Accounting Policies of Landmark Cars Ltd. Company

Mar 31, 2025

BM SUMMARY OF MATERIAL ACCOUNTING POLICIES
3.1 Significant accounting estimates, judgements and
assumptions

The preparation of the Companyâs standalone
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 estimates and associated assumptions
are based on historical experience and various other
factors that are believed to be reasonable under the
circumstances existing when the financial statements
were prepared. The estimates and underlying
assumptions are reviewed on an ongoing basis.
Revision to accounting estimates is recognised in the
year in which the estimates are revised and in any
future year affected.

In the process of applying the Companyâs accounting
policies, management has made the following
judgements, estimates and assumptions which have
significant effect on the amounts recognised in the
standalone financial statements.

- Impairment of financial assets:

The impairment provision for financial assets
are based on assumptions about risk of default
and expected loss rates. The Company uses
judgement in making these assumptions and
selecting the inputs to the impairment calculation,
based on Companyâs past history, existing market
conditions as well as forward looking estimates
at the end of each reporting period.

- Share based payment (Refer note 48):

settled transactions at each reporting date until
the vesting date reflects the extent to which the
vesting period has expired and the Companyâs
best estimate of the number of equity instruments
that will ultimately vest. The expense or credit
recognised in the Standalone Statement of Profit
and Loss for a period represents the movement
in cumulative expense recognised as at the
beginning of the year and end of that period and
is recognised in employee benefits expense.

- Impairment of Goodwill :

Estimates related to assessment of goodwill is
disclosed in Note 7.

- Depreciation and Useful Life of Property,
Plant and Equipment (Refer note 5):

Estimates are involved in determining the cost
attributable to bringing the assets to the location
and condition necessary for it to be capable
of operating in the manner intended by the
management. Property, Plant and Equipment are
depreciated over their estimated useful life, after
taking into account estimated residual value.
Management reviews the estimated useful life
and residual values of the assets annually in
order to determine the amount of depreciation
to be recorded during any reporting period.
The useful life and residual values are based
on the Companyâs historical experience with
similar assets and take into account anticipated
technological changes. The depreciation for
future periods is revised if there are significant
changes from previous estimates.

Defined benefit plans:

The cost and present obligation of Defined Benefit
Gratuity Plan are determined using actuarial
valuation. 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 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 assumed at each reporting date. (Refer Note
40)

Contingencies :

I n the normal course of business, contingent
liabilities may arise from litigation and other
claims against the Company. Potential liabilities

that are possible but not probable of crystallising
or are very difficult to quantify reliably are treated
as contingent liabilities. Such liabilities are
disclosed in the notes but are not recognised.
(Refer Note 38)

- Fair Value Measurement:

For estimates relating to fair value of financial
instruments Refer Note 9 and 36.

3.2 Revenue Recognition
Revenue from operations

Revenue from contracts with customers is recognised
on transfer of control of promised goods or services to
a customer at an amount that reflects the consideration
to which the Company is expected to be entitled to in
exchange for those goods or services.

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
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract.

This variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
consideration) is recognised only to the extent that it
is highly probable that the amount will not be subject
to significant reversal when uncertainty relating to its
recognition is resolved.

Sale of products:

Revenue from sale of products is recognised when
the control on the goods have been transferred to the
customer. The performance obligation in case of sale
of product is satisfied at a point in time i.e., when the
goods are dispatched to the customers or on delivery
to the customers, as may be specified in the contract.

Rendering of services:

Revenue from services are recognised in the
accounting period in which services are transferred
to the customers at an amount that reflects the
consideration to which the entity expects to be entitled
in exchange for those services. The Company uses
output method for measurement of revenue from
rendering of services based on time elapsed and / or
parts delivered.

Commission, schemes and incentive income

Commission income is recognised when services
are rendered and in accordance with the commission

agreements. Schemes and Incentive income is
recognised when the services are rendered and as
per the relevant scheme/ arrangement provided by
the original equipment manufacturer (OEM).

Extended warranty

Income of the extended warranty contracts are
recognise on a straight line basis over the contractual
period to which warranty service relates. Incremental
cost of obtaining such contract is recognised as an
asset, if the Company expects to recover those cost
over the contract period.

Dividend Income

Dividend income is recognised when the Companyâs
right to receive the payment is established.

Interest income

Interest income is recognised using effective interest
method. The effective interest rate is the rate that
exactly discounts estimated future cash receipts
through expected life of the financial asset to the
gross carrying amount of the financial asset. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering all
the contractual terms of the financial instrument but
does not consider the expected credit losses.

3.3 Property, Plant and Equipment

Property, Plant and Equipment are stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any.

