.28 Significant accounting policies
Autoriders International Limited is a company domiciled in India and limited by shares
(CIN :L70120MH1985PLC037017) . The shares of the company are publicly traded on the Bombay Stock Exchange of India Limited.
The address of the Company's registered office is 4A, Vikas Centre, S.V.Road, Santacruz West, Mumbai 400056. The Company is
primarily engaged in the business of Rent A Car providing services to majorly corporate business houses for the past 3 decades.
A Basis of preparation
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 ("Act") read with Companies (Indian Accounting Standards) Rules,2015;
and other relevant provisions of the Act and Rules thereunder.
The financial statements have been prepared under historical cost convention basis except for certain financial
assets and financial liabilities measured at fair value.
Authorization of Financial Statements: The Financial Statements were authorized for issue in accordance with a
resolution of the directors on 30th May 2024.
All the assets and liabilities have been classified as current or non- current as per the Company's normal
operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and services
and their realization of cash and cash equivalent, the Company has ascertained the operating cycle to be 12
months.
The financial statements are presented in Indian Rupees, the functional currency rounded off to 2 decimal places.
B Use of Estimates and judgments.
The preparation of financial statements in accordance with Ind AS requires use of estimates and assumptions for
some items, which might have an effect on their recognition and measurement in the balance sheet and statement
of profit and loss. The actual amounts realised may differ from these estimates.
C Determination of the estimated useful lives of the Property Plant and Equipments
Useful lives of property plant and equipments are based on life prescribed in Schedule II of the Companies
_ Act,2013.
D Recognition and measurement of the defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key
actuarial assumption include discount rate, trends in salary escalation, actuarial rates and life expectancy. The
discount rate is determined by the reference to market yields at the end of the reporting period on government
bonds. The period of maturity of the underlying bonds correspond to the probable maturity of the post¬
employment benefit obligation.
E_ Recognition of deferred tax assets
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets to the extent that profit will be available against which the
temporary differences and the carry forward unused tax credits and unused tax losses that can be utilized.
F_ Recognition and measurement of provisions
Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable
that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made
of the amount of obligation.
Provisions are not discounted to present value and are determined based on best estimate required to settle the
obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates.
Property, Plant and Equipment.
G Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready
for use, as intended by the management.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated
with expenditure will flow to the asset.
The residual values and useful lives of property, plant and equipment are reviewed at regular intervals and
changes, if any, are accounted in line with revisions to accounting estimates.
Capital Work in Progress include cost of Property, Plant and equipment under installation/development
as on the Balance Sheet date.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.
The cost property, plant and equipment's as on 1st April 2016, the Company's date of transition to Ind AS,
was determined to its carrying value at that date.
H Depreciation
Depreciation on Plant, Property and Equipment has been provided on the straight-line method based on
the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable
that future economic benefits associated with these will flow to the Company and the cost of the item can
be measured reliably.
Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost
and related accumulated depreciation are eliminated from the financial statements upon sale or disposition
of assets and the resultant gains or losses are recognised in the statement of profit or loss.
Intangible assets and it s amortization
i.
Intangible assets are stated at cost less accumulated amortization and impairment. The intangible assets
are amortized at their estimated useful lives from the date they are available for use. Advances paid towards
acquisition of intangible asset are classified as capital advances under other noncurrent assets in balance
sheet.
Software are amortized over their estimated useful lives not exeeding36 months on a straight-line basis
from the date they are available for use.
The cost of Intangible assets as at 1st April 2016, the Company's date of transition to Ind AS, was determined
with reference of its carrying value at that date.
j. Financial Instruments
The carrying amount of financial assets and liabilities measured at amortized cost in the financial
_ statements are a reasonable approximation of their fair value since the Company does not anticipate that
the carrying amounts would be significantly different from the values that would be eventually be received
or settled.
Financial Assets
Initial recognition and measurement
All financial assets (not measured subsequently at fair value through profit or loss) are recognized initially
at fair value plus transaction costs that are attributable to the acquisition of financial asset.
Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial
assets. The Company classifies financial assets as subsequently measured at amortized cost, fair value
through other comprehensive income or fair value through profit or loss on the basis of its business model
for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss ("ECL") model for measurement
and recognition of impairment loss on the financial assets measured at amortized cost.
Loss allowances on trade receivables are measured following the 'simplified approach' at an amount equal
. to the lifetime (ECL) at each reporting date. Trade receivable are tested for impairment on a specific basis
after considering the allowed credit period, security deposit collected and expectation about future cash
flows.
Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value net of transaction costs that are attributable to
the respective liabilities.
Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial
liabilities. The Company classifies all financial liabilities as subsequently measured at amortized cost except
for financial liabilities at fair value through profit or loss except for financial liabilities at fair value through
profit or loss.
