Provisions and contingent liabilities
i) Provisions
Provisions are recognised when the Group has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
The expense relating to a provision is presented in the
consolidated statement of profit and loss net of any
reimbursement.
If the effect of the time value of money is
material, provisions are discounted using a current
pre-tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is
recognised as a finance cost.
ii) Contingent liabilities
Contingent liability is a possible obligation that arises
from past events and 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 Group, or is a present
obligation that arises from past event but is not
recognised because either it is not probable that an
outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable
estimate of the amount of the obligation cannot
be made. Contingent liabilities are disclosed and
not recognised.
r) 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.
Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through consolidated statement of profit
and loss are recognised immediately in consolidated
statement of profit and loss.
Financial assets
All financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded at
fair value through consolidated statement of profit
or loss, transaction costs that are attributable to
the acquisition of the financial asset. However
trade receivable that do not contain a significant
financing component are measured at transaction
price. Transaction costs of financial assets carried
at fair value through profit or loss expensed off in
the statement of profit & loss. Purchases or sales
of financial assets that require delivery of assets
within a time frame established by regulation or
convention in the market place (regular way trades)
are recognised on the trade date, i.e., the date that
the Group commits to purchase or sell the asset.
Classification and Subsequent measurement
Financial assets that meet the following conditions
are subsequently measured at amortised cost less
impairment loss (except for debt investments that
are designated as at fair value through profit or loss
on initial recognition):
• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial assets that meet the following conditions
are subsequently measured at fair value through other
comprehensive income (except for debt investments
that are designated as at fair value through profit or
loss on initial recognition):
• the asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling financial
assets; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
The Group subsequently measures certain
investments in mutual funds in scope of Ind AS 109
at fair value, with net changes in fair value recognised
in the consolidated statement of profit and loss. Also,
the Group has made an irrevocable election to present
subsequent changes in the fair value of certain
investment in equity and preference instruments not
held for trading in other comprehensive income.
FVTPL is a residual category for debt instruments.
Any debt instrument, which does not meet the criteria
for categorization as at amortized cost or as FVTOCI,
is classified as at FVTPL. Cash and cash equivalents,
other bank balances, loans and other financial assets
are classified for measurement at amortised cost.
Financial assets at amortised cost are subsequently
measured at amortised cost using effective interest
method. The effective interest method is a method of
calculating the amortised cost of an instrument and
of allocating interest income over the relevant year.
The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including
all fees paid or received that form an integral part
of the effective interest rate, transaction costs and
other premiums or discounts) through the expected
life of the debt instrument, or, where appropriate,
a shorter year, to the net carrying amount on initial
recognition.
Equity instruments
An equity instrument is a contract that evidences
residual interest in the assets of the company after
deducting all of its liabilities. Equity instruments
issued by the Group are recognised at the proceeds
received net of direct issue cost.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Group's
consolidated financial statements of assets and
liabilities) when:
i) The rights to receive cash flows from the asset
have expired; or
ii) The group has transferred its rights to receive cash
flows from the asset or has assumed an obligation
to pay the received cash flows in full without
material delay to a third party under a 'pass¬
through' arrangement; and either (a) the group has
transferred substantially all the risks and rewards
of the asset, or (b) the group has neither transferred
nor retained substantially all the risks and
rewards of the asset, but has transferred control
of the asset.
When the group has transferred its rights to receive
cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
group continues to recognise the transferred asset
to the extent of the Group's continuing involvement.
In that case, the group also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the
rights and obligations that the Group has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
group could be required to repay.
Impairment of financial assets
In accordance with Ind AS 109, the group applies
expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following
financial assets and credit risk exposure:
i) Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans, debt
securities, deposits and bank balance;
ii) Trade receivables or any contractual right to
receive cash or another financial asset that result
from transactions that are within the scope of Ind
AS 115.
The company follows 'simplified approach' for
recognition of impairment loss allowance on trade
receivables.
The application of simplified approach does not
require the group to track changes in credit risk.
Rather, it recognizes impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition. The Group has established
a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic
environment.
Lifetime ECL 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
reporting date.
ECL is the difference between all contractual cash
flows that are due to the group in accordance with the
contract and all the cash flows that the entity expects
to receive (i.e., all cash shortfalls), discounted at the
original EIR. When estimating the cash flows, an
entity is required to consider:
i) All contractual terms of the financial instrument
(including prepayment, extension, call and similar
options) 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.
ii) Cash flows from the sale of collateral held or
other credit enhancements that are integral to
the contractual terms.
ECL impairment loss allowance (or reversal) recognized
during the year is recognized as income/ expense in
the consolidated statement of profit and loss. This
amount is reflected under the head 'other expenses'
in the consolidated statement of profit and loss.