The cost comprises the purchase price, borrowing
cost if capitalisation criteria are met and directly
attributable cost of bringing the asset to its working
condition for its intended use. Any trade discounts and
rebates are deducted in arriving at the purchase price.

Subsequent expenditures relating to property, plant
and equipment is capitalised 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.

All other expenses on existing property, plant
and equipment, including day-to-day repair and
maintenance expenditure and cost of replacing parts,
are charged to the Standalone Statement of Profit and
Loss for the period during which such expenses are
incurred.

Property, Plant and Equipment not ready for the
intended use on the date of the Balance Sheet are
disclosed as âCapital work-in-progressâ.

Gains or losses arising from derecognition of fixed
assets are measured as the difference between the
net disposal proceeds and the carrying amount of the
asset at the time of disposal and are recognised in
the Standalone Statement of Profit and Loss when the
asset is derecognised.

Depreciation on Property, Plant and Equipment is
calculated on the straight-line method as per the
useful life prescribed in Schedule II to the Companies
Act, 2013.

Leasehold improvements are amortised over the
period of the lease (Refer Note 43), including extension
period, if any. Residual value of the leasehold
improvements are considered as 5% of cost except
in case of steel used as the Company is expected to
receive residual value at 50% of cost at the end of the
lease period.

In respect of Property, Plant and Equipment purchased
during the year, depreciation is provided on a pro-rata
basis from the date on which such asset is ready to
use.

The residual value, useful live and method of
depreciation of Property, Plant and Equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

3.4 Intangible assets

An intangible asset is recognised, only where it is
probable that future economic benefits attributable to
the asset will accrue to the enterprise and the cost can
be measured reliably.

I ntangible assets acquired separately are measured
on initial recognition at cost. Intangible assets arising
on acquisition of business are measured at fair value as
at date of acquisition. Internally generated intangibles
including research cost are not capitalised and the
related expenditure is recognised in the standalone
statement of profit and loss in the period in which the
expenditure is incurred. Following initial recognition,
intangible assets are carried at cost less accumulated
amortisation and accumulated impairment loss, if any.

Intangible assets not ready for the intended use on the
date of the Balance Sheet are disclosed as intangible
assets under development.

Amortisation:

Customer relationship and Non-compete fees
acquired in business combination are amortised over
a period of 5 years and 8 years on straight line basis
respectively.

Computer software is amortised over the period
of licence or 3 years since in the opinion of the
management the benefits will be available for that
period.

3.5 Financial Instruments
Initial recognition

The Company recognises financial assets and
financial liabilities when it becomes a party to the
contractual provisions of the instrument.

All financial assets and liabilities are recognised at fair
value net off directly attributable transaction cost on
initial recognition.

Subsequent measurement
Non-derivative financial instruments
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.

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.

The Company has made an irrevocable election
for its investments which are classified as equity
instruments to present the subsequent changes in
fair value in other comprehensive income based on
its business model. For such equity instruments, the
subsequent changes in fair value are recognised in
other comprehensive income.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the
above categories are subsequently measured at fair
valued through profit or loss. Fair value changes
are recognised as other income in the Standalone
Statement of Profit or Loss.

Investments in Equity Instruments

Investments in subsidiary companies are carried
at cost less accumulated impairment losses, if any.
Where an indication of impairment exists, the carrying
amount of the investment is assessed and written
down immediately to its recoverable amount. On
disposal of investments in subsidiary companies the
difference between net disposal proceeds and the
carrying amounts are recognised in the Standalone
Statement of Profit and Loss.

Financial liabilities at Fair Value through Profit or
Loss (FVTPL)

A financial liability may be designated as at FVTPL
upon initial recognition if:

(a) such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise;

(b) The financial liability whose performance is
evaluated on a fair value basis, in accordance with
the Companyâs documented risk management;

Financial liabilities at FVTPL are stated at fair value,
with any gains or losses arising on remeasurement
recognised in the Standalone Statement of Profit and
Loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.

Financial liabilities at amortised cost

The effective interest method of calculating the
amortised cost of a financial liability and of allocating
interest expense over the relevant period.

The effective interest rate is the rate that exactly
discounts estimated future cash payments (including
all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a
shorter period, to the net carrying amount on initial
recognition.

Trade and other payables are recognised at
the transaction cost, which is its fair value, and
subsequently measured at amortised cost.

Vehicle floor plan

Vehicle floor plan represents amount borrowed to
finance the purchase of inventories of cars with the
manufacturerâs captive finance Company (Refer Note
22).

Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the Company after
deducting all of its liabilities. Incremental costs directly
attributable to the issuance of equity instruments are
recognised as a deduction from equity instrument net
of any tax effect.

