Accounting Policies of First Fintec Ltd. Company

Mar 31, 2024

2. Significant accounting policies

2.1 Statement of compliance

The financial statements are prepared in accordance with and in compliance, in all material aspects, with Indian Accounting
Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the “Act”) read along with Companies (Indian
Accounting Standards) Rules, 2015 (as amended), other provisions of the Act& Rules made thereunderand guidelines
issued by the Securities and Exchange Board of India (SEBI).

2.2 Basis of preparation and presentation of financial statements

These financial statements have been prepared on the historical cost basis except for certain financial assets and defined
benefit plans which are measured at fair values at the end of each reporting period. Historical cost is generally based on the
fair value of consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or liability, the company takes into account the
characteristics of the asset or liability that market participants would take into account when pricing the asset or liability at the
measurement date.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2.3 Functional and presentation currency:

The financial statements are presenting in Indian Rupees, which is the Company’s functional and presentation currency and
all amounts are rounded off to the nearest Rupee thereof, except for share data or otherwise stated.

2.4 Classification of assets and liabilities as current and non-current:

The Company presents assets and liabilities in the balance sheet based on current / non- current classification. An asset is
treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reportingperiod.
The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between
the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve
months as its operating cycle.

2.5 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial
statements is determined on such a basis, except for net realizable value in Ind AS 2 or value in use in Ind AS 36 that has some
similarities to fair value but are not fair value.

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

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

• Level 3 —Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

2.6 Inventories

Inventories which comprise raw materials, finished goods and stock-in-trade are carried at the lower of cost and net realizable
value. Cost of inventories comprises cost of purchases, cost of conversion, all non-refundable duties & taxes and other costs
incurred in bringing the inventories to their present location and condition. In determining cost “First in First out” method is
used.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and other costs necessary to make the sale.

Raw material and other supplies held for use in production of inventories are not written down below cost, except in cases
where material price have declined and it is estimated that the cost of the finished products will exceed their net realizable
value.

2.7 Cash and cash equivalents

Cash comprises cash on hand, in bank and demand deposits with banks. Cash equivalents are short-term balances (with an
original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into
known amounts of cash and which are subject to insignificant risk of changes in value.

2.8 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions
of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities
of the Company are segregated.

2.9 Significant accounting judgements, estimates and assumptions

The preparation of the Company’s separate 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.
Difference between actual results and estimates are recognised in the periods in which the results are known / materialised.

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.

The areas involving critical estimates or judgement are:

a. Useful lives of Tangibles and Intangible including Property, Plant & Equipment if any,

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an
asset / component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In
case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.

b. Inventory write down

The Company reviews the allowance for defective and obsolete items of inventory, wherever necessary at the end of each
reporting period

c. Estimation of tax expenses, utilisation of deferred tax assets (including MAT credit) and tax payable

The Company reviews the carrying amount of tax expenses, deferred tax assets (including MAT credit) and tax payable at
the end of each reporting period.

d. Probable outcome of matters included under Contingent Liabilities

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in
respect of contingencies/ litigations against the Company as it is not possible to predict the outcome of pending matters
with accuracy.

e. Allowance for doubtful trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts. Under Ind AS, impairment allowance has been determined based on Expected Credit
Loss (ECL) model. Estimated irrecoverable amounts are based on the ageing of the receivable balance and historical
experience. Individual trade receivables are written off if the same are not collectible.

2.10 Taxes
Current tax

Current income taxes are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted by the end of the reporting period.

Current income tax relating to items recognised outside profit or loss are recognised outside profit or loss (i.e in other
comprehensive income). Current tax items are recognised in correlation to the underlying transaction. Management periodically
evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date. Deferred tax is recognised on temporary differences

between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.

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

Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction in OCI or equity.

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

Current and/or deferred tax for the year

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

2.11 Impairment of non-financial assets

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

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

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

Impairment loss of continuing operations, including impairment on inventories is recognised in the Statement of Profit and Loss.

