A Oneindia Venture
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Accounting Policies of TAAL Tech Ltd. Company
Mar 31, 2025
2 Significant accounting policies
Significant accounting policies adopted by the Company
are as under:
2.1 Basis of preparation of Financial Statements
(a) Statement of compliance with Ind AS
These standalone financial statements have been
prepared in accordance with Indian Accounting
Standards (Ind AS) notified under Section 133
of the Companies Act, 2013 (the "Act") read with
the Companies (Indian Accounting Standards)
Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016.
Accounting policies have been consistently applied
to all the years presented except where a newly
issued accounting standard is initially adopted or a
revision to an existing accounting standard requires
a change in the accounting policy hitherto in use.
(b) Basis of measurement
The standalone financial statements have been
prepared on a historical cost convention on accrual
basis, except for items that have been measured at
fair value as required by relevant Ind AS.
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.
An liability is current when:
? It is expected to be settled in normal operating
cycle;
? It is held primarily for the purpose of trading;
? 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.
The Company has ascertained its operating cycle
as twelve months for the purpose of current or non¬
current classification of assets and liabilities.
(c) Use of estimates
The preparation of standalone financial statements
in conformity with Ind AS requires the Management
to make estimates and assumptions that affect
the reported amount of assets and liabilities as
at the Balance Sheet date, reported amount of
revenue and expenses for the year and disclosures
of contingent liabilities as at the Balance Sheet
date. The estimates and assumptions used in the
accompanying standalone financial statements are
based upon the Management''s evaluation of the
relevant facts and circumstances as at the date of
the standalone financial statements. Actual results
could differ from these estimates. Estimates and
underlying assumptions are reviewed on a periodic
basis. Revisions to accounting estimates, if any,
are recognised in the year in which the estimates
are revised and in any future years affected. Refer
note 3 for detailed discussion on estimates and
judgments.
2.2 Business combination and goodwill
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to
each of the Company''s cash-generating units that are
expected to benefit from the combination, irrespective
of whether other assets or liabilities of the acquiree are
assigned to those units.
A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may
be impaired. If the recoverable amount of the cash¬
generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to
the other assets of the unit pro-rata based on the carrying
amount of each asset in the unit. Any impairment loss for
goodwill is recognised in profit or loss. An impairment loss
recognised for goodwill is not reversed in subsequent
periods.
Where goodwill has been allocated to a cash-generating
unit and part of the operation within that unit is disposed
off, the goodwill associated with the disposed operation
is included in the carrying amount of the operation
when determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured based on
the relative values of the disposed operation and the
portion of the cash-generating unit retained.
2.3 Property, plant and equipments
a) Property, plant and equipments are stated at their
original cost of acquisition or construction less
accumulated depreciation and impairment loss,
if any. The cost of property, plant and equipments
comprises of its purchase price including duties,
taxes, freight and any other directly attributable cost
of bringing the asset to its working condition for its
intended use. However, cost excludes Excise duty,
VAT, GST and Service tax, wherever credit of the
duty or tax is availed of.
All indirect expenses incurred during acquisition
/ construction of property, plant and equipments
including interest cost on funds deployed for the
property, plant and equipments are treated as
incidental expenditure and are capitalised for
the period until the asset is ready for its intended
use. Subsequent costs are included in the assets
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably.
The carrying amount of any component accounted
for as a separate asset is de-recognised when
replaced. All other repairs and maintenance are
charged to the Statement of Profit and Loss during
the year in which they are incurred.
b) Advances paid towards the acquisition of property,
plant and equipments outstanding at each Balance
Sheet date is classified as capital advances under
other non-current assets and the cost of assets not
put to use before such date are disclosed under
''Capital work-in-progress''. Property, plant and
equipments received from Taneja Aerospace and
Aviation Limited pursuant to Demerger of its âAir
Charter Businessâ are recorded at its book value as
on the appointed date.
Depreciation methods, estimated useful lives
In case of company, depreciation is provided on
straight line method on Computer - Hardware and
on written down value method on Office Equipments
and Furniture and Fixtures, based on the useful lives
of assets as prescribed under Part C of Schedule II
of the Companies Act, 2013.
Depreciation on addition to property, plant and
equipments is provided on pro-rata basis from the
date of acquisition. Depreciation on sale / deduction
from property, plant and equipments is provided upto
the date preceding the date of sale / deduction as
the case may be. Gains and losses on disposals are
determined by comparing proceeds with carrying
amount. These are included in the Statement of
Profit and Loss under ''Other Income''.
Depreciation methods, useful lives and residual
values are reviewed periodically at each financial
year end and adjusted prospectively, as appropriate.
2.4 Intangible assets
An intangible asset is recognised when it is probable
that the future economic benefits attributable to the
asset will flow to the enterprise and where its cost can
be reliably measured. Intangible assets are stated at
cost of acquisition less accumulated amortization and
impairment losses, if any. Cost comprises the purchase
price and any cost attributable to bringing the assets to
its working condition for its intended use which includes
taxes, freight, and installation and allocated incidental
expenditure during construction / acquisition and
exclusive of CENVAT credit or other tax credit available
to the Company.
Subsequent expenditure relating to intangible assets
is capitalised only if such expenditure results in an
increase in the future benefits from such asset beyond
its previously assessed standard of performance.
Intangibles assets are amortized over a period of three
financial years starting with the year in which these
assets are procured.
2.5 Foreign currency transactions
(a) Functional and presentation currency
Items included in the standalone financial statements
are measured using the currency of the primary
economic environment in which the entity operates
(''the functional currency''). The standalone financial
statements are presented in Indian Rupee (INR),
which is the Company''s functional and presentation
currency.
