Notes to Standalone Financial Statements as at and for the year ended March 31, 2024
Notes to the Standalone Financial Statements as at and for the year ended March 31, 2024
1 Corporate Information Fractal Analytics Limited (‘Fractal’ or ‘the Company’) is a limited Company, incorporated and domiciled in India. The Company is the leading provider of advanced analytics that helps companies leverage data driven insights in taking considered decisions. The analytics solution of Company helps companies to enhance profitability by powering their customer management efforts with scientific decision making. The registered office of the Parent Company is located at Level 7, Commerz II, International Business Park, Oberoi Garden City, Western Express Highway, Goregaon (E), Mumbai, India. The Company changed its name to Fractal Analytics Limited effective from May 16, 2024. 2 M aterial accounting policies followed by the Company 2.1 Basis of Preparation 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) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The standalone financial statements have been prepared on a historical cost basis, except certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments), Employees Stock Option plan as per fair value of the option and Employee’s net defined benefit (asset) / liability at fair value of plan assets less the present value of the defined benefit obligation. The standalone financial statements are presented in Indian rupees (INR), which is Company’s presentation and functional currency. All values are rounded off to nearest million, except when otherwise indicated. These standalone financial statements were authorised for issuance by the Board of Directors at their meeting held on June 17, 2024.
The difference, if any, between the consideration and amount of net assets acquired is transferred to capital reserve. 2.3 Property, plant and equipment (‘PPE’) All items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Such cost includes its purchase price including inward freight, duties, taxes and all incidental expenses incurred to bring the asset to its present location and condition. Subsequent costs are included in the asset’s carrying amount or recognised 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. Capital work in progress includes cost of PPE under development as at the Balance Sheet date and is carried at cost, comprising of direct cost and directly attributable cost. The carrying amount of PPE is eliminated from the standalone financial statements, either on disposal or when retired from active use. Losses/gains arising on derecognition of the PPE is recognised in the Standalone Statement of Profit and Loss. The carrying amount of any component accounted for as a separate asset is derecognised when it is replaced or retired or discarded. All other repairs and maintenance are charged to Standalone Statement of profit or loss during the reporting period in which they are incurred. Depreciation Depreciation on PPE is computed using the straight-line method over the estimated useful lives. The management basis its past experience has estimated the useful lives, which is at variance with the life prescribed in Part C of Schedule II to the Act and has accordingly, depreciated the assets over such useful lives. Useful life of assets considered are as below: Description of assets Useful life of assets Furniture and fixtures 10 years Office equipment 3 years Leasehold improvements Over the period of lease Computers and accessories 3 - 6 years 2.4 Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the asset can be measured reliably.
disposal. Gains and losses on disposals are determined by comparing net disposal proceeds with carrying amount. These are included in the Standalone Statement of Profit and Loss account. 2.5 Impairment of non-financial assets Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company’s each class of the property, plant and equipment or intangible assets. If any indication exists, an asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor. Intangible assets under development are tested for impairment annually. Goodwill represents the excess of consideration transferred, together with the amount of non-controlling interest in the acquiree, over the fair value of the Company’s share of identifiable net assets acquired. Goodwill is measured at cost less accumulated impairment losses. 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. The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash- generating units that are expected to benefit from the synergies of the combination. Any impairment loss for goodwill is recognised directly in Standalone Statement of Profit and Loss. They are first used to reduce the carrying amount of any goodwill allocated to CGU and then to reduce the carrying amounts of the other assets in the CGU on a pro rate basis. An impairment loss recognised for goodwill is not reversed in subsequent periods. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed is there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. On disposal of a cash-generating unit to which goodwill is allocated, the goodwill associated with the disposed cash-generating unit is included in the carrying amount of the cash-generating unit when determining the gain or loss on disposal.
The intangible assets are stated at cost less accumulated amortization and impairment losses, if any. Cost comprises of the acquisition price, and any cost directly attributable and allocable on a reasonable basis for making the asset ready for its intended use. Intangible assets under development includes intellectual property under development as at the balance sheet date. Product development costs are incurred on developing/ upgrading the software products to launch new service modules and functionality to provide an enhanced suite of services. These development costs are capitalized and recognised as an intangible asset when the following can be demonstrated: • The technical feasibility of completing the intangible asset so that it will be available for use or sale; • Its ability and intention to use or sell the asset; • The availability of adequate resources to complete the development and to use or sell the asset; and • The ability to measure reliably the expenditure attributable to the intangible assets and probability of how the same will generate future economic benefits. Subsequent expenditure Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific assets to which it relates and the cost of the asset can be measured reliably. All other expenditure is recognised in the Standalone Statement of Profit and Loss as incurred. Amortization Amortization is recognised in the Standalone Statement of Profit and Loss on a straight-line basis over the estimated useful lives of the intangible assets from the date that they are available for use. The estimated useful lives are as follows: Description of assets Useful life of assets (Years) Computer Software 3 Client Relationships 3 Patent 3 Brand 5 Developed Content 10
2.2 Business Combination under common control transactions
Business combinations involving entities or businesses in which all the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and where the control is not transitory are accounted for as per the pooling of interest method. The business combination is accounted for as if the business combination had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established; for this purpose, comparatives are revised. The assets and liabilities acquired are recognised at their carrying amounts. The identity of the reserves is preserved, and they appear in the consolidated financial statement of the Company in the same form in which they appeared in the financial statements of the acquired entity or businesses.
Internally generated intellectual property
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The amortisation period and the amortisation method for an intangible asset are reviewed at the end of each financial year. Changes in the expected useful life are considered to modify the amortisation period and are treated as changes in accounting estimates. Intangible assets are amortised over their expected useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or
2.6 Foreign Currency Translation
Functional and presentation currency Items included in the standalone financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the
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Fractal Analytics Limited | Annual Report 2023-24
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