1. Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these
financial statements. These policies 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
accounting policy hitherto in use.
1.1 Basis of preparation
(i) Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting standards (Ind AS)
notified under section 133 of the Companies Act, 2013 (‘the Act’) [Companies (Indian Accounting
Standards) Rules, 2015, as amended by notification dated March 31, 2016] and other relevant provisions of the
Act.
All assets and liabilities have been classified as current or non-current as per the Company’s
operating cycle and other criteria set out in the Schedule III (Division II) to the Companies Act, 2013.
Based on the nature of services and the time between the rendering of service and their realisation in cash
and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of
current and noncurrent classification of assets and liabilities.
The financial statements are presented in Indian Rupees and all amounts disclosed in the financial
statements and notes have been rounded off upto two decimal points to the nearest Million (as per the
requirement of Schedule III), unless otherwise stated.
(ii) Historical Cost Convention
The Financial statements have been prepared on a historical cost basis, except for the following:
- Certain financial assets and liabilities (including derivative instruments) which are measured at
fair value / amortised cost;
- Defined benefit plans-plan assets measured at fair value; and
- Share based payments.
2.2 Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s 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 recognized in profit
or loss during the reporting period, in which they are incurred.
Transition to Ind<4S
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 April 1, 2015 measured as per the previous GAAP and use that
carrying value as the deemed cost of the property, plant and equipment.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided on a pro-rata basis on the straight line method over the estimated useful lives
of assets, based on internal assessment and independent technical evaluation done by the Management expert
which are equal to, except in case of Plant and Machinery, Furniture and Fixtures and Vehicles where useful
life is lower than life prescribed under Schedule II to the Companies Act, 2013, in order to reflect the
actual usage of the assets.
The leasehold improvements are depreciated over the assets’ useful life or over the shorter of the
assets’ useful life and the lease term.
The asset’s useful lives and methods of depreciation are reviewed at the end of each reporting
period and adjusted prospectively, if appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing net disposal proceeds with carrying amount of
the asset. These are included in profit or loss within other income.
Assets costing less than or equal to Rs. 5,000 are fully depreciated pro-rata from date of
acquisition.
2.3 Intangible assets
Intangible assets acquired separately are measured on initial recognition at historical cost. Intangibles
assets have a finite life and are subsequently carried at cost less any accumulated amortization and
accumulated impairment losses if any.
Intangible assets with finite lives are amortized over the useful life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortization period or method, as
appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible
assets with finite lives is recognized in the statement of profit and loss unless such expenditure forms part
of carrying value of another asset.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit
or loss when the asset is derecognized.
Amortisation methods and estimated useful lives
Assets costing less than or equal to Rs. 5,000 are fully amortised pro-rata from date of acquisition.
2.4 Impairment of non-financial assets
Assessment is done at each balance sheet date as to whether there is any indication that an asset may be
impaired. If any such indication exists or when annual impairment testing for an asset is required, an
estimate of the recoverable amount of the asset/cash generating unit is made. Recoverable amount is higher of
an asset’s or cash generating unit’s fair value less costs of disposal and its value in use. Value
in use is the present value of estimated future cash flows expected to arise from the continuing use of an
asset and from its disposal at the end of its useful life. For the purpose of assessing impairment, the
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 group of assets. The smallest identifiable group
of assets that generates cash inflows from continuing use that are largely independent of the cash inflows
from other assets or groups of assets, is considered as a cash generating unit (CGU). An asset or CGU whose
carrying value exceeds its recoverable amount is considered impaired and is written down to its recoverable
amount. Assessment is also done at each balance sheet for possible reversal of an impairment loss recognized
for an asset, in prior accounting periods.
2.5 Foreign currency translations
(i) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the Company operates (‘the functional currency’) i.e., Indian Rupee
(INR) which is its presentation currency as well.
(ii) Transactions and balances Initial recognition
On initial recognition, all foreign currency transactions are recorded by applying to the foreign
currency amount the spot exchange rate between the functional currency and the foreign currency at the date
of the transaction.
Subsequent recognition
As at the reporting date, foreign currency monetary items are translated using the closing rate and
non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the initial transaction.
Exchange gains and losses arising on the settlement of monetary items or on translating monetary items at
rates different from those at which they were translated on initial recognition during the year or in previous
financial statements are recognised in profit or loss in the year in which they arise. During the year ended
March 31, 2019, the company has adopted Appendix B to Ind AS 21 - Foreign Currency Transactions and Advance
Considerations which clarifies the date of transaction for the purpose of determining the exchange rate to
use on initial recognition of the related asset, expense or income when an entity has received or paid
advance consideration in a foreign currency. The effect on account of adoption of this amendment was
insignificant.
Translation of foreign operations
The financial statements of foreign operations are translated using the principles and procedures
mentioned above, since these businesses are carried on as if it is an extension of the Company’s
operations.
2.6 Revenue recognition
Effective April 1, 2018, the Company adopted Ind AS 115 “Revenue from Contracts with
Customers” using the modified retrospective approach, applied to contracts that were not completed as
of April 1, 2018. In accordance with modified retrospective approach, the comparatives have not been
retrospectively adjusted. Refer Note 2.6 “Significant Accounting Policies” in the Company’s
2018 Annual Report for the policies in effect for revenue prior to April 1, 2018. The effect on adoption of
Ind AS was insignificant.
Revenue is recognised upon transfer of control of promised services to customers in an amount that
reflects the consideration we expect to receive in exchange for those services. (net of goods and services
tax).