Derecognition

An exchange of debt instruments with substantially
different terms is accounted for as an extinguishment
of the original financial liability and the recognition
of a new financial liability. Similarly, a substantial
modification of the terms of an existing financial
liability or a part of it is also accounted for as an
extinguishment of the original financial liability and the
recognition of a new financial liability.

Off-setting

Financial assets and liabilities are offset and the net
amount is presented in the balance sheet when the
Company currently has a legally enforceable right to
offset the recognised amount and intends either to
settle on a net basis or to realise the asset and settle
the liability simultaneously.

Modification

A modification of a financial asset or liabilities occurs
when the contractual terms governing the cash flows
of a financial asset or liabilities are renegotiated or
otherwise modified between initial recognition and
maturity of the financial instruments. Any gain/ loss on
modification is charged to Standalone Statement of
Profit and Loss.

3.6 Fair Value Measurement

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 assumes that the
transaction to sell the asset or transfer the liability
takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most
advantageous market for the asset or liability

A fair value measurement of a non-financial asset
takes into account a market participantâs ability to
generate economic benefit 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 financial statements
are categorised within the fair value hierarchy. The
fair value hierarchy is based on inputs to valuation
techniques that are used to measure fair value that
are either observable or unobservable and consists of
the following three levels:

Level 1 - Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

Level 2 - Valuation techniques for which the

lowest level input that is significant to the fair value
measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the

lowest level input that is significant to the fair value
measurement is unobservable

3.7 Tax expense
Income tax

Income tax expense comprises current tax and
deferred tax.

Current Tax

The Company has elected to exercise option available
under section 115BAA of the Income Tax Act, 1961.

Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities. Current tax is measured at the
amount expected to be paid to the tax authorities in
accordance with the Income-Tax Act, 1961 enacted
in India. The tax rates and tax laws used to compute
the amount are those that are enacted or substantially
enacted, at the reporting date.

Current tax relating to items recognised outside
the Standalone Statement of Profit and Loss. is
recognised outside the statement of 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.

Deferred Tax

Deferred tax is recognised in profit or loss, except
when it relates to items that are recognised in other
comprehensive income or directly in equity, in
which case, the deferred tax is also recognised in
other comprehensive income or directly in equity,
respectively.

Deferred tax liabilities are recognised for all taxable
temporary differences, except to the extent that the
deferred tax liability arises from initial recognition of
goodwill; or initial recognition of an asset or liability in
a transaction which is not a business combination and
at the time of transaction, affects neither accounting
profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible
temporary differences, carry forward of unused tax
losses and carry forward of unused tax credits to the
extent that it is probable that taxable profit will be
available against which those temporary differences,
losses and tax credit can be utilised, except when
deferred tax asset on deductible temporary differences
arise from the initial recognition of an asset or liability
in a transaction that is not a business combination
and at the time of the transaction, affects neither
accounting profit nor taxable profit or loss.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based
on the tax rules and tax laws that have been enacted
or substantively enacted by the end of the reporting
period.

Deferred tax assets and deferred tax liabilities are
offset, where company has a legally enforceable right
to set off the recognised amounts and where it intends
either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.

Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.

3.8 Impairment

Financial assets

The Company assesses at each reporting date
whether there is any objective evidence that a financial
asset is impaired. A financial asset is deemed to be
impaired if, there is objective evidence of impairment
as a result of one or more events that has occurred
after the initial recognition of the asset and that loss
event has an impact on the estimated future cash
flows of the financial asset or that can be reliably
estimated.

The Company recognises 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 impairment loss allowance (or reversal)
recognised during the year is recognised as income
/ expense in the Standalone Statement of Profit and
Loss.

Non-financial assets

The carrying value of assets/cash generating units at
each Balance Sheet date are reviewed for impairment.
If, any such indication exists, the Company estimates
their recoverable amount and impairment is
recognised if, the carrying amount of these assets/cash
generating units exceeds their recoverable amount.
The recoverable amount is greater of fair value less
cost of disposal and their value in use. When there is
indication that an impairment loss recognised for an
asset in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment
loss is recognised in the Standalone Statement of
Profit and Loss.

3.9 Lease

Company as lessee

The Companyâs lease asset classes primarily consist
of leases for showrooms, workshops, plant and
equipment and stockyards. 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 of time in exchange for
consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

At the date of commencement of the lease, the
Company recognises a right-of-use (âROUâ) asset
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases
with a term of 12 months or less (short-term leases)
and low value leases. For these short-term and low-
value leases, the Company recognises the lease
payments as an operating expense on a straight-line
basis over the term of the lease.

The ROU assets are initially recognised 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
amortisation and impairment losses.

ROU 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.

The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or the Companyâs incremental
borrowing rate.