The consolidated statement of assets and liabilities
presentation for various financial instruments is
described below:
• Financial assets measured as at amortised
cost, contractual revenue receivables: ECL is
presented as an allowance, i.e., as an integral
part of the measurement of those assets in the
consolidated financial statement of assets and
liabilities. The allowance reduces the net carrying
amount. Until the asset meets write-off criteria,
the group does not reduce impairment allowance
from the gross carrying amount.
For assessing increase in credit risk and impairment
loss, the group combines financial instruments on the
basis of shared credit risk characteristics with the
objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be
identified on a timely basis.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, as appropriate.
All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction
costs.
The Group's financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts and liability component of convertible
instruments.
Subsequent measurement
The measurement of financial liabilities depends on
their classification, as described below:
Financial liabilities at amortised cost (Loans and
borrowings)
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation
process.
Amortised 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 amortisation is included as finance costs in the
statement of profit and loss. This category generally
applies to borrowings.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading or financial liabilities designated upon
initial recognition as at fair value through
profit or loss.
Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing
in the near term.
Gains or losses on liabilities held for trading are
recognised in the consolidated statement of profit
and loss.
Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated as such at the initial date of recognition,
and only if the criteria in Ind AS 109 are satisfied.
For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk
are recognized in OCI. These gains/ losses are not
subsequently transferred to P&L. However, the group
may transfer the cumulative gain or loss within equity.
All other changes in fair value of such liability are
recognised in the consolidated statement of profit
and loss.
Derecognition
A financial liability is derecognised 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
recognised in the consolidated statement of profit
and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the consolidated
statement of assets and liabilities if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities
simultaneously.
s) Impairment of non-financial assets
The Group assesses, at each reporting date, whether
there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the
asset's recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash-generating
unit's (CGU) fair value less costs of disposal and its
value in use. Recoverable amount is determined
for an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired
and is written down to its recoverable amount. 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. In determining fair value
less costs of disposal, recent market transactions
are taken into account. If no such transactions can
be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded
companies or other available fair value indicators.
The Group bases its impairment calculation on
detailed budgets and forecast calculations, which
are prepared separately for each of the Group's CGUs
to which the individual assets are allocated. These
budgets and forecast calculations generally cover
a year of five years. For longer years, a long-term
growth rate is calculated and applied to project future
cash flows after the fifth year. To estimate cash
flow projections beyond years covered by the most
recent budgets/forecasts, the Group extrapolates
cash flow projections in the budget using a steady or
declining growth rate for subsequent years, unless
an increasing rate can be justified. In any case, this
growth rate does not exceed the long-term average
growth rate for the products, industries, or country
or countries in which the entity operates, or for the
market in which the asset is used.
Impairment losses are recognised in the consolidated
statement of profit and loss.
For assets excluding goodwill, an assessment is made
at each reporting date to determine whether there is
an indication that previously recognised impairment
losses no longer exist or have decreased. If such
indication exists, the Group estimates the asset's or
CGU's recoverable amount. A previously recognised
impairment loss is reversed only if there has been
a change in the assumptions used to determine the
asset's recoverable amount since the last impairment
loss was recognised. The reversal is limited so that
the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
consolidated statement of profit and loss unless the
asset is carried at a revalued amount, in which case,
the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually as at
December 31 and when circumstances indicate that
the carrying value may be impaired.
Impairment is determined for goodwill by assessing
the recoverable amount of each CGU (or group of CGUs)
to which the goodwill relates. When the recoverable
amount of the CGU is less than its carrying amount,
an impairment loss is recognised. Impairment losses
relating to goodwill cannot be reversed in future
years.
t) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial year of time to
get ready for its intended use or sale are capitalised
as part of the cost of the asset. All other borrowing
costs are expensed in the year in which they occur.
Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the borrowing costs.
u) Cash and cash equivalents
Cash and cash equivalent in the consolidated
statement of assets and liabilities comprise cash at
banks and on hand and short-term deposits with an
original maturity of three months or less, which are
subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement of
cash flows, cash and cash equivalents consist of
cash and short-term deposits, as defined above,
net of outstanding bank overdrafts (if any) as they
are considered an integral part of the Group's cash
management.
v) Hyperinflation accounting
Several factors are considered when evaluating
whether an economy is hyperinflationary, including
the inflation, and the change in customer price index.
The impact on financial statements of subsidiaries /
branch operating in hyperinflationary economies is
considered for the changes in the general purchasing
power of the local currency, using official indices at
the balance sheet date, before translation into Indian
Rupees (INR) and, as a result, are stated in the terms
of the measuring unit at the balance sheet date.
The index used to apply hyperinflation accounting is
the Consumer Price Index published by the relevant
authorities. The hyperinflationary economies in the
Group operates are listed in Note 50.
w) Cash Flow Statement
Cash flows are reported using the indirect method,
whereby loss for the year is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the group are segregated.
x) Events occurring after the balance sheet
date
Based on the nature of the event, the group identifies
the events occurring between the balance sheet date
and the date on which the consolidated financial
statements are approved as 'Adjusting Event' and 'Non¬
adjusting event'. Adjustments to assets and liabilities
are made for events occurring after the balance sheet
date that provide additional information materially
affecting the determination of the amounts relating
to conditions existing at the balance sheet date or
because of statutory requirements or because of
their special nature. For non-adjusting events, the
group may provide a disclosure in the consolidated
financial statements considering the nature of the
transaction.
