2. Summary of material accounting policies
This note provides a list of the material accounting policies adopted in the preparation of these standalone
financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.
2.1 Basis of preparation
The standalone financial statements of the Company are prepared to comply in all material respects with
the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards)
Rules, 2015 as amended time to time and presentation requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the standalone financial statements
and other relevant provisions of the Act. These standalone financial statements are presented in INR and
all values are rounded to the nearest lakh, except when otherwise indicated.
The standalone financial statements have been prepared on a historical cost basis, except for the following
assets and liabilities which have been measured at fair value or revalued amount:
• Certain financial assets and liabilities measured at fair value (refer accounting policy regarding
financial instruments), and
• Contingent consideration. The company has prepared the financial statements on the basis that
it will continue to operate as a going concern.
The accounting policies as set out in the following paragraphs of this note, have been consistently applied,
by the Company, to all the periods presented in the said standalone financial statements.
2.2 Critical accounting estimates and assumptions
The preparation of the standalone financial statements in conformity with the principles of Ind AS requires
the management to make judgements, estimates and assumptions that effect the reported amounts of
revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the
reporting period. Although these estimates are based on the management's best knowledge of current
events and actions, uncertainty about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods. In particular, information about the significant areas of estimation, uncertainty and critical
judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the standalone financial statements.
There are no assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year except for as disclosed in these standalone financial statements.
Information about significant areas of estimation /uncertainty and judgements in applying accounting
policies that have the most significant effect on the standalone financial statements are as follows: -
Impairment of financial assets
The Company determines the allowance for credit losses based on policy for expected loss provision based
on experiential realisations, current and estimated future economic conditions. The Company considered
current and anticipated future economic conditions relating to industries the Company deals with and the
countries where it operates.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the company. The
useful lives and residual values of property, plant and equipment are determined by the management
based on technical assessment by internal team and external advisor. The charge in respect of periodic
depreciation is derived after determining an estimate of an asset's expected useful life and the expected
residual value at the end of its life. The Company believes that the useful life best represents the period
over which the Company expects to use these assets.
Contingent liabilities
Management judgment is required for estimating the possible outflow of resources, if any, in respect of
contingencies/claim/litigations against the Company as it is not possible to predict the outcome of
pending matters with accuracy.
Income Taxes
Management judgment is required for the calculation of provision for income taxes and deferred tax
assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred
tax assets. The factors used in estimates may differ from actual outcome which could lead to significant
adjustment to the amounts reported in the standalone financial statements.
Leases
Judgment required to ascertain lease classification, lease term, incremental borrowing rate, lease and
non-lease component and impairment of right of use assets.
Defined benefit plans
The cost of the defined benefit gratuity plan 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 where
remaining maturity of such bond correspond to expected term of defined benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality
tables tend to change only at interval in response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates for the respective countries.
2.3 Current versus non- current classification
The Company presents assets and liabilities in the standalone financial statements of assets and liabilities
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
• It is 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.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle
• 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 reporting period.
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.
2.4 Fair value measurement
The Company measures financial instruments such as derivatives at fair value at each balance sheet date.
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. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place either:
1. In the principal market for the asset or liability, or
2. In the absence of a principal market, in the most advantageous market for the asset or liability
the principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements
are categorised within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:
1. Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
2. Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
3. 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 standalone 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.
External valuers may be required for valuation of significant assets and liabilities. Involvement of external
valuers is decided on the basis of nature of transaction and complexity involved. Selection criteria include
market knowledge, reputation, independence and whether professional standards are maintained.
At each reporting date, the finance team analyses the movements in the values of assets and liabilities
which are required to be remeasured or re-assessed as per the Company's accounting policies. For this
analysis, the team verifies the major inputs applied in the latest valuation by agreeing the information in
the valuation computation to contracts and other relevant documents. A change in fair value of assets
and liabilities is also compared with relevant external sources to determine whether the change is
reasonable.
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 summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes.
2.5 Property, plant and equipment
An item of property, plant and equipment is recognised as an asset if it is probable that future economic
benefits associated with the item will flow to the Company and its cost can be measured reliably. This
recognition principle is applied to costs incurred initially to acquire an item of property, plant and
equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair
and maintenance costs, including regular servicing, are recognised in the Statement of Profit and Loss as
incurred. Where an item of property, plant and equipment comprises major components having different
useful lives, these components are accounted for as separate items.