Lease liability and ROU assets have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

Company as lessor

When the Company is an intermediate lessor, it
accounts for the head lease and the sub-lease as two
separate contracts. The sub-lease is classified as a

finance or operating lease by reference to the right-of-
use asset arising from the head lease. Rental income
from operating leases are recognised on a straightÂ¬
line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of
the leased asset and recognised on a straight-line
basis over the lease term.

3.10 Employee Benefits

Defined Contribution Plan

Retirement benefit in the form of provident fund,
employeesâ state insurance fund scheme and Labour
welfare scheme is a defined contribution scheme. The
Company has no obligation, other than the contribution
paid/payable under such schemes. The contribution
paid/payable under the schemes is recognised during
the period in which the employee renders the related
service.

Defined Benefit Plan

The Company has provided the benefits of gratuity,
a defined benefit plan (the âGratuity Planâ) covering
eligible employees in accordance with the Payment
of Gratuity Act, 1972. As per the Gratuity Plan, the
Company made monthly payment to their employees
with remeasurement option to vested employees at
retirement, death, incapacitation or termination of
employment, of an amount based on the respective
employeeâs salary and the tenure of employment. The
Companyâs liability is actuarially determined (using
the Projected Unit Credit method) at the end of each
year. Gratuity which is defined benefit plans was paid
per month on the basis of employeeâs gross salary
till March 31, 2024. W.e.f. April 01, 2024, the benefit
payable is the differential amount calculated as per
the Payment of Gratuity Act, 1972 and the amount
paid to employees on a monthly basis along with
salary payments till March 31,2024 (Pre-payments).

Remeasurements of the net defined benefit liability
comprising actuarial gains and losses (excluding
amounts included in net interest on the net
defined benefit liability), are recognised in Other
Comprehensive Income. Such remeasurements are
not reclassified to the Standalone Statement of Profit
and Loss in the subsequent periods.

Compensated absences are not to be carried forward
beyond 12 months and are paid per month on the
basis of the employeeâs gross salary.

Mar 31, 2024

^3 SUMMARY OF MATERIAL ACCOUNTING

POLICIES

3.1 SIGNIFICANT ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

The preparation of the Companyâs standalone financial statements requires management to make judgments, 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 estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognised in the year in which the estimates are revised and in any future year affected. In the process of applying the Companyâs accounting policies, management has made the following judgements, estimates and assumptions which have significant effect on the amounts recognised in the standalone financial statements.

- Impairment of financial assets:

The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

- Share based payment (Refer note 47):

cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognised in the Standalone Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning of the year and end of that period and is recognised in employee benefits expense.

- Impairment of Goodwill:

Estimates related to assessment of goodwill is disclosed in Note 7.

- Depreciation and Useful Life of Property, Plant and Equipment (Refer note 5):

Estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management. Property, Plant and Equipment are depreciated over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful life and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is revised if there are significant changes from previous estimates.

- Fair Value Measurement

For estimates relating to fair value of financial instruments Refer Note 9 and 35.

3.2 Revenue Recognition Revenue from operations

Revenue from contracts with customers is recognised on transfer of control of promised goods or services to a customer at an amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or services.

goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. This variable consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognised only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.

Sale of products:

Revenue from sale of products is recognised when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the goods are dispatched to the customers or on delivery to the customers, as may be specified in the contract.

Rendering of services:

Revenue from services is recognised over time by measuring progress towards satisfaction of performance obligation for the services rendered. The Company uses output method for measurement of revenue from rendering of services based on time elapsed and / or parts delivered.

Commission, schemes and incentive income

Commission income is recognised when services are rendered and in accordance with the commission agreements. Schemes and Incentive income is recognised when the services are rendered and as per the relevant scheme/ arrangement provided by the original equipment manufacturer (OEM).

Extended warranty

Income of the extended warranty contracts are recognise on a straight line basis over the contractual period to which warranty service relates. Incremental cost of obtaining such contract is recognised as an asset, if the Company expects to recover those cost over the contract period.

Dividend Income

Dividend income is recognised when the Companyâs right to receive the payment is established.

3.3 Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

The cost comprises the purchase price, borrowing cost if capitalisation criteria are met and directly

attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditures relating to property, plant and equipment is capitalised 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.

All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Standalone Statement of Profit and Loss. for the period during which such expenses are incurred.

Property, Plant and Equipment not ready for the intended use on the date of the Balance Sheet are disclosed as âCapital work-in-progressâ.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset at the time of disposal and are recognised in the Standalone Statement of Profit and Loss when the asset is derecognised.

Depreciation on Property, Plant and Equipment is calculated on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

Leasehold improvements are amortised over the period of the lease (Refer Note 42), including extension period, if any. Residual value of the leasehold improvements are considered as 5% of cost except in case of steel used as the Company is expected to receive residual value at 50% of cost at the end of the lease period.