2.4 Significant accounting judgements,
estimates and assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities. Uncertainty
about these assumptions and estimates could result
in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected
in future periods.
Judgements
In the process of applying the accounting policies,
management has made the following judgements,
which have the most significant effect on the amounts
recognised in the financial statements:
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the financial year, are
described below:
i) The Group based its assumptions and estimates
on parameters available when the consolidated
financial statement were prepared.
ii) Existing circumstances and assumptions about
future developments, however, may change due
to market changes or circumstances arising
that are beyond the control of the Group. Such
changes are reflected in the assumptions when
they occur.
Share-based payments
Employees of the Group receive remuneration
in the form of share based payment transactions,
whereby employees render services as consideration
for equity instruments (equity-settled transactions).
In accordance with the Ind AS 102, Share Based
Payments, the cost of equity-settled transactions is
measured using the fair value method. The cumulative
expense recognized for equity-settled transactions
at each reporting date until the vesting date reflects
the extent to which the vesting period has expired
and the Group's best estimate of the number of equity
instruments that will ultimately vest. The expense or
credit recognized in the statement of profit and loss
for a period represents the movement in cumulative
expense recognized as at the beginning and end of
that period and is recognized in employee benefits
expense.
Further details about Share-based payments are
given in note 36.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and
the present value of the gratuity obligation 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 reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate
for plans operated, the management considers the
interest rates of government bonds in currencies
consistent with the currencies of the post¬
employment benefit obligation.
The mortality rate is based on publicly available
mortality table . The mortality table tend to change
only at interval in response to demographic changes.
Future salary increases and gratuity increases are
based on expected future inflation rates.
Further details about gratuity obligations are given
in note 35.
Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
and inputs to be used. The inputs to these models
are taken from observable markets where possible,
but where this is not feasible, a degree of judgement
is required in establishing fair values. Judgements
include considerations of inputs such as liquidity
risk, credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair
value of financial instruments.
Lease
The Group measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in
the lease, if that rate can be readily determined. If
that rate cannot be readily determined, the Group
uses incremental borrowing rate. For leases with
reasonably similar characteristics, the Group may
adopt the incremental borrowing rate for the entire
portfolio of leases as a whole. The lease payments
shall include fixed payments, variable lease payments,
residual value guarantees and payments of penalties
for terminating the lease, if the lease term reflects
the lessee exercising an option to terminate the
lease. The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount
to reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance
fixed lease payments.
Compulsorily Convertible Cumulative Preference
Shares (CCCPS)
The Group has classified the CCCPS instruments as
an equity since it is a non-derivative instrument and at
present have no contractual obligation for the Group
to deliver a variable number of its equity instruments.
The issuance of new shares which may trigger the anti¬
dilution protection, is within the control of the Group
and also the Group has no contractual obligation for
the same, hence, the anti-dilution provision does not
trigger liability classification.
Impairment of Goodwill
Goodwill recognised on business combination is
tested for impairment on annual basis or whenever
there is an indication that the recoverable amount
of the cash generating unit (CGU) is less than the
carrying amount. The calculation of value in use of a
CGU involves use of significant assumptions including
future economic and market conditions.
Business combinations
As disclosed in Note 2.3 (b), Control is achieved when
the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the
ability to affect those returns through its power over
the investee. In cases, where the Group holds less
than half of the voting rights of an investee, significant
judgement is required by management to determine
whether the Group has control over the investee,
which is established if and only if the Group has:
i) Power over the investee (i.e., existing rights that
give it the current ability to direct the relevant
activities of the investee)
ii) Exposure, or rights, to variable returns from its
involvement with the investee; and
iii) The ability to use its power over the investee to
affect its returns.
Incentives
As disclosed in Note 2.3 (j), the Group provides
incentives to its transacting users in various forms
including credits and direct payment discounts to
promote traffic on its platform. All incentives given to
the users where the group is responsible for delivery
are recorded as a reduction of revenue to the extent of
the revenue earned from that user on a transaction by
transaction basis. The amount of incentive in excess
of the revenue earned from the transacting users
is recorded as advertisement and sales promotion
expense. In other cases, where group is not responsible
for delivery, management is required to determine
whether the incentives are in substance a payment
on behalf of the restaurant merchants and should
therefore be recorded as a reduction of revenue or
advertisement and sales promotion expenses. Some
of the factors considered in management's evaluation
of such incentives being payments on behalf of
restaurant merchants include whether the incentives
are given at the Group's discretion, contractual
agreements with the restaurant merchants, business
strategy and objectives and design of the incentive
program(s), etc.
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