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Mar 31, 2015

1. Basis of Accounting and Preparation of Financial Statements:

a. The financial statements have been prepared under the historical cost conversion and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant, presentational requirements of the Companies Act, 2013.

a. Accounting policies not specifically referred to are consistent and in consonance with Generally Accepted Accounting Principles followed by the Company. The company has prepared these financial statements to comply in all material respects with the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013.

b. The Preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and losses on going software projects, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates are made for expected contract cost to be incurred to complete software development and the useful life of fixed assets. Actual could differ from these estimates.

5. Fixed Assets and Depreciation :

Fixed Assets are stated at cost after providing the depreciation in the Hardware & Software and other fixed assets. Depreciation has been provided on WDV Basis.

6. Revenue Recognition

The Company derived its revenues primarily from software services, educational software in the form of e-content and software products. Revenue from time and material contract is recognized on the basis of software developed and billed in accordance with the terms of the contract, under the percentage of completion method.

7. Taxation :

Taxation is accounted on the basis of the Liability Method which is generally followed in India. Provision is made for income tax based on computations after considering rebates, relief(s) and exemptions under the Income Tax Act, 1961.

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accruing each year as per the scheme is expensed as applicable.

8. Retirement Benefits :

The Company has not provided for gratuity amount. It will be paid and accounted as and when the liability arises. Salaries and all allowances include amount paid to employees.

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Mar 31, 2014

1. Basis of Accounting and Preparation of Financial Statements:

a. The financial statements have been prepared under the historical cost conversion and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant, presentational requirements of the Companies Act, 1956.

b. Accounting policies not specifically referred to are consistent and in consonance with Generally Accepted Accounting Principles followed by the Company and are in compliance With the Accounting Standards referred to under Section 211(3C) of the Companies Act, 1956.

c. The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and losses on going software projects, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates are made for expected contract cost to be incurred to complete software development and the useful life of fixed assets. Actual could differ from these estimates.

5. Fixed Assets and Depreciation :

Fixed Assets are stated at cost after providing the depreciation in the Hardware & Software and other fixed assets. Depreciation has been provided on WDV Basis.

6. Revenue Recognition

The Company derived its revenues primarily from software services, educational software in the form of e-content and software products. Revenue from time and material contract is recognized on the basis of software developed and billed in accordance with the terms of the contract, under the percentage of completion method.

7. Taxation :

Taxation is accounted on the basis of the Liability Method which is generally followed in India. Provision is made for income tax based on computations after considering rebates, relief(s) and exemptions under the Income Tax Act, 1961.

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accruing each year as per the scheme is expensed as applicable.

8. Retirement Benefits :

The Company has not provided for gratuity amount. It will be paid and accounted as and when the liability arises. Salaries and all allowances include amount paid to employees.

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Mar 31, 2013

1. Basis of Accounting and Preparation of Financial Statements:

a. The financial statements have been prepared under the historical cost conversion and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant, presentational requirements of the Companies Act, 1956.

b. Accounting policies not specifically referred to are consistent and in consonance with Generally Accepted Accounting Principles followed by the Company and are in compliance With the Accounting Standards referred to under Section 211(3C) of the companies Act, 1956.

c. The Preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and loss es on going software projects, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates are made for expected contract cost to be incurred to complete software developm ent and the useful life of fixed assets. Actual could differ from these estimates.

2. Fixed Assets and Depreciation :

Fixed Assets are stated at cost after providing the depreciation in the Hardware & Software and other fixed assets. Depreciation has been provided on WDV Basis.

3. Revenue Recognition

The Company derived its revenues primarily from software services, educational software in the form of e-content and software products. Revenue from time and material contract is recognized on the basis of software developed and billed in accordance with the terms of the contract, under the percentage of completion method.

4. Taxation :

Taxation is accounted on the basis of the Liability Method which is generally followed in India. Provision is made for income tax based on computations after considering rebates, relief(s) and exemptions under th e Income Ta x Act, 1961.

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accruing each year as per the scheme is expensed as applicable.

5. Retirement Benefits :

The Company has not provided for gratuity amount. It will be paid and accounted as and when the liability arises. Salaries and all allowances include amount paid to employees.