In respect of Property, Plant and Equipment purchased during the year, depreciation is provided on a pro-rata basis from the date on which such asset is ready to use.

The residual value, useful live and method of depreciation of Property, Plant and Equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

3.4 Intangible assets

An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalised and the related expenditure is recognised in the standalone statement of profit and loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.

Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as intangible assets under development.

Amortisation:

Customer relationship and Non-compete fees acquired in business combination are amortised over a period of 5 years and 8 years on straight line basis respectively.

Computer software is amortised over the period of licence or 3 years since in the opinion of the management the benefits will be available for that period.

3.5 Financial Instruments Initial recognition

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.

All financial assets and liabilities are recognised at fair value net off directly attributable transaction cost on initial recognition.

Subsequent measurement Non-derivative financial instruments 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.

Financial assets at fair value through other comprehensive income

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.

The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. For such equity instruments, the subsequent changes in fair value are recognised in other comprehensive income.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently measured at fair valued through profit or loss. Fair value changes are recognised as other income in the Standalone Statement of Profit or Loss.

Financial liabilities at Fair Value through Profit or Loss (FVTPL)

A financial liability may be designated as at FVTPL upon initial recognition if:

(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;

(b) The financial liability whose performance is evaluated on a fair value basis, in accordance with the Companyâs documented risk management;

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in the Standalone Statement of Profit and Loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Financial liabilities at amortised cost

Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ line item. The effective interest method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and

other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Trade and other payables are recognised at the transaction cost, which is its fair value, and subsequently measured at amortised cost.

Vehicle floor plan

Vehicle floor plan represents amount borrowed to finance the purchase of inventories of cars with the manufacturerâs captive finance company considering the significance of the amount involved, the same has been presented seperately on the face of balance sheet.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Incremental costs directly attributable to the issuance of equity instruments are recognised as a deduction from equity instrument net of any tax effect.

Derecognition

The Company derecognises 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 derecognition under Ind AS 109. A financial liability is derecognised when obligation specified in the contract is discharged or cancelled or expired. An exchange of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it is also accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Off-setting

Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Company currently has a legally enforceable right to offset the recognised amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Modification

maturity of the financial instruments. Any gain/ loss on modification is charged to Standalone Statement of Profit and Loss.

3.6 Fair Value Measurement

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 assumes that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefit 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 financial statements are categorised within the fair value hierarchy. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

3.7 TAX EXPENSE Income tax

Income tax expense comprises current tax and deferred tax.

Current Tax

The Company had elected to exercise option available under section 115BAA of the Income Tax Act, 1961.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date.

Current tax relating to items recognised outside the Standalone Statement of Profit and Loss. is recognised outside the statement of 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.

Deferred Tax

Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case, the deferred tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax liabilities are recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from initial recognition of goodwill; or initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits to the extent that it is probable that taxable profit will be available against which those temporary differences, losses and tax credit can be utilised, except when deferred tax asset on deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit or loss.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rules and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset, where company has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.8 Impairment

Financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. A financial asset is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or that can be reliably estimated.

The Company recognises 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 impairment loss allowance (or reversal) recognised during the year is recognised as income / expense in the Standalone Statement of Profit and Loss.

Non-financial assets

cost of disposal and their value in use. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Standalone Statement of Profit and Loss.

3.9 Lease

Company as lessee

The Companyâs lease asset classes primarily consist of leases for showrooms, workshops, plant and equipment and stockyards. 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 of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use (âROUâ) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The ROU assets are initially recognised 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 amortisation and impairment losses.

ROU 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.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or the Companyâs incremental borrowing rate.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

Company as lessor

When the Company is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases are recognised on a straightline basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

3.10 Employee Benefits

Defined Contribution Plan

Retirement benefit in the form of provident fund, employeesâ state insurance fund scheme and Labour welfare scheme is a defined contribution scheme. The Company has no obligation, other than the contribution paid/payable under such schemes. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

Defined Benefit Plan

The Company has provided the benefits of gratuity, a defined benefit plan (the âââGratuity Planââ) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. As per the Gratuity Plan, the Company makes monthly payment to their employees with remeasurement option to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Gratuity which is defined benefit plans is paid per month on the basis of employeeâs gross salary.

Remeasurements of the net defined benefit liability comprising actuarial gains and losses (excluding amounts included in net interest on the net defined benefit liability), are recognised in Other Comprehensive Income. Such remeasurements are not reclassified to the Standalone Statement of Profit and Loss in the subsequent periods.

Compensated absences are not to be carried forward beyond 12 months and are paid per month on the basis of the employeeâs gross salary.

