has considered Bobble as an associate over which it is deemed to have significant influence. Further, in the current year, the Company has met the conditions of monetization as specified in SSA (as amended) and has accordingly exercised its rights to acquire additional CCPS and equity shares on March 28, 2022 for INR 198.00 million. The total CCPS investment in Bobble has in substance considered same as ordinary shares and has been accounted as per Ind AS 28 using equity method. As at March 31, 2022, the Company holds 26.86% on fully diluted basis, and the carrying value of investment in Bobble (consideration paid in cash as well as taking effect of fair value gains as on the date of being considered as an associate), INR 1,350.29 million is shown as the deemed cost of investment in an associate.

47. The Finance Act, 2021 has introduced an amendment to section 32 of the Income Tax Act, 1961, whereby Goodwill of a business will not be considered as a depreciable asset and depreciation on goodwill will not be allowed as deductible expenditure effective April 1, 2020. In accordance with the requirements of Ind AS 12 - Income Taxes, the Company has recognised one-time tax expense amounting to INR 14.18 million for the year ended March 31, 2021 respectively being the deferred tax liabilities recognized by the Company on difference between book basis and tax basis of goodwill consequent upon enactment of above provisions. This deferred tax liability is not expected to be a cash outflow in the future and its reversal is deemed unlikely as the value of its associated goodwill is expected by value in use.

*During the year ended March 31, 2022, the Company has increased its stake into Bobble, as a result investment in Bobble is being converted into investment in associates (refer note 46)

Note 1: T1 = end of time period, T0 = beginning of time period, t = specific date falling between T1 and T0, MV(T1) = market Value at T1, MV(T0) = market Value at T0, C(t) = cash inflow, cash outflow on specific date, W(t) = weight of the net cash flow (i.e. either net inflow or net outflow) on day ''t'', calculated as [T1 - t] / T1.

49. Previous year figures

Previous year figures have been regrouped/reclassified wherever necessary, to confirm to this year''s classification and figure for the year ended March 31, 2022.

---

Mar 31, 2021

During the previous year, the Company had executed a Share Subscription Agreement with Affle International Pte. Ltd. Pursuant to the agreement, Affle International Pte. Ltd. allotted fully paid-up shares to the Company against the consideration payable of INR 301.54 million. This provided the Company voting rights amongst other rights except liquidation rights till the time consideration is paid. As at March 31, 2020, the amount was yet to be paid by the Company and was classified under other financial liabilities. In the current year, the amount has been paid by the Company.

Terms/rights attached to preference shares

*The Company has the right to be entitled to receive dividend if declared at any point of time. These preference shares can be convertible into equity shares of Affle X Private Limited after complying the provision of Companies Act, 2013 and the manner as specified in the subscription agreement. The Company does not have any voting rights in the invested entity except in case any resolution is passed. The Company shall have an option to redeem the fully paid up preference share at any point in time subject to maximum redemption period of 20 years.

**Each Series C CCPS shall be converted by the Company into 1 equity share at the rate of INR 10 (Indian Rupees Ten only) per share after 20 years from the date of issuance of the Series C CCPS. It carries a non-cumulative dividend rate of 0.1% (Zero Point One Percent) per annum. The Series C CCPS may not be redeemed by the Company for cash.

Notes:

1. During the year ended March 31, 2021 & year ended March 31, 2020, there were no balances of loan to employees with a significant increase in credit risk or credit impairment.

*Security deposits primarily include deposits given towards rented premises and other miscellaneous deposits. It represents fair value of amount paid to landlord for the leases premises. As at March 31, 2021, remaining tenure for security deposits ranges from one to five years.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relates to income taxes levied by the same tax authority.

In assessing the realisibility of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the years in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the years in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.

*Balances with banks on current accounts includes balance in cash credit facility account. No utilisation of cash credit facility as at March 31, 2021 (March 31, 2020: NIL). The cash credit facility in the year ended March 31, 2021 is secured by hypothecation of fixed & current assets of the Company including other intangible assets. The rate of interest to be charged on the utilisation of the facility amount is 6M MCLR 1.10% (presently 8.80% p.a.) payable at monthly intervals. The amount utilised is payable on demand and the tenure of the cash credit limit is four years from the date of sanction i.e. June 30, 2024.

B. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share. The holders of equity shares are entitled to receive dividends and are entitled to one vote per share. In the event of liquidation, equity shareholders will be entitled to receive assets of the Company in proportion to the number of shares held to the total equity shares outstanding as on that date.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date is Nil.

(iii) Performance obligations

Information about the Company''s performance obligations are summarised below:

Consumer platform

The performance obligation is satisfied at a point in time and payment is generally due within 30 to 90 days of completion of services and acceptance of the customer. In some contracts, short-term advances are required before the advertisement services are provided.

Enterprise platform

The performance obligation is satisfied over time and payment is generally due within 30 to 90 days of

completion of services and acceptance of the customer. In some contracts, short-term advances are required before the software development services are provided.

As the duration of the contracts for consumer and enterprise platform is less than one year, the Company has opted for practical expedient and decided not to disclose the amount of the remaining performance obligations.

Other operating revenue

The performance obligation is satisfied at a point in time and payment is generally due within 60 to 180 days of completion of services and acceptance of the customer.

Notes:

Due to the adoption of Ind AS 115, there is no impact on the revenue recognised by the Company. Hence, the reconciliation of the amount of revenue recognised in the statement of profit and loss with the contracted price is not required.

27 Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

- Capital Management (refer note 36)

- Financial risk management objectives and policies (refer note 35)

- Sensitivity analysis (refer note 28, note 35 and note 38)

This note provides an overview of the areas that involved a higher degree of judgement or complexity. Detailed information on each of these estimates and judgments is included in relevant notes together with information about basis of calculation for each of the line item in the financial statements. Areas involving critical estimates and judgments are:

(a) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (“CGU”) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company has not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by the Company. Refer note 38 for further disclosures.

(b) Provision for expected credit losses of trade receivables and contract assets

Trade receivables and contract assets do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing of the receivable balances and historical experience adjusted for forward-looking estimates. Individual trade receivables are written off when management deems them not to be collectible. For details of allowance for doubtful debts please refer note 10.

(c) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India. Further details about gratuity obligations are given in note 28.

(d) Intangible assets under development

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on management''s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. At March 31, 2021, the carrying amount of capitalised intangible asset under development was INR 87.24 million (March 31, 2020: INR 48.00 million).

This amount includes significant investment in the development of platforms.

(e) Fair value measurement of derivative instruments

The Company uses valuation techniques including the DCF model for the fair valuation of derivative instruments recorded in the balance sheet. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of derivative instruments. See note 44 for further details.

(f) Leases- estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available.

28. Employee benefitsA. Defined contribution plans Provident fund:

The Company makes contribution towards employees'' provident fund. The Company has recognised INR 9.86 million (March 31, 2020: INR 8.97 million) as an expense towards contribution to this plan.

B. Defined benefit plans

Gratuity: The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service with part thereof in excess of six months. The same is payable on termination of service or retirement or death whichever is earlier.

The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognised immediately in the other comprehensive income (OCI).

This is an unfunded benefit plan for qualifying employees. The scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and other comprehensive income and amounts recognised in the balance sheet for the gratuity plan:

Note: The Company has applied practical expedient in Indian Accounting Standard (Ind AS 116) notified vide Companies (Indian Accounting Standards) Amendment Rules, 2020 by Ministry of Corporate Affairs (''MCA'') on July 24, 2020 to all rent rebate received as a direct consequence of COVID-19 pandemic. Accordingly, the Company recognized an amount of INR 4.78 million as other income. The Company has further got rent waivers for other premises taken on lease and it has resulted in cost saving of INR 3.30 million during the year ended March 31, 2021.

a. Capital commitments

As at March 31, 2021, the Company has commitments on capital account and not provided for (net of advances) of INR 9.51 million (March 31, 2020: INR 15.35 million).

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts includes the following:

- Income tax demand from the Income tax authorities for assessment year 2017-18 of INR 64.88 million on account of disallowance of bad debts written off, advances written off, amortization of goodwill and certain expenses under various heads as claimed by the Company in the income tax. The matter is pending before Commissioner of Income Tax (Appeals), Mumbai.