Foreign currency transactions are recorded in the
reporting currency by applying the exchange rate
between the reporting currency and the foreign
currency at the date of the transaction.
(b) Transactions and balances
On initial recognition, all foreign currency
transactions are recorded by applying to the foreign
currency amount the exchange rate between the
functional currency and the foreign currency at the
date of the transaction. Gains / (Losses) arising out
of fluctuation in foreign exchange rate between the
transaction date and settlement date are recognised
in the Statement of Profit and Loss.
All monetary assets and liabilities in foreign
currencies are re-stated at the year end at the
exchange rate prevailing at the year end and
the exchange differences are recognised in the
Statement of Profit and Loss.
Non-monetary items which are carried in terms of
historical cost denominated in a foreign currency
are reported using the exchange rate at the date
of the transaction; non-monetary items which
are carried at fair value or other similar valuation
denominated in a foreign currency are reported
using the exchange rates that existed when such
values were determined.
The assets and liabilities of foreign operations are
translated into INR at the rate of exchange prevailing
at the reporting date and their Statements of Profit or
Loss are translated at exchange rates prevailing at
the dates of the transactions. For practical reasons,
the Company uses an average rate to translate
income and expense items, if the average rate
approximates the exchange rates at the dates of the
transactions. The exchange differences arising on
translation for consolidation are recognised in OCI.
On disposal of a foreign operation, the component
of OCI relating to that particular foreign operation is
recognised in profit or loss.
2.6 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 is based on the presumption
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
accessible to the Company.
Company uses valuation techniques that are appropriate
in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of
relevant observable inputs and minimizing the use of
unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorized within the fair value hierarchy, described as
follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
? Level 1 â Quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
? Level 2 â Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable;
? Level 3 â Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.
2.7 Revenue recognition
Effective April 1, 2018 the Company adopted Ind AS
115 - âRevenue from Contracts with Customersâ using
the cumulative catch-up transition method applied to
contracts that were not completed as of April 1, 2018.
In accordance with the cumulative catch-up transition
method , the comparatives have not been retrospectively
adjusted. The following is a summary of new and / or
revised significant accounting policies related to revenue
recognition.
Revenue is recognized upon transfer of control of
promised goods and services to the customers in an
amount that reflects the consideration we expect to
receive in exchange for those goods and services and
where there is no uncertainty as to measurement or
collectability of consideration.
Charter income from aircraft given on charter is booked
on the basis of contract with customers and on completion
of actual flying hours of the aircraft.
Revenue from time and material service contracts is
recognized pro-rata over the period of the contract as
and when services are rendered and the collectability is
reasonably assured.
Revenue from long-term fixed price, fixed time frame
contracts where the performance obligations are satisfied
over time and there is no uncertainty as to measurement
or collectability of consideration is recognized as per
the percentage-of-completion method or the completion
method, whichever best depicts measurement of the
progress in transferring control to the customer and billed
in terms of the agreement with and certification by the
customer.
The Company accounts for volume discounts and pricing
incentives to customers as a reduction of revenue based
on the ratable allocation of the discounts / incentives
to each of the underlying performance obligation that
corresponds to the progress by the customer towards
earning the discounts / incentives. Also, when the level
of discount varies with increases in levels of revenue
transactions, the Company recognizes the liability based
on its estimate of the customer''s future purchases. If it
is probable that the criteria for the discount will not be
met or if the amount thereof cannot be estimated reliably,
then discount is not recognized until the payment is
probable and the amount can be estimated reliably. The
Company recognizes changes in the estimated amount
of obligations for discounts in the period in which the
change occurs. The discounts are passed on to the
customer either as direct payments or as a reduction of
payments due from the customer.
The Company presents revenues net of indirect taxes in
its Statement of Profit and loss.
Revenue recognized in excess of billings is classified
as contract assets (Unbilled revenue) included in other
current financial assets.
Billings in excess of revenue recognized is classified as
contract liabilities (Deferred revenue) included in other
current liabilities.
The impact of applying Ind AS 115 - âRevenue from
Contract with Customersâ instead of the erstwhile Ind
AS 18 Revenue on the financials statements of the
Company for the year ended and as at March 31, 2025 is
not significant.
Other Income
Interest income is recognized on the basis of effective
interest method as set out in Ind AS 109 - "Financial
Instruments", and where no significant uncertainty as
to measurability or collectability exists. Claims towards
insurance claims are accounted in the year of settlement
and / or in the year of acceptance of claim / certainty
of realization as the case may be. Dividend income
is recognized when the right to receive payment is
established.
2.8 Taxes
Tax expense for the year comprising current tax, deferred
tax and minimum alternate tax credit are included in the
determination of the net profit or loss for the year.
(a) Current income-tax
Current tax assets and liabilities are measured at
the amount expected to be recovered or paid to the
taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the year end date. Current
tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
(b) Deferred tax
Deferred income-tax is provided in full, using the
Balance Sheet approach, on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amounts in standalone
financial statements. Deferred income-tax is also
not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than
a business combination that at the time of the
transaction affects neither accounting profit nor
taxable profit (tax loss). Deferred income-tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the end
of the year and are expected to apply when the
related deferred income-tax asset is realised or the
deferred income-tax liability is settled.
Deferred tax assets are recognized for all deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will be
available to utilize those temporary differences and
losses.
Management periodically evaluates positions taken
in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax
authorities.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority.
Current and deferred tax is recognised in the
Statement of Profit and Loss, except to the extent that
it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is
also recognised in other comprehensive income or
directly in equity, respectively.
