2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
Compliance with Indian Accounting Standards (Ind AS)
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under section 133 of Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards)
Rules, 2015] and other relevant provision of the Act.
2.2 Significant accounting judgements, estimates and assumptions
The preparation of 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.
The Company prepared its financial statements based on assumptions and estimates on parameters available
at that time. 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.
Fair value measurement of financial instruments
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
share based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within
the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such
as net realisable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
2.3 Foreign currency transactions
(i) Functional and presentation currency
The Company's financial statements are presented in INR, which is also the Company's functional
currency.
(ii) Transaction and balances
Transactions in foreign currencies are initially recorded at their respective functional currency spot rates
at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value is determined.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with
the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on
items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or
profit or loss, respectively).
2.4 Revenue recognition
Consultancy/Service charges income is recognised on accrual basis as per the terms of agreements.
2.5 Income tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charges is calculated on the basis of the tax laws enacted at the end of the reporting
period in India. 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 income 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 liabilities are recognised for all taxable temporary differences. Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax 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.
Current and deferred tax is recognised in profit and loss, except to the extent that is relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised I other
comprehensive income or directly in equity, respectively.
Minimum Alternate Tax ('MAT') credit is recognised as deferred tax asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during the period for which the MAT credit
can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed
at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
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