- Income tax demand from the Income tax authorities for assessment year 2015-16 of INR 2.95 million on account of disallowance of availment of cenvat credit and write off of certain advances in the income tax. The matter is pending before ITAT.

The Company is contesting the demands and the management, including its tax advisors, believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations. The likelihood of the above cases going in favour of the Company is probable and accordingly has not considered any provision against the demands in the financial statements.

(ii) The Company has issued Standby Letter of Credit (SBLC) amounting to INR 695.74 million (equivalent of USD 9.5 million) in favour of Axis Bank Limited, Singapore in lieu of term loan taken by Affle International Pte. Ltd, wholly owned subsidiary of the Company.

Terms and conditions of transactions with related parties

The sale and purchase from related parties are made on terms equivalent to those that prevail in arm''s length transaction. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2021 and year ended March 31, 2020, the Company has not recorded any impairment of trade receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

32. Segment information

Ind AS 108 establishes standards for the way that companies report information about operating segments and related disclosures about products and services, geographic areas, and major customers.

The Chief Operating Decision Maker (CODM) being the Board of Directors (Board) evaluates the Company''s performance and allocates resources based on analysis of various performance indicators pertaining to advertisement and software development segment.

The “Consumer platform” segment provides mobile advertisement services to its customers and is a reseller of advertisement space for online publishing companies.

The “Enterprise platform” segment provides customized mobile app development services.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in segment information, and are as set out in the significant accounting policies.

The management assessed that cash and cash equivalent, other bank balances, trade receivables, loans, other financial assets, trade payables, lease liabilities and other financial liabilities approximate their carrying amounts and fair value of the Company''s financial instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Further, the subsequent measurements of all assets and liabilities (other than investments) is at amortised cost, using effective interest rate (EIR) method.

The following methods and assumptions were used to estimate the fair values

Receivables are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

34. Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

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

• Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

• Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

Valuation technique used to derive fair values

The Company''s unquoted instruments is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

35. Financial risk management objectives and policies

The Company''s principal financial liabilities comprises trade payables, other payables, capital creditors and employee related payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalent that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is responsible to ensure that Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of a change in market price.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

b. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions.

A counterparty whose payment is due more than 90 days after the due date is considered as a defaulted party. This is based on considering the market and economic forces in which the Company operates. The Company write-off the amount if the credit risk of counter-party increases significantly due to its poor financial position.

All the financial assets carried at amortised cost were into good category except some portion of trade receivables considered under doubtful category (refer note 10).

Trade receivables and contract assets

Trade receivables are typically unsecured. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company is exposed to credit risk in the event of non-payment by customers. An impairment analysis is performed at each reporting date and as a simplified approach the Company provides for 0.5% of revenues and any amounts aged for more than one year and remaining uncollected. The estimate is based on lifetime expected credit losses and is reassessed periodically. Trade receivables disclosed in note 10 include amounts which are past due at the reporting date but against which the Company has not recognized an allowance for doubtful receivables because the amount are still considered recoverable.

However, the Company in current year have used a provision matrix method to measure the expected credit loss of trade receivables and contract assets and the provision rates are based on days past due for the customers. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company monitors their risk of shortage of funds using cash flow forecasting models. These models consider the maturity of their financial investments, committed funding and projected cash flows from operations. The Company''s objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner.

A balance between continuity of funding and flexibility is maintained through the use of borrowings. The Company also monitors compliance with its debt covenants. The maturity profile of the Company''s financial liabilities based on contractual undiscounted payments is given in the table below:

None of those trade receivable past due or impaired have had their terms renegotiated. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables presented in the financial statement. The Company does not hold any collateral or other credit enhancements over balances with third parties nor does it have a legal right of offset against any amounts owed by the Company to the counterparty. For receivables which are overdue the Company has subsequently received payments and has reduced its overdue exposure.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s finance committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

36. Capital management

The Board''s policy maintains a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the amount of dividend if any to shareholders.

For the purpose of the Company''s capital management, capital includes issued equity capital and general reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company''s policy is to keep the gearing ratio between 0% and 30%.