(c) Minimum alternate tax
Minimum Alternate Tax (MAT) under the provisions
of the Income Tax Act, 1961 is recognised as current
tax in the Statement of Profit and Loss. The credit
available under the Act in respect of MAT paid is
recognized as asset only when and to the extent
there is convincing evidence that the Company
will pay normal income-tax during the period for
which the MAT credit can be carried forward for
set-off against the normal tax liability. MAT credit
recognized as an asset is reviewed at each Balance
Sheet date and written down to the extent the
aforesaid convincing evidence no longer exists.
2.9 Leases
As a lessee
Leases in which a significant portion of the risks and
rewards of ownership are not transferred to the Company
as a lessee are classified as operating leases. Payments
made under operating leases (net of any incentives
received from the lessor) are charged to the Statement of
Profit and Loss on a straight-line basis over the period of
the lease unless the payments are structured to increase
in line with expected general inflation to compensate for
the lessor''s expected inflationary cost increases.
Also initial direct cost incurred in operating lease such as
commissions, legal fees and internal costs is recognised
immediately in the Statement of Profit and Loss.
Where the Company, as lessee, has substantially
transferred all the risks and rewards of ownership
are classified as finance leases. Finance leases are
capitalized at the lease''s inception at the fair value of
the leased property or, if lower, the present value of the
minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in
borrowings or other financial liabilities as appropriate.
Each lease payment is allocated between the liability
and finance cost. The finance cost is charged to the
Statement of Profit and Loss over the lease period so
as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
2.10 Impairment of non-financial assets
The Company assesses at each year end whether there
is any objective evidence that a non-financial asset or
a group of non-financial assets is impaired. If any such
indication exists, the Company estimates the asset''s
recoverable amount and the amount of impairment loss.
An impairment loss is calculated as the difference
between an assets carrying amount and recoverable
amount. Losses are recognised in the Statement of Profit
and Loss and reflected in an allowance account. When the
Company considers that there are no realistic prospects
of recovery of the asset, the relevant amounts are written
off. If the amount of impairment loss subsequently
decreases and the decrease can be related objectively to
an event occurring after the impairment was recognised
then the previously recognised impairment loss is
reversed through the Statement of Profit and Loss.
The recoverable amount of an asset or cash-generating
unit is the greater of its value-in-use and its fair value less
costs to sell. In assessing value-in-use, the estimated
future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment
testing, assets are Companyed together into the smallest
Company of assets that generates cash inflows from
continuing use that are largely independent of the cash
inflows of other assets or Companys of assets (the âcash¬
generating unitâ).
Mar 31, 2024
2 Material accounting policies
Material accounting policies adopted by the Company are as under:
2.1 Basis of preparation of Financial Statements
(a) Statement of compliance with Ind AS
These standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the "Act") read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
(b) Basis of measurement
The standalone financial statements have been prepared on a historical cost convention on accrual basis, except for items that have been measured at fair value as required by relevant Ind AS.
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.
An liability is current when:
? It is expected to be settled in normal operating cycle;
? It is held primarily for the purpose of trading;
? 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.
The Company has ascertained its operating cycle as twelve months for the purpose of current or noncurrent classification of assets and liabilities.
(c) Use of estimates
The preparation of standalone financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying standalone financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the standalone financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognised in the year in which the estimates are revised and in any future years affected. Refer note 3 for detailed discussion on estimates and judgments.
2.2 Business combination and goodwill
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company''s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cashgenerating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed off, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
2.3 Property, plant and equipments
a) Property, plant and equipments are stated at their original cost of acquisition or construction less accumulated depreciation and impairment loss, if any. The cost of property, plant and equipments comprises of its purchase price including duties, taxes, freight and any other directly attributable cost of bringing the asset to its working condition for its intended use. However, cost excludes Excise duty, VAT, GST and Service tax, wherever credit of the duty or tax is availed of.
All indirect expenses incurred during acquisition / construction of property, plant and equipments including interest cost on funds deployed for the property, plant and equipments are treated as incidental expenditure and are capitalised for the period until the asset is ready for its intended use. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is de-recognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the year in which they are incurred.
b) Advances paid towards the acquisition of property, plant and equipments outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not
put to use before such date are disclosed under ''Capital work-in-progress''. Property, plant and equipments received from Taneja Aerospace and Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value as on the appointed date.
Depreciation methods, estimated useful lives
In case of company, depreciation is provided on straight line method on Computer - Hardware and on written down value method on Office Equipments and Furniture and Fixtures, based on the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013.
Depreciation on addition to property, plant and equipments is provided on pro-rata basis from the date of acquisition. Depreciation on sale / deduction from property, plant and equipments is provided upto the date preceding the date of sale / deduction as the case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss under ''Other Income''.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as appropriate.
2.4 Intangible assets
An intangible asset is recognised when it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses, if any. Cost comprises the purchase price and any cost attributable to bringing the assets to its working condition for its intended use which includes taxes, freight, installation and allocated incidental expenditure during construction / acquisition and exclusive of CENVAT credit or other tax credit available to the Company.
Subsequent expenditure relating to intangible assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Intangibles assets are amortized over a period of three financial years starting with the year in which these assets are procured.
2.5 Foreign currency transactions
(a) Functional and presentation currency
Items included in the standalone financial statements are measured using the currency of the primary
economic environment in which the entity operates (''the functional currency''). The standalone financial statements are presented in Indian Rupee (INR), which is the Company''s functional and presentation currency.
Foreign currency transactions are recorded in the reporting currency by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(b) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains / (Losses) arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.
All monetary assets and liabilities in foreign currencies are re-stated at the year end at the exchange rate prevailing at the year end and the exchange differences are recognised in the Statement of Profit and Loss.
Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when such values were determined.