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and
rebates, any import duties and other taxes (other than those subsequently recoverable from the tax
authorities), any directly attributable expenditure on making the asset ready for its intended use, other
incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to
the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after its purchase
/ completion is capitalized only if such expenditure results in an increase in the future benefits from such
asset beyond its previously assessed standard of performance. The Company depreciates property, plant
and equipment over their estimated useful lives using the straight-line method. Depreciation methods
and useful lives are reviewed periodically at each financial year end. The gain or loss arising on disposal of
an item of property, plant and equipment is determined as the difference between sale proceeds and
carrying value of such item and is recognised in the Statement of Profit and Loss.
2.6 Intangible assets
Intangible asset 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. In determining the amounts to be
capitalised, management makes assumptions regarding the expected future cash generation of the
project, discount rates to be applied and the expected period of benefits.
2.7 Investment property
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss, if any.
The cost includes the cost of replacing parts and borrowing costs for long-term construction projects
if the recognition criteria are met. When significant parts of the investment properties are required
to be replaced at intervals, the Company depreciates them separately based on their specific useful
lives. All other repair and maintenance costs are recognised in profit or loss as incurred.
The company depreciates building component of investment property over 30 years using straight
line method from the date of original purchase.
The company, based on technical assessment made by technical expert and management estimate,
depreciates the building over estimated useful lives which are different from the useful life prescribed
in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives
are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Though the company measures investment properties using cost-based measurement, the fair value
of investment properties are disclosed in the notes. Fair values are determined based on an annual
evaluation performed by an accredited external independent valuer applying a valuation model
recommended by the International Valuation Standards Committee.
Investment properties are derecognised either when they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the carrying amount of the asset is recognised in
profit or loss in the period of derecognition. In determining the amount of consideration from the
derecognition of investment properties the Company considers the effects of variable consideration,
existence of a significant financing component, non-cash consideration, and consideration payable to
the buyer (if any).
Transfers are made to (or from) investment properties only when there is a change in use. Transfers
between investment property, owner-occupied property and inventories do not change the carrying
amount of the property transferred and they do not changethe cost of that propertyfor measurement
or disclosure purposes.
2.8 Depreciation of property, plant and equipment
Depreciation is provided on the written down value method. The estimated useful life of each asset as
prescribed under Schedule II of the Companies Act, 2013 and based on technical assessment of internal
experts (after considering the expected usage of the asset, expected physical wear and tear, technical and
commercial obsolescence and understanding of past practices and general industry experience) are as
depicted below:
period. Lease hold Improvements are amortised on a straight-line basis over the shorter of estimated
useful life of the asset or lease period.
2.9 Leases
The Company's leased assets primarily consist of leases for office space. The Company assesses whether
a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period in exchange for consideration. To
assess whether a contract conveys the right to control the use of an identified asset, the Company assesses
whether:
Ý the contract involves the use of an identified asset
Ý the Company has substantially all of the economic benefits from use of the asset through the period
of the lease; and
Ý the Company has the right to direct the use of the asset.
1. Right of use assets
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term
of twelve months or less (short-term leases) and low value leases. For these short-term and low-value
leases, the Company recognizes the lease payments as an operating expense on a straight -line basis over
the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date
on a straight-line basis over the shorter of the lease term and useful life of the underlying asset unless the
lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost
of the right-of-use asset reflect that the Company exercise a purchase option. The Company applies Ind
AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment
loss as described in the accounting policy below on "Impairment of non- financial assets".
2. Lease liabilities
The lease liability is initially measured at amortized cost at the present value of the future lease payments
that are not paid at the commencement date. The lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using the Company's incremental borrowing rates.
Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset (or in
profit or loss if the carrying amount of the right-of-use asset has been reduced to zero) if the Company
changes its assessment of whether it will exercise an extension or a termination or a purchase option. The
interest cost on lease liability (computed using effective interest method), is expensed in the statement
of profit and loss.
Lease liability and right-of-use asset have been separately presented in the Balance Sheet and lease
payments have been classified as financing cash flows. The Company has applied a practical expedient
wherein the Company has ignored the requirement to separate non- lease components (such as
maintenance services) from the lease components. Instead, the Company has accounted for the entire
contract as a single lease contract.
2.10 Revenue recognition
The Company derives revenue primarily by providing rent-a-cab facility and other related services.
