The Company measures its convertible promissory notes and Forward Purchase Agreement asset at fair value. The Company’s convertible promissory notes are categorized as Level 1 because they are measured based on observable listed prices of such instruments. The Forward Purchase Agreement is categorized as Level 3 because of unobservable inputs and other estimation techniques due to the absence of quoted market prices, inherent lack of liquidity and the tenure of such financial instruments.

The following table represents the fair value hierarchy for the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2024:


	September 30, 2024
	Fair Value Measured using
Particulars	Level 1		Level 2		Level 3		Total
Financial liabilities:
Derivative warrant liabilities		1,704,695		-		-		1,704,695
Convertible debentures		-		-		1,226,560		1,226,560
		1,704,695		-		1,226,560		2,931,255


	September 30, 2024
	Fair Value Measured using
Particulars	Level 1		Level 2		Level 3		Total
Financial assets:		-		-
Forward purchase agreement		-		-		5,506,801		5,506,801
		-		-		5,506,801		5,506,801

The Company uses a third-party valuation specialist to assist management in its determination of the fair value of its Level 1 classified derivative warrant liabilities. The fair value of these financial instruments is based on the volatility of its ordinary share warrants, based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s ordinary shares that matches the expected remaining life of the warrants. For key aspects of valuation of convertible debentures refer note 13.

The Company uses a third party valuation specialist to assist management in its determination of the fair value of its Level 3 classified Convertible debentures and Forward Purchase Agreement. The instruments were fair valued using a Monte Carlo simulation model utilizing assumptions related to the contractual term of the instruments and current interest rates. For key aspect of the valuation inputs refer notes 13 (c) and 5 (iii) respectively.

The following table presents a reconciliation of the Company’s Level 3 financial instruments measured and recorded at fair value on a recurring basis as of September 30, 2024:


	Financial asset			Financial liability
	Forward purchase agreement			Convertible debentures
Initial measurement		28,784,993			1,374,481
Change in fair value		(23,278,192	)		(147,921	)
Balance as of September 30, 2024		5,506,801			1,226,560

The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair value measurements are based predominately on Level 3 inputs.

The Company measures its non-marketable equity securities that do not have readily determinable fair values under the measurement alternative at cost less impairment, adjusted by price changes from observable transactions recorded within "Other income/(expense) net" in the consolidated statements of operations. The Company’s non-marketable equity securities are investments in privately held companies without readily determinable fair values and primarily relate to its investments in Daokang and Moonshot. During the year ended March 31, 2024, the Company recorded an impairment loss for its non-marketable equity securities, refer note 6.

Interest rate risk - Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to change to market interest rates. The Company is exposed to interest rate risk for its long-term debts where the interest rates are variable according to the market conditions.

Foreign currency risk - The Company monitors its foreign currency exposures on a regular basis. The operations are primarily denominated in United States Dollars, Pounds Sterling, Indian Rupees and Euros. For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in foreign currency exchange rates. Based on a sensitivity analysis we have performed as of September 30, 2024, an adverse 10% foreign currency exchange rate change applied to total monetary assets and liabilities denominated in currencies other than the United States Dollar would not have a material effect on our financial statements.