The assets and liabilities of foreign operations are translated into INR at the rate of exchange prevailing at the reporting date and their Statements of Profit or Loss are translated at exchange rates prevailing at the dates of the transactions. For practical reasons, the Company uses an average rate to translate income and expense items, if the average rate approximates the exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss.
2.6 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 is based on the presumption 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 accessible to the Company.
Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
? Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
? Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
? Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
2.7 Revenue recognition
Effective April 1, 2018 the Company adopted Ind AS 115 - "Revenue from Contracts with Customers" using the cumulative catch-up transition method applied to contracts that were not completed as of April 1, 2018. In accordance with the cumulative catch-up transition method, the comparatives have not been retrospectively adjusted. The following is a summary of new and / or revised material accounting policies related to revenue recognition.
Revenue is recognized upon transfer of control of promised goods and services to the customers in an amount that reflects the consideration we expect to receive in exchange for those goods and services and where there is no uncertainty as to measurement or collectability of consideration.
Charter income from aircraft given on charter is booked on the basis of contract with customers and on completion of actual flying hours of the aircraft.
Revenue from time and material service contracts is recognized pro-rata over the period of the contract as and when services are rendered and the collectability is reasonably assured.
Revenue from long-term fixed price, fixed time frame contracts where the performance obligations are satisfied over time and there is no uncertainty as to measurement or collectability of consideration is recognized as per
the percentage-of-completion method or the completion method, whichever best depicts measurement of the progress in transferring control to the customer and billed in terms of the agreement with and certification by the customer.
The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts / incentives to each of the underlying performance obligation that corresponds to the progress by the customer towards earning the discounts / incentives. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer''s future purchases. If it is probable that the criteria for the discount will not be met or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.
The Company presents revenues net of indirect taxes in its Statement of Profit and loss.
Revenue recognized in excess of billings is classified as contract assets (Unbilled revenue) included in other current financial assets.
Billings in excess of revenue recognized is classified as contract liabilities (Deferred revenue) included in other current liabilities.
Other Income
Interest income is recognized on the basis of effective interest method as set out in Ind AS 109 - "Financial Instruments", and where no significant uncertainty as to measurability or collectability exists. Claims towards insurance claims are accounted in the year of settlement and / or in the year of acceptance of claim / certainty of realization as the case may be. Dividend income is recognized when the right to receive payment is established.
2.8 Taxes
Tax expense for the year comprising current tax, deferred tax and minimum alternate tax credit are included in the determination of the net profit or loss for the year.
(a) Current income-tax
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the year end date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(b) Deferred tax
Deferred income-tax is provided in full, using the Balance Sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in standalone financial statements. Deferred income-tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income-tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income-tax asset is realised or the deferred income-tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(c) Minimum alternate tax
Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognized as asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the period for which the MAT credit can be carried forward for
set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
2.9 Leases
As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as a lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
Also initial direct cost incurred in operating lease such as commissions, legal fees and internal costs is recognised immediately in the Statement of Profit and Loss.
Where the Company, as a lessee, has substantially transferred all the risks and rewards of ownership leases are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
2.10 Impairment of non-financial assets
The Company assesses at each year end whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the asset''s recoverable amount and the amount of impairment loss.
An impairment loss is calculated as the difference between an assets carrying amount and recoverable amount. Losses are recognised in the Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.
The recoverable amount of an asset or cash-generating unit is the greater of its value-in-use and its fair value less costs to sell. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcashgenerating unitâ).
Mar 31, 2023
1 General information
TAAL Enterprises Limited (âTELâ or âthe Companyâ) is a public limited company incorporated in India under the Companies Act, 2013. TEL was earlier a wholly owned subsidiary of Taneja Aerospace and Aviation Limited (TAAL). However, pursuant to approval of the Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 between TAAL & TEL, the Air Charter business of TAAL including investment in First Airways Inc, USA and Engineering Design Services business conducted through TAAL Tech India Private Ltd. has been demerged into TEL w.e.f. October 1, 2014 and TEL has seized to be a subsidiary of TAAL. Its principal business activity is providing Aircraft Charter Services.
2 Significant accounting policies
Significant accounting policies adopted by the Company are as under:
2.1 Basis of preparation of Financial Statements
(a) Statement of compliance with Ind AS
These standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
(b) Basis of measurement
The standalone financial statements have been prepared on a historical cost convention on accrual basis, except for items that have been measured at fair value as required by relevant Ind AS.
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.
An liability is current when:
? It is expected to be settled in normal operating cycle;
? It is held primarily for the purpose of trading;
? 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.
The Company has ascertained its operating cycle as twelve months for the purpose of current or noncurrent classification of assets and liabilities.
(c) Use of estimates
The preparation of standalone financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying standalone financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the standalone financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognised in the year in which the estimates are revised and in any future years affected. Refer note 3 for detailed discussion on estimates and judgments.
2.2 Business combination and goodwill
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company''s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed off, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
2.3 Property, plant and equipments
a) Property, plant and equipments are stated at their original cost of acquisition or construction less accumulated depreciation and impairment loss, if any. The cost of property, plant and equipments comprises of its purchase price including duties, taxes, freight and any other directly attributable cost of bringing the asset to its working condition for its intended use. However, cost excludes Excise duty, VAT, GST and Service tax, wherever credit of the duty or tax is availed of.
All indirect expenses incurred during acquisition / construction of property, plant and equipments including interest cost on funds deployed for the property, plant and equipments are treated as incidental expenditure and are capitalised for the period until the asset is ready for its intended use. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is de-recognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the year in which they are incurred.
b) Advances paid towards the acquisition of property, plant and equipments outstanding at each Balance Sheet date is classified as capital advances under
other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''. Property, plant and equipments received from Taneja Aerospace and Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value as on the appointed date.