Mar 31, 2023

COMPANY OVERVIEW

Landmark Cars Limited (âthe Companyâ) is a company incorporated and domiciled in India under the Indian Companies Act, 1956. Its registered office is located at Landmark House, Opp. AEC, S.G. Highway, Near Gurudwara, Thaltej, Ahmedabad - 380059, Gujarat, India. The Companyâs equity shares were listed on the National Stock Exchange (âNSEâ) and on the BSE Limited (âBSEâ) on December 23, 2022. The Company is the authorised dealer for Mercedes-Benz passenger cars for the states of Gujarat, Madhya Pradesh and Mumbai. The Company is engaged in the business of (i) authorised agent of selling automobiles of a single brand âMercedes-Benzâ

(ii) the operation of workshops and garages to repair and service the automobiles, including other ancillary services

(iii) direct selling agency/marketing agency on behalf of inter alia banks and non-banking financial companies to market their financing schemes to customers (iv) selling of accessories (v) the insurance commission business in connection with (i) and (ii).

The Company had been converted from Private Limited Company to a Public Limited Company, pursuant to a special resolution passed in the extraordinary general meeting of the shareholders of the Company held on November 10, 2021 and consequently the name of the Company has been changed to Landmark Cars Limited pursuant to a fresh certificate of incorporation issued by Registrar of Companies on December 03, 2021.

The standalone financial statements for the year ended March 31, 2023 were approved by the Board of Directors and authorised for issue on May 30, 2023.

WM BASIS OF PREPARATION AND PRESENTATION OF STANDALONE FINANCIAL STATEMENTS

2.1 Basis of preparation and statement of compliance

The Standalone Financial Statements of Company comprise the Standalone Balance Sheet as at March 31, 2023, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity for the year ended March 31, 2023, and a summary of significant accounting policies and other explanatory information (together referred to as the âStandalone Financial Statementsâ).

The Standalone Financial Statements of the Company have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013, read together with

the Companies (Indian Accounting Standards) Rules, 2015 (as amended), and other accounting principles generally accepted in India, considering other relevant provisions of the Act.

These Standalone Financial Statements have been prepared and presented under the historical cost convention on accrual basis except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. Historical cost is generally based on the fair value of consideration given in exchange for goods and services. The accounting policies have been applied consistently over all the periods presented in the said Standalone Financial Statements except for the amended standards adopted by the Company (Refer Note 3).

In addition, the financial statements are presented in '' and all values are rounded to the nearest Millions, except when otherwise indicated.

2.2 Significant accounting estimates, judgements and assumptions

The preparation of Standalone Financial Statements requires management to make judgments, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively.

Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:

- Impairment of financial assets:

The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

- Share based payment (Refer note 49):

Employees of the Company, with a pre defined grade, is granted options to purchase equity shares. Each share option converts into one equity share of the Company on exercise. In accordance with the Ind AS 102 Share Based Payments, the cost of equity settled transactions is measured using the fair value method. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognised in the Standalone Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning of the year and end of that period and is recognised in employee benefits expense.

- Impairment of Goodwill :

Estimates related to assessment of goodwill is disclosed in Note 7.

- Depreciation and Useful Life of Property, Plant and Equipment (Refer note 5):

Estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management. Property, Plant and Equipment are depreciated over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful life and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is revised if there are significant changes from previous estimates.

- Fair Value Measurement

For estimates relating to fair value of financial instruments Refer Note 9 and 36.

2.3 Revenue Recognition Revenue from operations

Revenue from contracts with customers is recognised on transfer of control of promised goods or services to a customer at an amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or services.

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 goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.

This variable consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognised only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.

Sale of products:

Revenue from sale of products is recognised when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is dispatched to the customer or on delivery to the customer, as may be specified in the contract.

Rendering of services:

Extended warranty

Income of the extended warranty contracts are recognised on a straight line basis over the contractual period to which warranty service relates. Incremental cost of obtaining such contract is recognised as an asset, if the Company expects to recover those cost over the contract period.

Commission, schemes and incentive income

2.4 Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

The cost comprises the purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditures relating to property, plant and equipment is capitalised 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.

All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Standalone Statement of Profit and Loss. for the period during which such expenses are incurred.

Property, Plant and Equipment not ready for the intended use on the date of the Balance Sheet are disclosed as âCapital work-in-progressâ.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset at the time of disposal and are recognised in the Standalone Statement of Profit and Loss when the asset is derecognised.

Depreciation on Property, Plant and Equipment is calculated on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

In respect of Property, Plant and Equipment purchased during the year, depreciation is provided on a pro-rata

basis from the date on which such asset is ready to use.

The residual value, useful life and method of depreciation of Property, Plant and Equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

2.5 Intangible assets

An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalised and the related expenditure is recognised in the standalone statement of profit and loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.

Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as intangible assets under development.

Amortisation:

Customer relationship and Non-compete fees acquired in business combination are amortised over a period of 5 years and 3 years on straight line basis respectively.

2.6 Financial Instruments Initial recognition

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.

All financial assets and liabilities are recognised at fair value net off directly attributable transaction cost on initial recognition.

Subsequent measurement Non-derivative financial instruments 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.

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.

The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. For such equity instruments, the subsequent changes in fair value are recognised in other comprehensive income.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently measured at fair valued through profit or loss. Fair value changes are recognised as other income in the Standalone Statement of Profit or Loss.

Financial liabilities at Fair Value through Profit or Loss (FVTPL)

A financial liability may be designated as at FVTPL upon initial recognition if:

(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;

(b) The financial liability whose performance is evaluated on a fair value basis, in accordance with the Companyâs documented risk management;

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in the Standalone Statement of Profit and Loss.. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Financial liabilities at amortised cost

The effective interest method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Trade and other payables are recognised at the transaction cost, which is its fair value, and subsequently measured at amortised cost.

Vehicle floor plan

Vehicle floor plan represents amount borrowed to finance the purchase of inventories of cars with the manufacturerâs captive finance company. considering the significance of the amount involved, the same has been presented separately on the face of balance sheet.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Incremental costs directly attributable to the issuance of equity instruments are recognised as a deduction from equity instrument net of any tax effect.

Derecognition

An exchange of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it is also accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Off-setting

Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Company currently has a legally enforceable right to offset the recognised amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Modification

A modification of a financial asset or liabilities occurs when the contractual terms governing the cash flows of a financial asset or liabilities are renegotiated or otherwise modified between initial recognition and maturity of the financial instruments. Any gain/ loss on modification is charged to Standalone Statement of Profit and Loss.

2.7 Tax expense Income tax

Income tax expense comprises current tax and deferred tax.

Current Tax

The Company has elected to exercise option available under section 115BAA of the Income Tax Act, 1961.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date.

Current tax relating to items recognised outside the Standalone Statement of Profit and Loss is recognised outside the statement of 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.

Deferred Tax

Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case, the deferred tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax liabilities are recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from initial recognition of goodwill; or initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits to the extent that it is probable that taxable profit will be available against which those temporary differences, losses and tax credit can be utilised, except when deferred tax asset on deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination

and at the time of the transaction, affects neither accounting profit nor taxable profit or loss.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rules and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset, where company has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

2.8 Impairment

Financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. A financial asset is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or that can be reliably estimated.

The Company recognises 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 impairment loss allowance (or reversal) recognised during the year is recognised as income / expense in the Standalone Statement of Profit and Loss.

Non-financial assets

recognised if, the carrying amount of these assets/

cash generating units exceeds their recoverable amount. The recoverable amount is greater of fair value less cost of disposal and their value in use. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Standalone Statement of Profit and Loss.

2.9 Lease

Company as lessee

The Companyâs lease asset classes primarily consist of leases for showrooms, workshops, plant and equipment and stockyards. 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 of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use (âROUâ) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The ROU assets are initially recognised 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 amortisation and impairment losses.

ROU 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.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

Company as lessor

2.10 Borrowing costs

Borrowing cost includes interest and other costs

that company has incurred in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.

All other borrowing costs are expensed in the year they occur.

2.11 Employee Benefits Defined Contribution Plan

Retirement benefit in the form of provident fund, employeesâ state insurance fund scheme and Labour welfare scheme is a defined contribution scheme. The Company has no obligation, other than the contribution paid/payable under such schemes. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

Defined Benefit Plan

the Projected Unit Credit method) at the end of each year. Gratuity which is defined benefit plans is paid per month on the basis of employeeâs gross salary.

Remeasurements of the net defined benefit liability comprising actuarial gains and losses (excluding amounts included in net interest on the net defined benefit liability), are recognised in Other Comprehensive Income. Such remeasurements are not reclassified to the Standalone Statement of Profit and Loss in the subsequent periods.

Compensated absences are not to be carried forward beyond 12 months and are paid per month on the basis of the employeeâs gross salary.

2.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss. Contingent liabilities are not recognised but disclosed unless the probability of an outflow of resources is remote. Contingent assets are disclosed where inflow of economic benefits is probable. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.13 Cash and cash equivalent

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, balances with payment gateways and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.

2.14 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of shares outstanding during the year adjusted for the effects of all dilutive potential equity shares.

2.15 Inventories

Inventories are valued at lower of cost and net realisable value. Cost is determined as follows:

i) In case of cars, at specific cost on identification basis of their individual costs.

ii) In case of spares and others, the same are valued at weighted average basis.