38. Business combination38.1 Business combinations under common control Scheme of amalgamation in accordance with previous GAAP

During the year ended March 31, 2017, the Holding Company has merged its fellow subsidiaries i.e. AD2C Holdings, AD2C India, Appstudioz Technologies into one merged entity, Affle India Limited under the court approved scheme of amalgamation in accordance with erstwhile applicable previous GAAP.

Business combination under common control has been accounted for using purchase method in accordance with previous GAAP as prescribed under court scheme instead of using pooling interest method as prescribed under Ind AS 103. Business Combinations as the approved court scheme will prevail over applicable accounting standard.

Accordingly, the Scheme was accounted for using purchase method in accordance with erstwhile applicable Accounting Standard 14 “Accounting for Amalgamations”. All the assets and liabilities of the Transferor Companies have been incorporated at fair values as at 1 April 2015 against the purchase consideration of INR 84.64 million which resulted in the Goodwill on amalgamation of amounting INR 59.24 million.

Goodwill acquired through business combinations have indefinite life. The Company performed its impairment test for the year ended March 31, 2021.

38.2 Acquisition of identified business of Vizury Interactive Solutions Private Limited

On September 1, 2018, Affle (India) Limited (“the Company”) acquired the Commerce Business (“Identified Business”) of Vizury Interactive Solutions Private Limited (“Vizury India”) for a consideration of INR 106.44 million (equivalent to USD 1.50 million at the exchange rate of USD1= INR 70.96) minus profit after tax of Vizury India for the period May 15, 2018 to August 31, 2018 of INR 21.37 million (equivalent to USD 0.30 million at the exchange rate of USD1= INR 70.96).

The Company acquired the Identified Business of Vizury India so as to continue the expansion of the consumer platform segment.

Assets acquired and liabilities assumed

In the previous year, the management of the Company had used services of an external independent expert to carry out a detailed Purchase Price Allocation (“PPA”) of the purchase consideration paid to the shareholders of Vizury India. Pursuant to such PPA valuation, conducted by an independent expert, the net consideration of INR 85.07 million had been allocated, based on the fair value computations, at the acquisition date, as an intangible asset, arising from this acquisition. Based on the PPA information obtained, the fair value of the identifiable net asset arising from the transaction are as follows:

38.3 Impairment testing of goodwill

Goodwill acquired through business combinations have indefinite life. The Company performed its impairment test for the year ended March 31, 2021. The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.

The recoverable amount of the goodwill is determined based on value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a five year period and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has used long-term growth rate of 2% (March 31, 2020: 2%) and discount rate of 10% (March 31, 2020: 12.5%) for calculation of terminal value.

The said cash flow projections are based on the senior management past experience as well as expected met trends for the future periods. The projected cash flows have been updated to reflect the decreased demand for services. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the Company. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.

Discount rates represent the market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments and is derived from its WACC.

The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate. Revenue and EBITDA growths are based on average value achieved in preceding years. Also, the growth rates used to extrapolate the cash flows beyond the forecast period are based on industry standards.

Based on the above assumptions and analysis, no impairment was identified as at March 31, 2021 (March 31, 2020: Nil). Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions/parameters on which the management has based determination of the recoverable amount, there are no scenarios identified by the management wherein the carrying value could exceed its recoverable amount.

40. The Company has filed complaint with the police department for embezzlement of the Company''s car and filed the statement of claims to recover full cost of the Company''s car amounting to INR 0.61 million (March 31, 2020: INR 0.61 million). This embezzlement was done by ex- director of the Company, by transferring the Company''s car to the name of his father without any form of consent from the Company. Therefore, the Company has written down entire net book value of the Company''s car amounting to INR 0.07 million (March 31, 2020: INR 0.07 million) in the books.

41. The Company has appointed independent consultants for conducting a Transfer pricing study to determine whether the transactions associated enterprise were undertaken at “arm length price”. The management confirms that all domestic and international transactions with associated enterprises are undertaken at negotiated contracted price on usual commercial terms and is confident of there being no adjustment on completion of the study. Adjustment, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed.