Depreciation methods, estimated useful lives
In case of company, depreciation is provided on straight line method on Computer - Hardware and on written down value method on Office Equipments and Furniture and Fixtures, based on the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013.
Depreciation on addition to property, plant and equipments is provided on pro-rata basis from the date of acquisition. Depreciation on sale / deduction from property, plant and equipments is provided upto the date preceding the date of sale / deduction as the case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss under ''Other Income''.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as appropriate.
An intangible asset is recognised when it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses, if any. Cost comprises the purchase price and any cost attributable to bringing the assets to its working condition for its intended use which includes taxes, freight, and installation and allocated incidental expenditure during construction / acquisition and exclusive of CENVAT credit or other tax credit available to the Company.
Subsequent expenditure relating to intangible assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Intangibles assets are amortized over a period of three financial years starting with the year in which these assets are procured.
2.5 Foreign currency transactions
(a) Functional and presentation currency
Items included in the standalone financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The standalone financial statements are presented in Indian Rupee (INR), which is the Company''s functional and presentation currency.
Foreign currency transactions are recorded in the reporting currency by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(b) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains / (Losses) arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.
All monetary assets and liabilities in foreign currencies are re-stated at the year end at the exchange rate prevailing at the year end and the exchange differences are recognised in the Statement of Profit and Loss.
Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when such values were determined.
The assets and liabilities of foreign operations are translated into INR at the rate of exchange prevailing at the reporting date and their Statements of Profit or Loss are translated at exchange rates prevailing at the dates of the transactions. For practical reasons, the Company uses an average rate to translate income and expense items, if the average rate approximates the exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss.
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 is based on the presumption 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 accessible to the Company.
Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
? Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
? Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
? Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Effective April 1, 2018 the Company adopted Ind AS 115 - âRevenue from Contracts with Customersâ using the cumulative catch-up transition method applied to contracts that were not completed as of April 1, 2018. In accordance with the cumulative catch-up transition method , the comparatives have not been retrospectively adjusted. The following is a summary of new and / or revised significant accounting policies related to revenue recognition.
Revenue is recognized upon transfer of control of promised goods and services to the customers in an amount that reflects the consideration we expect to receive in exchange for those goods and services and where there is no uncertainty as to measurement or collectability of consideration.
Charter income from aircraft given on charter is booked on the basis of contract with customers and on completion of actual flying hours of the aircraft.
Revenue from time and material service contracts is recognized pro-rata over the period of the contract as and when services are rendered and the collectability is reasonably assured.
Revenue from long-term fixed price, fixed time frame contracts where the performance obligations are satisfied over time and there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage-of-completion method or the completion method, whichever best depicts measurement of the progress in transferring control to the customer and billed in terms of the agreement with and certification by the customer.
The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts / incentives to each of the underlying performance obligation that corresponds to the progress by the customer towards earning the discounts / incentives. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customer''s future purchases. If it is probable that the criteria for the discount will not be met or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.
The Company presents revenues net of indirect taxes in its Statement of Profit and loss.
Revenue recognized in excess of billings is classified as contract assets (Unbilled revenue) included in other current financial assets.
Billings in excess of revenue recognized is classified as contract liabilities (Deferred revenue) included in other current liabilities.
The impact of applying Ind AS 115 - âRevenue from Contract with Customersâ instead of the erstwhile Ind AS 18 Revenue on the financials statements of the Company for the year ended and as at March 31, 2023 is not significant.
Interest income is recognized on the basis of effective interest method as set out in Ind AS 109 - âFinancial Instrumentsâ, and where no significant uncertainty as to measurability or collectability exists. Claims towards insurance claims are accounted in the year of settlement and / or in the year of acceptance of claim / certainty of realization as the case may be. Dividend income is recognized when the right to receive payment is established.
Tax expense for the year comprising current tax, deferred tax and minimum alternate tax credit are included in the determination of the net profit or loss for the year.
(a) Current income-tax
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the year end date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(b) Deferred tax
Deferred income-tax is provided in full, using the Balance Sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in standalone financial statements. Deferred income-tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income-tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income-tax asset is realised or the deferred income-tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(c) Minimum alternate tax
Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognized as asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as a lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
Also initial direct cost incurred in operating lease such as commissions, legal fees and internal costs is recognised immediately in the Statement of Profit and Loss.
Where the Company, as lessee, has substantially transferred all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
2.10 Impairment of non-financial assets
The Company assesses at each year end whether there is any objective evidence that a non-financial asset or a Company of non-financial assets is impaired. If any such indication exists, the Company estimates the asset''s recoverable amount and the amount of impairment loss.
An impairment loss is calculated as the difference between an assets carrying amount and recoverable amount. Losses are recognised in the Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.
The recoverable amount of an asset or cash-generating unit is the greater of its value-in-use and its fair value less costs to sell. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are Companyed together into the smallest Company of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Companys of assets (the âcash-generating unitâ).
2.11 Provisions and contingent liabilities
Provisions are recognized when there is a present obligation 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 there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.
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 recognized as a finance cost.
De-commissioning costs (if any), are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognized as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the de-commissioning liability. The unwinding
of the discount is expensed as incurred and recognised in the Statement of Profit and Loss as a finance cost. The estimated future costs of de-commissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognised nor disclosed in the standalone financial statements.
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of the assets upto the date the asset is ready for its intended use. All other borrowing costs are recognized as an expense in the Statement of Profit and Loss in the year in which they are incurred.
2.13 Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at banks, cash on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, cash in banks and short-term deposits net of bank overdraft.
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate are expensed. When the grant relates to an asset,
it is recognized as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants of non-monetary assets, the asset and the grants are recorded at fair value amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual instalments.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(a) Financial assets
(i) Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or
b) at fair value through other comprehensive income; or
c) at fair value through profit or loss.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the Effective Interest Rate method (EIR).