After initial recognition, financial liabilities other than those which are classified as fair value through profit
or loss are subsequently measured at amortized cost using the effective interest rate method("EIR).
Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs
that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of
profit & Loss.
Derecognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as the de-recognition of the original liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognized in the Statement of Profit & Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk of change in value and having original maturities of
three months or less from the date of purchase, to be cash equivalents Cash and cash equivalents comprise
cash on hand and in banks and demand deposits with banks which can be withdrawn at any time without
prior notice or penalty on the principal. Bank overdrafts are shown within borrowings in current liabilities
in the balance sheet.
Employee Benefits:_
Short Term Employee Benefits
All employee benefits payable within twelve months of rendering the service are recognised in the period
in which the employee renders the related service
Post Employment/Retirement Benefits.
^ Defined Contribution Plans
Contribution to Defined Contribution Plans such as Provident Fund, ESIC, etc., are charged to the statement
of Profit and Loss as incurred.
^ Defined Benefit Plans
Defined Benefit Plans: The present value of the obligation under such plans, is determined based on an
actuarial valuation by an independent actuary at the end of each year, using Projected Unit Credit Method.
In the case of gratuity, which is funded, the fair value of the plan asset is reduced from gross obligation
under the defined benefit plans, to recognize the obligation on net basis.
Re-measurement of net defined benefit liability, which comprises actuarial gains and losses, and return on
plan assets(excluding interest) and the effect of the asset ceiling ( if any excluding interest) are recognized
immediately in other comprehensive income
Gratuity - Rs.1370834/-
Acturial Gain/Loss - Rs.(597228 /-)
. Compensated Absences.
The company has provided for liability in respect Leave Encashment payable to Employees on their
retirement based on actuarial valuation as required under IND AS 19 on Accounting for Retirements
benefits as issued by ICAI.
Foreign Currency Transactions:
. Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.
In case of liabilities incurred for the acquisition of fixed assets, the loss or gain on conversion (at the rate
prevailing at the year-end) is recognized as income or expenses in the statement of profit and loss. Current
assets and liabilities (other than those relating to fixed assets) are restated at the rate prevailing at the year
end. The difference between the year-end rate and the exchange rate at the date of the transaction is
recognized as income or expense in the statement of profit and loss.
Borrowing Costs:
. Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset
that necessarily takes a Substantial period of time to get ready for its intended use) are capitalized as a part
of such assets. All other borrowing costs are charged to the Statement of Profit & Loss.
Recognition of Income and Expenditure_
Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and
the revenue can be reliably measured, regardless of when the payment is being made. The company derives
revenues from Car Rentals.
Effective April 1 2018, the company has applied Ind AS 115: Revenue from contracts with customers which
establishes a comprehensive framework for determining whether how much and when revenue is to be
recognized. Ind AS 115 replaces AS 18 Revenue. The impact of the adoption of the standard on the financial
statements of the company is insignificant.
Revenue is recognized on satisfaction of performance obligation upon completion of services to customers
in an amount that reflects the consideration the company expects to receive in exchange for those services.
The performance obligation in our contracts are fulfilled at the time of completion of service.
Revenue is measured based on transaction price which is fair value of the consideration received or
receivable, after deduction of any discounts, and any taxes or duties collected on behalf of the government
such as goods and services tax etc. Revenue is only recognized to the extent that it is highly probable a
significant reversal will not occur.
Dividend income is recognized in statement of Profit and Loss Account only when the right to receive
payment is established.
Interest income is recognized using Effective Interest Rate (EIR) method.
r Cash and cash equivalents._
The Company considers all highly liquid financial instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk of change in value and having original maturities of
three months or less from the date of purchase, to be cash equivalents.
Cash and cash equivalents comprise cash on hand and in banks and demand deposits with banks which can
be withdrawn at any time without prior notice or penalty on the principal. Bank overdrafts are shown
within borrowings in current liabilities in the balance sheet.
s. Taxation
Income tax expense comprises current tax expenses and the net change in the deferred tax asset or liability
during the year. Current and deferred tax are recognized in the statement of profit and loss except when
they relate to items that are recognised in other comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognized in other comprehensive income or directly in equity,
respectively.
i. Current Tax
Current income tax for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the taxable income for that period. The tax
rates and tax laws used to compute the amount are those that are enacted or substantively enacted by
the balance sheet date.
Current tax assets and liabilities are offset only if, the Company:
• has a legally enforceable right to set off the recognized amounts; and
• intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
ii. Deferred Income Tax
Deferred tax is recognized for the future tax consequences of deductible temporary differences between
the carrying values of assets and liabilities and their respective tax bases at the reporting date, using the
tax rates and laws that are enacted or substantively enacted as on reporting date.
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be
available against which the deductible temporary differences, unused tax losses and credits can be
utilized.
Deferred tax assets and liabilities are offset only if:
• Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
• Deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation
authority.
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