Costs includes all non refundable duties and taxes and all other charges incurred in bringing the inventory to their present location and condition. Net realisable value is the estimated selling price less estimated cost necessary to make the sale.

2.16 Segment Reporting

An operating segment is component of the Company that engages in the business activity from which the Company earns revenues and incurs expenses, for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker (CODM), in deciding about resources to be allocated to the segment and assess its performance. The Companyâs chief operating decision maker is the chairman of the Company.

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on a reasonable basis have been included under âunallocated revenue / expenses / assets / liabilitiesâ.

2.17 Cash Flow Statement

Cash flows are reported using indirect method whereby profit for the period is adjusted for the effects of the transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts and payments and items of income or expenses associated with investing and financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2.18 Events after reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

2.19 Share-based payment

Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions. The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.

That cost is recognised, together with a corresponding increase in share-based payment reserves in equity, over the period in which the service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and Companyâs best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Standalone Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

No expense is recognised for awards that do not ultimately vest because service conditions have not been met. When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

2.20 Business Combinations

Business combinations are accounted for using the acquisition method. At the acquisition date, identifiable assets acquired and liabilities assumed are measured at fair value. The consideration transferred is measured at fair value at acquisition date and includes the fair value of any contingent consideration.

Where the consideration transferred exceeds the fair value of the net identifiable assets acquired and liabilities assumed, the excess is recorded as goodwill. In case of business combinations involving entities under common control, the same is accounted for using the pooling of interests method. The net assets of the transferor entity or business are accounted at their carrying amounts on the date of the acquisition subject to necessary adjustments required to harmonise accounting policies.

2.21 Current versus 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:

- Expected to be realised or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- 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. A liability is current when:

- It is expected to be settled in normal operating cycle; or

- It is held primarily for the purpose of trading; or

- 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.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The Company has identified twelve months as its operating cycle.

AMENDED STANDARDS ADOPTED BY THE COMPANY

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the preparation of the Companyâs annual financial statements for the year ended March 31, 2022, except for following amendments to the existing Indian Accounting Standards (Ind AS). The Company applied those amendments, for the accounting periods beginning on or after April 01, 2022, however those do not have material impact on the financial statements of the Company.

Ind AS 16 - Property, plant and equipment

The excess of net sale proceeds of items produced over the cost of testing, if any, should not be recognised in the statement of profit or loss but deducted from the directly attributable costs considered as part of cost of an item of Property, Plant and Equipment.

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets

Amendments clarify the types of costs a company can include as the âcosts of fulfilling a contractâ while assessing whether a contract is onerous as under:

- The incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.

Ind AS 103 - Business Combinations

Amendments have substituted the reference to the Framework for Preparation and Presentation of Financial Statements with Indian Accounting Standards with the reference to the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework), without changing the accounting requirements for business combinations.

I nd AS 101 - First-time Adoption of Indian Accounting Standards

If a subsidiary, joint venture of associate (together termed as subsidiary) adopts Ind AS later than its parent and applies paragraph D16(a) of Ind AS 101, then the subsidiary may elect to measure cumulative translation differences for all foreign operations at amounts included in the consolidated financial statements of the parent, based on the parentâs date of transitions to Ind AS.

Ind AS 109 - Financial Instruments

For the purpose of performing the â10 % testâ for derecognition of financial liabilities, in determining fees

paid, the borrower includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the otherâs behalf.

Ind AS 41 - Agriculture

The amendment removes the requirement to exclude cash flows for taxation when measuring fair value and thereby aligns the fair value measurement requirements in Ind AS 41 with those in Ind AS 113, Fair Value Measurement.

The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

STANDARDS THAT BECAME ISSUED BUT NOT EFFECTIVE DURING THE YEAR

The amendments to the below mentioned standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, as and when they become effective. The Ministry of Corporate Affairs (MCA) has notified certain amendments to Ind AS, through Companies (Indian Accounting Standards) Amendment Rules, 2023 on March 31,2023. These amendments maintain convergence with IFRS by incorporating amendments issued by International Accounting Standards Board (IASB) into Ind AS and has amended the following standards:

1. Ind AS 101 - First-time adoption of Ind AS

2. Ind AS 102 - Share Based Payment

3. Ind AS 103 - Business Combinations

4. Ind AS 107 - Financial Instruments - Disclosures

5. Ind AS 109 - Financial Instruments

6. Ind AS 115 - Revenue from Contracts with Customers

7. Ind AS 1 - Presentation of Financial Statements

8. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

9. Ind AS 12 - Income Taxes

10. Ind AS 34 - Interim Financial Reporting

These amendments shall come into force with effect from April 01,2023.

The Company is assessing the potential effect of the amendments on its financial statements. The Company will adopt these amendments, if applicable, from applicability date.

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