Fair Value Through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at Fair
Value Through Other Comprehensive Income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in Statement of Profit and Loss. When the financial asset is de-recognized, the cumulative gain or loss previously recognized in OCI is re-classified from equity to the Statement of Profit and Loss and recognized in other gains / (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair Value Through Profit or Loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.
(iii) Impairment of financial assets
In accordance with Ind AS 109 - âFinancial Instrumentsâ, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.
For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, twelve months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on twelve months ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The twelve months ECL is a portion of the lifetime ECL which results from default events that are possible within twelve months after the year end.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required
to consider all contractual terms of the financial instrument (including pre-payment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 30 days past due.
An impairment analysis is performed at each reporting date on an individual basis for major clients. It is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the Company estimates the provision at the reporting date.
(iv) De-recognition of financial assets
A financial asset is de-recognised only when:
a) the rights to receive cash flows from the financial asset is transferred; or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is de-recognised only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in the Statement of Profit and Loss when the liabilities are de-recognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.
(iii) De-recognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability 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 and Loss as finance costs.
(c) Embedded derivatives
An embedded derivative is a component of a hybrid (combined) instrument that also includes a nonderivative host contract - with the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. Derivatives embedded in all other host contract are separated if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host and are measured at fair value through profit or loss. Embedded derivatives closely related to the host contracts are not separated.
Re-assessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a re-classification of a financial asset out of the fair value through profit or loss.
(d) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
(a) Short-term obligations
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within twelve months after the end of the year in which the employees render the related service are recognized in respect of employees'' services upto the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
(b) Other long-term employee benefit obligations
(i) Defined contribution plan
The Company makes defined contribution to provident fund and superannuation fund, which are recognized as an expense in the Statement of Profit and Loss on accrual basis. The Company has no further obligations under these plans beyond its monthly contributions.
(ii) Defined benefit plans
The Company''s liabilities under Payment of Gratuity Act and long-term compensated absences are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method, except for short-term compensated absences, which are provided on actual basis. Actuarial losses / gains are recognised in the other comprehensive income in the year in which they arise. Obligations are measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the Balance
Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.
(iii) Leave encashment - Encashable
Accumulated compensated absences, which are expected to be availed or encashed within twelve months from the end of the year are treated as short-term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.
Accumulated compensated absences, which are expected to be availed or encashed beyond twelve months from the end of the year end are treated as other long-term employee benefits. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses / gains are recognized in the Statement of Profit and Loss in the year in which they arise.
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders of parent company by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit or loss for the year attributable to equity shareholders of parent company after deducting preference dividends and any attributable tax thereto for the year (if any). The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders of parent company and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company''s operating businesses are organised and managed separately according to the nature of services provided, with each segment representing a strategic business unit that offers different services and serves different markets. Thus, as defined in Ind AS 108 - âOperating Segmentsâ, the business segments are ''Air Charter''. The Company does not have any geographical segment.
When the entity prepares separate financial statements, it accounts for investments in subsidiaries, joint ventures and associates either:
(a) at cost; or
(b) in accordance with Ind AS 109.
The Company accounts for its investment in subsidiary at cost.
Investments acquired from Taneja Aerospace and Aviation Limited pursuant to Demerger of its âAir Charter Business'' are recorded at its book value i.e cost as on the appointed date, less impairment if any.
All amounts disclosed in standalone financial statements and notes have been rounded off to the nearest lakhs as per requirement of Schedule III of the Act, unless otherwise stated.
3 Significant accounting judgments, estimates and assumptions
The preparation of standalone financial statements requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, 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 years.
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(a) Defined benefits and other long-term benefits
The cost of the defined benefit plans such as gratuity and leave encashment are determined using actuarial valuations. 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 the 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 reviewed at each year end.
The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long-term basis.
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023
(a) Ind AS 1 - Presentation of Financials Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
(b) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
This amendment has introduced a definition of ''accounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
(c) Ind AS 12 - Income Taxes
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements
Mar 31, 2018
1 Significant Accounting Policies
Significant accounting policies adopted by the Company are as under:
1.1 Basis of Preparation of Financial Statements
(a) Statement of Compliance with Ind AS
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The financial statements up to year ended 31 March 2017 were prepared in accordance with the accounting standards notified under the section 133 of the Act, read with with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
These financial statements for the year ended 31 March 2018 are the first set of financial statements prepared in accordance with Ind AS.
Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
(b) Basis of Measurement
The financial statements have been prepared on a historical cost convention on accrual basis, except for items that have been measured at fair value as required by relevant Ind AS.
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
- It is held primarily for the purpose of trading
- 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.
The Company has ascertained its operating cycle as 12 months for the purpose of current or noncurrent classification of assets and liabilities.
(c) Use of Estimates
The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Managementâs evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected. Refer note 3 for detailed discussion on estimates and judgments.
1.2 Property, Plant and Equipment
Property, plant and equipment are stated at their original cost of acquisition or construction, less accumulated depreciation and impairment loss, if any. The cost of property, plant and equipment comprises of its purchase price including duties, taxes, freight and any other directly attributable cost of bringing the asset to its working condition for its intended use. However, cost excludes Excise Duty, VAT, Service Tax and GST, wherever credit of the duty or tax is availed of.