42. In preparation of these financial statements, the Company has considered the possible effects that may result from COVID-19 on the carrying amount of its assets. In developing the assumptions relating to the possible future uncertainties in the global conditions because of COVID-19, the Company, as on date on approval of these financial statements has taken into account both the current situation and the likely future developments and has considered internal and external sources of information to arrive at its assessment. The Company has performed sensitivity analysis on the assumptions used and based on current estimates expects the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company''s financial results may differ from that estimated as at the date of approval of these financial statements.

43. The Company has completed the Initial Public Offering (IPO) of 6,161,073 Equity Shares of Face Value of INR 10 each for cash at a price of INR 745 per Equity Share aggregating to INR 4,590 million comprising a Fresh Issue of 1,208,053 Equity Shares aggregating to INR 900 million and on Offer for sale of 4,953,020 Equity Shares aggregating to INR 3,690 million. Pursuant to the IPO, the Equity Shares of the Company got listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on August 8, 2019. Out of the sale proceeds for offer for sale, INR 3,690 million was remitted to Selling shareholders -Affle Holdings Pte Ltd. The Company incurred INR 256.66 million as IPO related expenses (inclusive of taxes) which are proportionately allocated between the selling shareholder and the Company. The Company''s share of expenses (net of tax), INR 42.36 million has been adjusted against securities premium.

The Company had charged INR 179.90 million from the selling shareholder towards business support services including their share of IPO expenses, based on the agreement with and indemnity from the selling shareholder for the IPO expenses, being a qualified export of services under GST Rules. The Company has relied on expert opinion for invoicing to the selling shareholder.

46. The Code on Social Security 2020 (Code), which received the Presidential Assent on September 28, 2020, subsumes nine laws relating to social security, retirement and employee benefits, including the Employee Provident Fund and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972. The effective date of the Code is yet to be notified. The Company will assess the impact of the Code when it comes into effect and will record related impact thereon.

47. Subsequent to year end, the Company has issued 1,153,845 equity shares with face value of INR each, at a premium of INR 5,190 each aggregating to INR 5,999.99 million. Further, the Company has incurred expenses of approx. INR 89 million towards issuance of such equity shares which will be adjusted from the securities premium account.

48. Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

44. On August 08, 2020, the Company had made a strategic, non-controlling investment and acquired 8% stake on a fully diluted basis in Talent Unlimited Online Services Private Limited (“Bobble”) for a consideration of INR 198.00 million through Compulsory Convertible Preference Shares (“CCPS”). Additionally, the Company has also entered into an exclusive monetisation agreement for Bobble''s intellectual property, which also provides rights to the Company to acquire an additional ownership upto 10.74% of Bobble, through subscription to CCPS and equity shares at a pre-agreed consideration upon meeting of conditions as defined in the monetisation agreement. The addon technology required to monetise was validated during the current year. Accordingly, basis the fair valuation assessment undertaken by an independent valuer on January 31, 2021, and the date of initial recognition being February 15, 2021, the Company has accounted for such rights (call options) amounting to INR 237.80 million as a derivative asset as per Ind-AS 109 with a corresponding credit to contract liabilities to be recognised through statement of profit and loss account over a period of 12-18 months. The derivative asset has been fair valued as at year end and there is no material change from initial recognition. Further, the initial investment made by the Company have been fair valued as at the year end and an amount of INR 34.12 million has been recognised as fair value gain on financial instruments in the statement of profit and loss account.

45. The Finance Act, 2021 has introduced an amendment to section 32 of the Income Tax Act, 1961, whereby Goodwill of a business will not be considered as a depreciable asset and depreciation on goodwill will not be allowed as deductible expenditure effective April 1, 2020. In accordance with the requirements of Ind AS 12 -Income Taxes, the Company has recognised one-time tax expense amounting to INR 14.18 million for the year ended March 31, 2021 respectively being the deferred tax liabilities recognized by the Company on difference between book basis and tax basis of goodwill consequent upon enactment of above provisions. This deferred tax liability is not expected to be a cash outflow in the future and its reversal is deemed unlikely as the value of its associated goodwill is expected by value in use.