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Mar 31, 2011

1. Basis of Accounts

a. The financial statements have been prepared under the historical cost conversion and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant, presentational requirements of the Companies Act, 1956.

b. Accounting policies not specifically referred to are consistent and in consonance with Generally Accepted Accounting Principles followed by the Company and are in compliance With the Accounting Standards referred to under Section 211(3C) of the companies Act, 1956.

c. The Preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and losses on going software projects, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates are made for expected contract cost to be incurred to complete software development and the useful life of fixed assets. Actual could differ from these estimates.

2. Fixed Assets

Fixed Assets are stated at cost after providing the depreciation in the Hardware & Software and other fixed assets. Depreciation has been provided on WDV Basis.

3. Revenue Recognition

The Company derived its revenues primarily from software services, educational software in the form of e-content and software products. Revenue from time and material contract is recognized on the basis of software developed and billed in accordance with the terms of the contract, under the percentage of completion method.

4. Taxation

Taxation is accounted on the basis of the Liability Method which is generally followed in India. Provision is made for income tax based on computations after considering rebates, relief s and exemptions under the income Tax Act, 1961.

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accruing each year as per the scheme is expensed as applicable.

5. Retirement Benefits

The Company has not provided for gratuity amount. It will be paid and accounted as and when the liability arises. Salaries and all allowances include amount paid to employees.

Notes to Accounts

1. Figures have been rounded off to the nearest rupee.

2. Schedule 1 to 10 consist of forming part of Balance Sheet and Profit and Loss account.

3. All figures are in Rupees. Paisa have been rounded to nearest Rupee.

4. Previous year figures are regrouped and rearranged wherever necessary.

5. In the opinion of the management all current assets including loans and advances would in the normal course of business be realized to the value stated.

6. Quantitative details

The company is engaged in the business of development of Software and Software Products which includes E-education content. The production and sale of Software is not capable of being expressed in any generic unit. Hence it is not possible to give the quantitative details of such sale and the information required under paragraphs 3,4C of Part II of Schedule VI of the Companies Act, 1956.

7. The Company has earned a Foreign Exchange of Rs.463,457,221 (Previous Year - Rs243,673,768) during the year. The Company has incurred an expenditure of Rs.357,033,796 (Previous Year – Rs.185,124,324)

8. The Company is engaged primarily in the business of software development, but during the current financial year the company did only data entry works and accordingly there are no separate reportable segments as per Accounting Standard - AS 17 - Segment Reporting issued by ICAI.

10. Earnings per Share (AS-20)

Basic and Diluted Earnings per share is calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year and shown in the Profit and loss account.

11. Audit Fees for the year is Rs.109,635 and Previous year Rs48,879.

12. In accordance with the Accounting Standard 18 of Related Party Disclosures, name of the related parties and description of the relationship are given below

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Mar 31, 2010

1. Basis of Accounts

(a) The financial statements have been prepared under the historical cost conversion and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant, presentational requirements of the Companies Act, 1956.

(b) Accounting policies not specifically referred to are consistent and in consonance with Generally Accepted Accounting Principals followed by the Company and are in compliance with the Accounting Standards referred to under Section 211(3C) of the Companies Act, 1956.

(c) The Preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and losses on going software projects, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates are made for expected contract cost to be incurred to complete software development and the useful life of fixed assets. Actual could differ from these estimates.

2. Fixed Assets

Fixed Assets are stated at cost after providing the depreciation in the Hardware & Software and other Fixed Assets. Depreciation has been provided on WDV Basis.

3. Revenue Recognition

The Company derived its revenues primarily from software services and software products. Revenue from time and material contract is recognized on the basis of software developed and billed in accordance with the terms of the contract, under the percentage of completion method.

4. Taxation

Taxation is accounted on the basis of the Liability Method which is generally followed in India. Provision is made for Income Tax based on computations after considering rebates, reliefs and exemptions under the Income Tax Act, 1961.

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accruing each year as per the scheme is expensed.

5. Retirement Benefits

The Company has not provided for gratuity amount. It will be paid and accounted as and when the liability arises.

6. Loss of Asset due to Fire:

During the year, a major fire broke out at our companys operational premises located at Srinagar Colony, Hyderabad due to an electric short circuit. The company had to shift its operations to an alternative site located at Kukkatpally, Hyderabad during the said period the work continued without any break.Some of the fixed assets of the Company got destroyed in the fire accident.