All indirect expenses incurred during acquisition/ construction of property, plant and equipment including interest cost on funds deployed for the property, plant and equipment are treated as incidental expenditure and are capitalised for the period until the asset is ready for its intended use. Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the year in which they are incurred.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under âCapital work-in-progressâ. Property, plant and equipment received from Taneja Aerospace and Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value as on the appointed date.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1 April 2016 measured as per the Indian GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
Depreciation methods, estimated useful lives
The Company provides depreciation using Straight Line Method on Computer Hardware and on Written Down Value Method on Office Equipment and Furniture and Fixtures, based on the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013.
Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on sale/ deduction from property, plant and equipment is provided up to the date preceding the date of sale/ deduction as the case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss under âOther incomeâ.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as appropriate.
1.3 Investment in Subsidiary
When an entity prepares separate financial statements, it shall account for investments in subsidiaries, joint ventures and associates either:
(a) at cost, or
(b) in accordance with Ind AS 109.
The Company accounts for its investment in subsidiary at cost.
Investments acquired from Taneja Aerospace and Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value i.e cost as on the appointed date.
1.4 Foreign Currency Transactions
(a) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The financial statements are presented in Indian rupee (INR), which is the Companyâs functional and presentation currency.
Foreign currency transactions are recorded in the reporting currency by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(b) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/ losses arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.
All monetary assets and liabilities in foreign currencies are restated at the year end at the exchange rate prevailing at the year end and the exchange differences are recognised in the Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
1.5 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 is based on the presumption 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 accessible to the Company.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
1.6 Revenue Recognition
Revenue is recognised to the extent, that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Revenue from Sale of Services
Charter income from aircraft given on charter is booked on the basis of contract with customers and on completion of actual flying hours of the aircraft. The revenue is recognised net of Service Tax/ GST.
Other Income
Interest income is recognised on basis of effective interest method as set out in Ind AS 109 - financial Instruments, and where no significant uncertainty as to measurability or collectability exists. Claims towards insurance claims are accounted in the year of settlement and/or in the year of acceptance of claim/certainty of realization as the case may be. Dividend income is recognised when the right to receive payment is established.
1.7 Taxes
Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the year.
(a) Current income tax
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the year end date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(b) Deferred tax
Deferred income tax is provided in full, using the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in financial statements. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
1.8 Leases As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as a lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
Also initial direct cost incurred in operating lease such as commissions, legal fees and internal costs is recognised immediately in the Statement of Profit and Loss.
Where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
1.9 Impairment of Non-Financial Assets
The Company assesses at each year end whether there is any objective evidence that a non financial asset or a group of non financial assets is impaired. If any such indication exists, the Company estimates the assetâs recoverable amount and the amount of impairment loss.
An impairment loss is calculated as the difference between an assetâs carrying amount and recoverable amount. Losses are recognized in the Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ).
1.10 Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation 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 there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.
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 recognized as a finance cost.
Decommissioning costs (if any), are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognized as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized in the Statement of Profit and Loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
1.11 Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of the assets, upto the date the asset is ready for its intended use. All other borrowing costs are recognised as an expense in the Statement of Profit and Loss in the year in which they are incurred.
1.12 Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, cash in banks and short-term deposits net of bank overdraft.
1.13 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(a) Financial assets
(i) Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or
b) at fair value through other comprehensive income; or
c) at fair value through profit or loss.
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assetsâ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.
(iii) Impairment of financial assets
In accordance with Ind AS 109 - Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.
For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12 month ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the year end.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 30 days past due.
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for major clients. It is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the Company estimates the provision at the reporting date.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
a) the rights to receive cash flows from the financial asset is transferred or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in the Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.
(iii) Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability 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 derecognition 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 and Loss as finance costs.
(c) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
1.14 Employee Benefits
(a) Short-term obligations
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employeesâ services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Other long-term employee benefit obligations
(i) Defined contribution plan
The Company makes defined contribution to Provident Fund and Superannuation Fund, which are recognised as an expense in the Statement of Profit and Loss on accrual basis. The Company has no further obligations under these plans beyond its monthly contributions.
(ii) Defined benefit plans
The Companyâs liabilities under Payment of Gratuity Act and Long Term Compensated Absences are determined on the basis of actuarial valuation made at the end of each financial year using the Projected Unit Credit Method, except for short term compensated absences, which are provided on actual basis. Actuarial losses/gains are recognized in the other comprehensive income in the year in which they arise. Obligations are measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.
1.15 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. Earnings considered in ascertaining the Companyâs earnings per share is the net profit or loss for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
1.16 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker regularly monitors and reviews the operating result of the whole Company as one segment of viz. âAir Charterâ. Thus, as defined in Ind AS 108 âOperating Segmentsâ, the Companyâs entire business falls under this one operational segment and hence the necessary information has already been disclosed in the Balance Sheet and the Statement of Profit and Loss.
Mar 31, 2016
Notes forming part of the Financial Statements for the year ended March 31, 2016
Company Background
TAAL Enterprises Limited (TEL) is a public limited company incorporated in India under the Companies Act, 2013. TEL was earlier a wholly owned subsidiary of Taneja Aerospace & Aviation Limited (TAAL). However, pursuant to approval of the Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 between TAAL & TEL, the Air Charter business of TAAL including investment in First Airways Inc., USA and Engineering Design Services business conducted through TAAL Tech India P. Ltd. has been demerged into TEL w.e.f. October 1, 2014 and TEL has seized to be a subsidiary of TAAL. Its principal business activity is providing Aircraft Charter Services.
NOTE 1: Summary of significant accounting policies 1.1 Basis of Preparation of Financial Statements
The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards (AS) notified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 and other provisions of the Act, to the extent applicable. The accounting policies adopted in the preparation of financial statements have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy until now (hitherto) in use.
Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles in India.
