NOTE 1: SIGNIFICANT ACCOUNTING POLICIES :
A. Company Information :
Wherrelz IT Solutions Limited (Previously known as ''Wherrelz IT Solutions Private Limited”
before conversion to public limited company on 12th July 2021) is a public limited company
domiciled in India and incorporated under the provisions of the Companies Act, 2013. The
company is engaged in the business of providing services related to software development and
technology consultancy services.
The registered office of the company is at Plot No. 15, Road 10, Sec -1 New Panvel East Navi
Mumbai - 410206
These financial statements are authorized for issue by the Board of Directors on 30th May, 2024
B. Significant Accounting Policies :
1. Statement of Compliance :
The financial statements of the company are prepared in accordance with Indian Accounting
Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (the Act) read
with Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant
provisions of the Act.
2. Basis of preparation :
The financial statements have been prepared under historical cost convention basis except
for the following :
• certain financial assets and liabilities (including derivative instruments) and
contingent consideration that are required to be measured at fair value through profit
or loss, are measured at fair value.
3. Use of Estimates :
The preparation of financial statements is in conformity with GAAP which requires
management to make estimates and assumptions that affect the reported amount of assets
and liabilities and disclosure of contingent liabilities on the date of financial statements and
reported amount of revenues and expenses for the year. Actual results could differ from this
estimate. Difference between the actual result and estimates are recognized in the period in
which result are known / materialized.
4. Current and Non-current classification :
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 :
(a) Expected to be realised or intended to be sold or consumed in normal operating cycle
(b) Held primarily for the purpose of trading
(c) Expected to be realised within twelve months after the reporting period, or
(d) 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 :
(e) It is expected to be settled in normal operating cycle
(f) It is held primarily for the purpose of trading
(g) It is due to be settled within twelve months after the reporting period, or
(h) 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.
For this purpose, the Company has ascertained the operating cycle as the time between the
acquisition of assets for processing and their realization in cash and cash equivalents. The
Company has identified twelve months as its operating cycle.
5. Property, Plant and Equipment :
Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation and impairment losses. The cost comprises of the purchase price
or construction cost (including non-creditable/non-refundable taxes), any costs directly
attributable to bringing the property, plant and equipment into the location and condition
necessary for it to be capable of operating in the manner intended by management, the initial
estimate of any decommissioning obligation, if any, and, for assets that necessarily take a
substantial period of time to get ready for their intended use, finance costs. The purchase
price or construction cost is the aggregate amount paid and the fair value of any other
consideration given to acquire the asset.
Subsequent expenditures related to an item of property, plant and equipment are added to
its gross book value or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with them will flow to the Company and
the cost of the item can be measured reliably. All other repairs and maintenance are charged
to profit and loss during the reporting period in which they are incurred.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
statement of profit and loss in the year in which the asset is derecognised.
6. Depreciation method, estimated useful life and residual value :
Depreciation has been provided for on Property, Plant and Equipment over the useful life of
the assets on written down value method, considering the useful life of assets as specified
under Schedule II of the Companies Act 2013.
Property, plant and equipment which are added or disposed off during the year, depreciation
is provided on pro-rata basis.
In line with the provisions of Schedule II of the Companies Act 2013, the Company
depreciates significant components having different useful lives as compared to the main
asset, based on the individual useful life of the components. Useful life for such components
is assessed based on the historical experience and internal technical inputs.
The residual values are not more than 5% of the original cost of the asset. The assets' residual
values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in profit or loss with other gains/losses.
7. Intangible assets :
Intangible asset comprise of computer software and is stated at acquisition cost, net of
accumulated amortisation and accumulated impairment loss, if any.
Amortisation Intangible assets are amortised over the useful life of assets, not exceeding 10
years.
The estimated useful life and amortization method are reviewed at the end of each annual
reporting period, with the effect of any changes in the estimate being accounted for on a
prospective basis.
8. Impairment of assets :
All assets are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less cost of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent of the cash
inflows from other assets or group of assets (cash generating units). Non-financial assets that
suffered impairment earlier are reviewed for possible reversal of the impairment at the end
of each reporting period
9. Foreign currency translation :
Functional and presentation currency
Items included in the financial statement of the Company are measured using the currency
of the primary economic environment in which the entity operates (‘the functional
currency'). The financial statements are presented in Indian Rupees (INR) currency, which is
the Company's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates at the dates of the transactions. Realised gains and losses on settlement of foreign
currency transactions are recognised in the Statement of Profit and Loss. Foreign currency
denominated monetary assets and liabilities at the year-end are translated at the year-end
exchange rates, and the resultant exchange difference is recognised in the Statement of Profit
and Loss. Nonmonetary foreign currency items are carried at cost.
10. Investments :
Long-term Investments are carried at cost. However, provision for diminution in value is
made to recognize a decline, other than temporary, in the value of the investments.
Current Investments are carried at lower of cost or market value. The cost of securities sold
is determined on the first-in-first-out (FIFO) method.
11. Trade Receivables :
Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost net of any expected credit losses, if any.
12. Cash and Cash Equivalents :
For the purpose of presentation in the Statement of cash flows, cash and cash equivalents
include cash in hand, demand deposits with banks and financial institutions and other short
term highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value.
13. Assets held for sale :
Assets are classified as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. A sale is considered highly
probable and is expected to qualify for recognition as a completed sale within one year from
the date of classification. They are measured at the lower of their carrying amount and fair
value less costs to sell except for assets such as deferred tax assets, assets arising from
employee benefits financial assets and contractual rights under insurance contracts, which
are specifically exempt from this requirement. An impairment loss is recognised for any
initial or subsequent write-down of the asset to fair value less costs to sell.
A gain is recognised for any subsequent increases in fair value less costs to sell of an asset,
but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is
recognised at the date of derecognition.
Assets are not depreciated or amortised while they are classified as held for sale. Interest and
other expenses attributable to the liabilities of assets held for sale continue to be recognized.
Assets classified as held for sale are presented separately from the other assets in the balance
sheet under “Other Current Assets”. The liabilities for assets held for sale are presented
separately under other liabilities in the balance sheet.
14. Financial Assets :
Initial recognition and measurement
All financial assets are recognised initially at fair value plus transaction costs that are
attributable to the acquisition of the financial asset, except in the case of financial assets not
recorded at fair value through profit or loss. Transaction costs of financial assets carried at
fair value through profit or loss are expensed through the Statement of Profit and Loss.
Subsequent measurement
For purposes of subsequent measurement, the Company classifies its financial assets in the
following measurement categories :
• those to be measured subsequently at fair value (either through other comprehensive
income, or through profit or loss), and
• those measured at amortised cost
Derecognition
A financial asset is derecognised only when:
• the rights to receive cash flows from the financial asset have expired, or
• the Company has transferred its rights to receive cash flows from the financial asset
or has assumed an obligation to pay the received cash flows to one or more recipient
15. Financial Liabilities :
Classification as liability or equity
Financial liabilities and equity instruments issued by the Company are classified according
tothe substance of the contractual arrangements entered into and the definitions of a
financial liability and an equity instrument.
Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at the amortised cost
unless at initial recognition, they are classified as fair value through profit or loss.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest
rate method. Financial liabilities carried at fair value through profit or loss are measured at
fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognised when the obligation specified in the contract is
discharged, cancelled or expires.
16. Trade and other payables :
These amounts represent liabilities for goods and services provided to the Company prior to
the end of the financial year which are unpaid. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months after the reporting period.
They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.
|