Company: ZCARW
Filing Date: 2025-03-04
Form Type: S-1
Source: 0001213900-25-020176
Chunk: 325

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-03-04
Form: S-1
Chunk 325
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 contract contains a lease at the inception of the arrangement based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset and whether it has the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which the Company does not own.

If any of the following criteria are met, the Company classifies the lease as a financing lease (as a lessee) or as a direct financing or sales-type lease (both as a lessor):

| ● | The lease transfers ownership of                                 
 the underlying asset to the lessee by the end of the lease term; |

| ● | The lease grants the lessee an option                                                
 to purchase the underlying asset that the Company is reasonably certain to exercise; |

| ● | The lease term is for 75%                                                                                              
 or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% 
 of the economic life of the underlying asset;                                                                          |

| ● | The present value of the sum of               
 the lease payments equals or exceeds 90%      
 of the fair value of the underlying asset; or |

| ● | The underlying asset is of such                                                                                
 a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term |

Leases that do not meet any of the above criteria are accounted for as operating leases.

Right of use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. Lease liabilities represent the present value of lease payments not yet paid and ROU assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of lease assets, if any.

Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.

The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Company’s leases is not readily determinable. The IBR is obtained from financial institutions based on the understanding of the Company’s credit rating and resulting interest rate the Company would have to pay to borrow an amount equal to the lease payments in