2 Material Accounting Policies:
This note provides a list of the material accounting policies adopted in the preparation of the financial statements. These policies
have been consistently applied to all the years presented, unless otherwise stated.
i) Statement of Compliance:
The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies
(Indian Accounting Standards) Rules, 2015 as amended from time to time, notified under section 133 of the Companies Act, 2013,
("Act") and other relevant provisions of the Act.
ii) Basis of preparation:
The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities
that are required to be carried at fair values as per Ind AS. 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.
iii) Use of estimates and critical accounting judgements:
In preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying values of
assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on
historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and future periods affected.
Significant judgements and estimates relating to the carrying values of assets and liabilities include useful lives of property, plant and
equipment and intangible assets, impairment of property, plant and equipment, intangible assets and investments, provision for
employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.
iv) Revenue Recognition:
The Company derives revenue primarily from Staffing, Consultancy and allied services.
Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the
parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the
contract is legally enforceable. Revenue is recognised upon transfer of control of promised products or services ("performance
obligations") to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange
for these products or services ("transaction price"). When there is uncertainty as to collectability, revenue recognition is postponed
until such uncertainty is resolved.
The contract with customer for staffing services, generally contains a single performance obligation and is measured based on the
transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price
concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from
customers
v) Employee Benefits:
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service are recognized in respect of employees' services up to the end
of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the balance sheet.
(ii) Gratuity obligations
The liabilities or assets recognized in the balance sheet in respect of gratuity plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by
actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to
market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related
obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the
period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of
changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized
immediately in profit or loss.
(iii) Defined contribution plans
The Company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further
payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and
the contributions are recognized as employee benefit expense when they are due.
vi) Income Taxes:
Tax expense for the year comprises current and deferred tax.
Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax
rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from the
initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill.
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 assets
and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Tax relating to items recognized directly in equity or other comprehensive income is recognised in equity or other comprehensive
income and not in the Statement of Profit and Loss.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they
are related to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realized simultaneously.
vii) Property, plant and equipment (PPE):
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property,
plant and equipment comprises of purchase price, applicable duties and taxes, 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, upto the date the asset is ready for its intended use.
All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit and loss as incurred.
When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of property, plant and
equipment comprises major components having different useful lives, these components are accounted for as separate items.
Property, Plant and equipment retired from active use and held for sale are stated at the lower of their net book value and net
realizable value and are disclosed separately.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and
equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in
profit or loss.
viii) Depreciation and amortisation expenses:
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on the straight line
method over the useful lives as prescribed in Schedule II to the Act.
The amortized period and amortization method are reviewed at each financial year end.
ix) Financial instruments:
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through
profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
Financial assets
(i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset
in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Further, in case where the company has made an irrevocable selection based on its business model, for its investments
which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair
valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an
amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime
ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
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