1.                   Company overview

1.1                Background

Bundl Technologies Private Limited (‘‘the Company’’) was incorporated on 26 December 2013 as a private limited company. The Company has its registered office at Bengaluru. The Company is a food ordering and delivery company operating under the brand name of ‘Swiggy’, which provides a single window for ordering from a wide range of restaurants and provides food delivery services using its own exclusive fleet of delivery personnel to pick up orders from restaurants/food brpared in their own kitchen and deliver it to customers.

The company is also in the business of brparing food in its own kitchen and selling the food (through the swiggy app) to the end customers under the brand name the bowl company and 48 East.

2.                   Significant accounting policies

The accounting policies set out below have been applied consistently.

2.1          Basis of brparation of financial statements

The financial statements are brpared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 (‘the 2013 Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable, Accounting Standards (‘AS’) issued by Institute of Chartered Accountants of India (ICAI) and other generally accepted accounting principles in India. The financial statements are brsented in Indian Rupees (“Rs.”) except for shares data.

2.2          Current and non-current classification

                All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a.       It is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;

b.       It is held primarily for the purpose of being traded;

c.        It is expected to be realised within 12 months after the reporting date; or

d.       It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a.       It is expected to be settled in the Company’s normal operating cycle;

b.       It is held primarily for the purpose of being traded;

c.        It is due to be settled within 12 months after the reporting date;

d.       The Company does not have an unconditional right to defer settlement of the liability for at least 12 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.Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

2.2          Current and non-current classification (continued)

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.  The operating cycle of the Company is 12 months.

2.3          Use of estimates

The brparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in current and future periods.        

2.4          Revenue recognition

The Company primarily earns revenue from four streams i.e., service income, delivery income, carousel income and income from sale of food brpared in the Company’s own kitchen.

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliable measured.

Service income rebrsents the commission charged by the Company to the restaurant as a percentage of the gross value of the bill based on br-determined terms and conditions. Revenue is recognized immediately upon the collection of delivery order from the restaurants.

Delivery income rebrsents the delivery charges levied by the Company to the customer. Revenue is recognized immediately upon the delivery of the order to the customer.

Carousel income rebrsents the advertisement income earned from restaurants. Revenue is recognized over the period for which the advertisement is run.

Income from sale of food is recognized upon delivery of food to the costumer.

Other income:

Interest is recognized using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognized when the Company’s right to receive dividend is established.

2.5          Property, plants and equipment

a)       Recognition and measurement

Property, plant and equipment are measured at cost less accumulated debrciation and impairment losses, if any. Cost includes expenditures directly attributable to the acquisition of the asset.

The cost of fixed assets not ready for use before the balance sheet date is disclosed as capital work-in-progress. Advances paid towards the acquisition of fixed assets outstanding as at each balance sheet date is disclosed as capital advance under long-term loans and advances.

2.5          Property, plants and equipment (continued)

b)       Debrciation

The Company debrciates property, plant and equipment over the estimated useful life on a straight-line basis from the date the assets are available for use. Assets acquired under the leasehold improvement are amortized over the shorter of estimated useful life of the asset or the related lease term. The estimated useful life of assets are reviewed and where appropriate are adjusted annually.  

The estimated useful lives of the assets are as follows:

Category	Useful life (in years)
Computers	3 years
Servers and networking equipment’s (included in computers in the note 16)	3 years
Furniture and fixtures	5 years
Mobile phones and tablets	1 year
Leasehold improvement	6 years
Kitchen equipment	5 years
Office equipment	5 years

When part of an item of property, plant and equipment have different useful life, they are accounted as a separate items (major components) of property, plant and equipment.

Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.

Based on internal assessment and technical evaluation carried out by the management, the useful life of servers and networking equipment’s, furniture and fixtures and mobile phones and tablets as given above best rebrsents the period over which management expects to use these assets. Hence, the useful lives of these assets is different from the useful life as brscribed under Part C of Schedule II of the Companies Act, 2013.

Debrciation is charged on a proportionate basis from/up to the date the assets are purchased/sold during the year. A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Losses arising from retirement or gains or losses arising from disposal of fixed assets which are carried at cost are recognized in the statement of profit and loss.

Company is assuming terminal value of 5% of the Cost of the Asset i.e. only 95% of the original cost of asset is debrciated.

c)       Goodwill

Where several items of property, plant and equipment are purchased for a consolidated price, the consideration is apportioned to the various items on the basis of their respective fair values at the date of acquisition.

d)       Intangible assets

Intangible assets acquired separately are measured at cost of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any.

The amortization of an intangible assets with finite useful life reflects the manner in which the economic benefit is expected to be generated.