1.2 Use of Estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could defer from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
1.3 Classification of Assets and Liabilities
Schedule III to the Companies Act, 2013 requires assets and liabilities to be classified as either Current or Non-current.
a) An asset is classified as current when it satisfies any of the following criteria:
(i) it is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realized within twelve months after the reporting date; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
b) All assets other than current assets are classified as non-current.
c) A liability is classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in the Companyâs normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within twelve months after the reporting date; or
(iv) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
d) All liabilities other than current liabilities are classified as non-current.
1.4 Operating Cycle
An operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. Based on the nature of its business, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities.
1.5 Fixed Assets
a) Fixed assets are stated at their original cost of acquisition or construction, less accumulated depreciation and impairment loss, if any. The cost of fixed assets comprises of its purchase price including duties, taxes, freight and any other directly attributable cost of bringing the asset to its working condition for its intended use. However, cost excludes Excise Duty, VAT and Service Tax, wherever credit of the duty or tax is availed of.
b) All indirect expenses incurred during acquisition/ construction of fixed assets including interest cost on funds deployed for the fixed assets are treated as incidental expenditure and are capitalized for the period until the asset is ready for its intended use.
c) Fixed assets under construction and not ready for intended use, as on the balance sheet date, are disclosed as Capital Work-in-Progress.
d) Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
e) Fixed Assets received from Taneja Aerospace & Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value as on the appointed date.
1.6 Depreciation
Depreciation is provided on Straight Line Method on Computer Hardware and on Written Down Value Method on Office Equipment and Furniture and Fixtures, based on the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013. Depreciation on addition to fixed assets is provided on pro-rata basis from the date the assets are ready for intended use. Depreciation on sale/ deletion of fixed assets is provided for up to the date of sale, deduction or discard of fixed assets as the case may be.
In case of impairment, if any, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
1.7 Impairment of Assets
At each Balance Sheet date, the Company ascertains whether there is any impairment of the fixed assets based on internal/ external factors. Where there is an indication that an asset is impaired, the recoverable amount if any, is estimated and the impairment loss is recognized to the extent carrying amount of an asset exceeds its recoverable amount. Further, if at the Balance Sheet date there is an indication that the previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the asset is reflected at recoverable amount subject to maximum of depreciable historical cost.
1.8 Inventories
The Company does not carry any inventory of raw materials, stores, spares, bought out items, work in progress and finished goods.
1.9 Investments
a) Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments.
b) Current investments are stated at lower of cost and fair value determined on an individual investment basis.
c) Non-current investments are stated at cost. A provision for diminution in the value of non-current investments is made only if such a decline is other than temporary in the opinion of the management. The determination for diminution is done separately for each individual investment.
d) Investments acquired from Taneja Aerospace & Aviation Limited pursuant to Demerger of its âAir Charter Businessâ are recorded at its book value as on the appointed date.
1.10 Trade Receivables
Trade receivables are stated after writing off debts considered as bad. Adequate provision is made for debts considered doubtful. Bad Debts previously written off and recovered during the year is credited to the Statement of Profit and Loss.
1.11 Provisions, Contingent Liabilities and Contingent Assets
a) A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management 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 management estimates.
b) Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events not wholly within the control of the Company.
c) When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
d) Contingent Assets are neither recognized nor disclosed in the financial statements.
1.12 Revenue Recognition
a) 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.
b) Charter Income from aircraft given on charter is booked on the basis of contract with customers and on completion of actual flying hours of the aircraft. The revenue is recognized net of Service Tax.
c) Interest Income is recognized on time proportion basis taking into account the amount outstanding and the interest rate applicable.
1.13 Leases
Lease arrangements where risks and rewards incident to ownership of an asset substantially vests with the less or are classified as operating lease. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.
1.14 Borrowing Costs
Borrowing Costs directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of the assets, up to the date the asset is ready for its intended use. All other borrowing costs are recognized as an expense in the Statement of Profit and Loss in the year in which they are incurred.
1.15 Foreign Currency Transactions
a) Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
b) Conversion: At the year end, monetary items denominated in foreign currencies are converted into rupee equivalents at the year-end exchange rates.
c) Exchange Differences: All exchange differences arising on settlement/conversion of foreign currency transactions are recognized as income or expense in the Statement of Profit and Loss in the year in which they arise.
d) Non monetary foreign currency items such as investments are carried at cost.
1.16 Employee Benefits
a) Defined Contribution Plan
The Company makes defined contribution to Provident Fund and Superannuation Fund, which are recognized as an expense in the Statement of Profit and Loss on accrual basis.
b) Defined Benefit Plan
The Company''s liabilities under Payment of Gratuity Act and Long Term Compensated Absences are determined on the basis of actuarial valuation made at the end of each financial year using the Projected Unit Credit Method, except for short term compensated absences, which are provided on actual basis. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligations are measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.
1.17 Provision for Taxation
Tax expense for the period, comprising Current Tax and Deferred Tax are included in the determination of the net profit or loss for the year.
Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax is recognized on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Other deferred tax assets are recognized only to the extent there is a reasonable certainty that the asset will be realized in future.
1.18 Segment Reporting
As the Company''s business activity falls within a single primary business segment, viz. "Air Charter", the disclosure requirements of Accounting Standard - 17 "Segment Reporting" is not applicable. Further, the Company does not have any geographical segment.
1.19 Contingencies and Events Occurring after the Date of Balance Sheet
a) Accounting for contingencies arising out of contractual obligation, are made only on the basis of mutual acceptances.
b) Material events occurring after the date of Balance Sheet up to the date of adoption of the accounts are considered in preparation and presentation of the financial statements.
1.20 Earnings Per Share
The Basic Earnings Per Share (âEPSâ) is computed by dividing the net profit or loss after tax for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.
The Company does not have any dilutive potential equity shares hence the Diluted EPS is the same as Basic EPS.
1.21 Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.
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