Revenue is recognised either at a point of time or over time, when (or as) the Company satisfies the
performance obligation of promised services to customers in an amount that reflects the consideration
the Company expects to receive in exchange for those services. Revenue is measured based on the
consideration specified in a contract with a customer.
In arrangements for sale of services, the Company has applied the guidance in Ind AS 115, Revenue from
contract with customers, by applying the revenue recognition criteria for each distinct performance
obligation.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price
(net of variable consideration) allocated to that performance obligation. The transaction price of services
rendered is net of variable consideration on account of various trade discounts and schemes offered by
the Company as part of the contract.
Rent-a-cab services
Revenue comprising rent-a-cab facility given by the Company is recognised when obligations under the
terms of a contract with the customer are satisfied; generally, this occurs at a point in time, when control
of the promised services is transferred to the customer (including service contract with customer for
employee transportation services rendered to corporate customers).
Other services
Other related services include commission and foreclosure charges and incentives. These are recognised
at a point of time, when control of the promised services is transferred to the customer as per the terms
of the contract with the customer.
Other income
Interest income from a financial asset is recognised when it is probable that the economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued on
a time proportion basis, by reference to the principal outstanding and effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset's net carrying amount on initial recognition.
Dividend income is recognized at the time when right to receive the payment is established, which is
generally when the shareholders approve the dividend and it is probable that the economic benefit
associate with the dividend will flow to the Company, and the amount of the dividend can be measured
reliably.
In respect of others, Company recognized income when the right to receive is established.
2.11 Retirement and other employee benefits
Employee benefits include provident fund, employee state insurance scheme, gratuity and compensated
absences.
Long-term employee benefits:
Defined contribution plans: The Company's contribution to provident fund and employee state insurance
scheme are considered as defined contribution plans and are charged as an expense based on the amount
of contribution required to be made and when services are rendered by the employees.
Defined benefit plans: The Company has Defined Benefit Plan in the form of Gratuity. Liability for Defined
Benefit Plans is provided on the basis of valuations, as at the balance sheet date, carried out by an
independent actuary. The defined benefit obligation is calculated annually by independent actuary using
the projected unit credit method. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using discount rate (interest rates of government bonds)
that have terms to maturity approximating to the terms of the gratuity. Remeasurement gains and losses
arising from experience adjustments and changes in actuarial assumptions are recognised in the period in
which they occur, directly in other comprehensive income. They are included in 'Other Comprehensive
Income' (net of taxes) in the statement of changes in equity and in the balance sheet. Net interest is
calculated by applying the discount rate to the net defined benefit liability or asset.
The Company presents the first two components of defined benefit costs in profit or loss in the line item
'Employee Benefits Expense'.
Short-term employee benefits:
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised during the year when the employees render the service.
These benefits include performance incentive and compensated absences which are expected to occur
within twelve months after the end of the period in which the employee renders the related service. The
cost of short-term compensated absences is accounted as under:
Ý in case of accumulated compensated absences, when employees render the services that increase
their entitlement of future compensated absences; and
Ý in case of non-accumulating compensated absences, when the absences occur.
2.12 Taxes
1. Current income tax
Current tax is the tax payable on the taxable profit for the year. Taxable profit differs from 'profit before
tax' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable
or deductible in other years and items that are never taxable or deductible. The Company's current tax is
calculated using tax rates that have been enacted or substantively enacted by the end of the reporting
period, in accordance with the Income Tax Act, 1961.
Current income tax relating to items recognised outside standalone financial statements profit and loss is
recognised outside standalone financial statements profit and loss (either in other comprehensive income
or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or
directly in equity. 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.
Advance taxes and provisions for current income taxes are presented in the statement of assets and
liabilities after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction
and where the relevant tax paying units intends to settle the asset and liability on a net basis.
2. Deferred taxes
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences
between the carrying values of assets and liabilities and their respective tax bases. Deferred tax assets are
recognised for all deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset is realised, based on the tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Company expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and where the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are off set where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
2.13 Earnings per share
Basic earnings per share is computed using the weighted average number of equity shares outstanding
during the period. Diluted earnings per share is computed using the weighted-average number of equity
and dilutive equivalent shares outstanding during the period, except where the results would be anti¬
dilutive.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all
periods presented for any splits and bonus shares issues including for change effected prior to the
approval of the financial Information by the Board of Directors.
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