The estimated useful life of amortizable intangibles are reviewed and where appropriate are adjusted, annually. The estimated useful lives of the amortizable intangible assets for the current period are as follows:

Category	Useful life (in years)
Software	5 years
Non-compete agreement	3 years

2.6          Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.

If at the balance sheet date there is an indication that a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciable historical cost.

2.7          Leases

Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. The total lease rentals (including scheduled rental increases) in respect of an asset taken on operating lease are charged to the statement of profit and loss on a straight line basis over the lease term unless another systematic basis is more rebrsentative of the time pattern of the benefit.

2.8          Investments

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 long- term investments. However, the part of long term investments which is expected to be realized within 12 months after the reporting date is also brsented under ‘current assets’.

Long- term investments (including current portions thereof) are carried at cost less any other than temporary diminution in value, determined separately for each individual investment.

Current investments are carried at the lower of cost and fair value. The comparison of the cost and fair value is done for each investment. The fair value is determined using quoted market price/market observable information adjusted for cost of disposal. On disposal of the investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

2.9                Foreign currency transactions

Foreign exchange transactions are recorded into Indian rupees using the rates of exchange brvailing on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit and loss.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated into Indian rupee at the closing exchange rates on that date. The resultant exchange differences are recognized in the statement of profit and loss.

Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction.

2.10        Employee benefits

Short-term employee benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like performance incentives, etc. and are recognized as expenses in the period in which the employee renders the related service.

Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to a Government administered provident fund scheme which is a defined contribution plan. The Company’s contribution is recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its brsent value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The calculation of the Company’s obligation under the plan is performed annually by a qualified actuary using the projected unit credit method.

The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the statement of profit and loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the statement of profit and loss. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognized in statement of profit and loss on a straight-line basis over the average period until the benefits become vested.

The Company recognizes gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.

Compensated absences

Benefits under the Company's compensated absences scheme constitute other long term employee benefits. The obligation in respect of compensated absences is provided on the basis of an actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the brsent value of estimated future cash flows. The discount rates used for determining the brsent value of obligation under defined benefit plan, is based on the market yields as at balance sheet date on Government securities, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognized immediately in the statement of profit and loss. To the extent the Company does not have an unconditional right to defer the utilization or encashment of the accumulated compensated absences, the liability determined based on actuarial valuation is considered to be a current liability.

Share based payments:

The Company accounts for equity settled stock options as per the accounting treatment brscribed by the guidance note on employee share based payments issued by the Institute of Chartered Accountants of India (ICAI) using the fair value model.

2.11        Provisions and contingent liabilities

The Company recognizes a provision when there is a brsent obligation as a result of a past (or obligating) event that probably will require an outflow of resources and a reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when, as a result of obligating events, there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. When as a result of obligating events, there is a possible obligation or a brsent obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a brsent obligation as a result of an obligating event based on a reliable estimate of such obligation.

2.12        Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with Indian Income tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).  The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted at the balance sheet date. 

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future; however, where there is unabsorbed debrciation or carried forward business loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence of realization of such assets.  Deferred tax assets and liabilities are reviewed at each balance sheet date and written down or written-up to reflect the amount that is reasonably or virtually certain (as the case may be) to be realized.

Minimum Alternative Tax (“MAT”) paid in accordance with the tax laws which gives rise to future economic benefits in the form of adjustments of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal tax in subsequent years.

MAT credit entitlement can be carried forward and utilized for a period of ten years from the year in which the same is availed. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

Assets and liabilities rebrsenting current and deferred tax are disclosed on a net basis when there is a legally enforceable right to set off and management intends to settle the asset and liability on a net basis.

2.13        Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the year   

by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.14        Cash and cash equivalents

Cash and cash equivalents comprise cash and balances with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

2.15        Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated.

2.16        Inventories

Inventories which comprise of raw materials are carried at lower of cost and net realizable value.

Cost of inventories comprises all cost of purchase and other cost incurred in bringing the inventories to their brsent location and condition. Cost is determined using the weighted average method.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sales.

2.17        Share issue expenses

                Share issue expenses eligible to be capitalized are adjusted with securities brmium.

Employee benefits
Defined contribution plans
The Company makes contributions, determined as a specified percentage of employee salary, in respect of qualifying employee towards Provident Fund, which is a defined contribution plan. The Company has no obligation other than to make the specified contributions. The contributions are charges to the Statement of Profit and Loss as they accrue. The amount recognised as expenses towards contribution to the Provident Fund for the year aggregated to Rs. 4,38,06,684 (brvious year: Rs 2,37,76,283)
Defined benefit plans
In accordance with applicable Indian Laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the Company.