The Company earns revenue significantly from the following sources viz.
a) Recruitment solutions through its career web site, Naukri.com:-
Revenue is received primarily in the form of fees, which is recognized prorata over the subscription /
advertising / service agreement, usually ranging between one to twelve months.
b) Matrimonial web site, Jeevansathi.com, Real Estate website, 99acres.com and Education classified
website, Shiksha.com:-
Revenue is received in primarily the form of subscription fees, which is recognized over the period of
subscription / advertising / service agreement, usually ranging between one to twelve months. The revenue is
recognized on principal to principal basis and recognized gross of agency/commission fees, as applicable in
case of Jeevansathi.com.
c) Placement search division, Quadrangle:-
Revenue is received in the form of fees, for placements at various levels in a client’s
organization. Revenue is recognized on the successful completion of the search and selection activity.
d) Resume Fast Forward Service:-
The revenue from Resume Sale Services is earned in the form of fees and is recognized on completion of
the related service.
Revenue in relation to rendering of the services mentioned in (a) & (b) above where performance
obligations are satisfied over time and where there is no uncertainty as to measurability or collectability
of consideration, is recognized ratably over the period in which services are rendered (subscription period)
and rendering of the services mentioned in (c) to (d) above are recognised in the accounting period in which
the services are rendered. When there is uncertainty as to measurement or ultimate collectability, revenue
recognition is postponed until such uncertainty is resolved.
In respect of (a) and (b) above, the unaccrued amounts are reflected in the Balance sheet as Income
received in advance (deferred sales revenue). The company has as a matter of practical expedient recognised
the incremental costs of obtaining a contract as an expense when incurred, since the amortisation period of
the asset that the entity otherwise would have recognised is generally one year or less.
2.7 Retirement and other employee benefits
(i) Short-term obligations
Liabilities for salaries, including other monetary and non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees’ services up to the end of the reporting period 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.
(ii) Other Long-term employee benefit obligations
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured as the present
value of expected future payments to be made in respect of services provided by employees upto the end of the
reporting period using the projected unit credit method. The benefits are discounted using the market yields
at the end of the reporting period that have terms approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in
profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
(iii) Post-employment obligations
The Company operates the following post-employment schemes:
a) Defined contribution plans - provident fund
b) Defined benefit plans - gratuity plans
a) Defined contribution plans
The Company has a defined contribution plan for the post-employment benefit namely Provident Fund which
is administered through the Regional Provident Fund Commissioner and the contributions towards such fund are
recognised as employee benefits expense and charged to the Statement of Profit and Loss when they are due.
The Company does not carry any further obligations with respect to this, apart from contributions made on a
monthly basis.
b) Defined benefit plans
The Company has defined benefit plan, namely gratuity for eligible employees in accordance with the
Payment of Gratuity Act, 1972 the liability for which is determined on the basis of an actuarial valuation
(using the Projected Unit Credit method) at the end of each year. The Gratuity Fund is recognised by the
income tax authorities and is administered through Life Insurance Corporation of India under its Group
Gratuity Scheme.
The present value of the defined benefit obligation denominated in INR is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the tenor of the related obligation. The liability or asset recognized
in the balance sheet in respect of gratuity is the present value of the defined benefit obligation at the end
of the reporting period less the fair value of plan assets. The net interest cost is calculated by applying
the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurements of the net defined liability, comprising of actuarial gains and losses, return on plan
assets (excluding amounts included in net interest on the net defined benefit liability) and any change in
the effect of asset ceiling (excluding amounts included in net interest on the net defined benefit
liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained
earnings through Other Comprehensive Income (OCI) in the period in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
Change in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in the profit or loss as past service cost.
(iv) Bonus Plans
The Company recognises a liability and an expense for bonuses. The Company recognises a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
(v) Termination benefits
Termination benefits are payable when employment is terminated by the Company before the normal
retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company
recognises termination benefits at the earlier of the following dates:
(a) when the Company can no longer withdraw the offer of those benefits; and (b) when the entity
recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of
terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination
benefits are measured based on the number of employees expected to accept the offer. Benefits falling due
more than 12 months after the end of the reporting period are discounted to present value.
(vi) Share based payments
Share-based compensation benefits are provided to employees via the Info Edge Limited Employee Option
Plan and share-appreciation rights. These are equity settled schemes.
Employee options
The fair value of options granted under the Info Edge Employees’ Stock Option Scheme is recognised
as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is
determined by reference to the grant date fair value of the options granted:
- including any market performance conditions (e.g., the entity’s share price]
- excluding the impact of any service and non-market performance vesting conditions (e.g.
profitability, sales growth targets and remaining an employee of the entity over a specified time period),
and
- including the impact of any non-vesting conditions (e.g. the requirement for employees to save or
hold shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates
of the number of options that are expected to vest based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding
adjustment to equity. Share appreciation rights
Share appreciation rights granted are considered to be towards equity settled share based transactions
and as per IND AS 102, cost of such options are measured at fair value as at the grant date. Company’s
share appreciation rights are recognised as employee benefit expense over the relevant service period.
2.8 Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax is calculated on the basis of the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulations is subject to interpretation. It establishes
provisions or make reversals of provisions made in earlier years, where appropriate, on the basis of amounts
expected to be paid to / received from the tax authorities.
Deferred tax is recognized for all the temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, subject to the consideration of prudence
in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only if it is
probable that sufficient future taxable amounts will be available against which such deferred tax asset can
be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been
enacted or substantively enacted by the end of the reporting period and are expected to apply when the related
deferred income tax asset is realized or the deferred income tax liability is settled. The carrying amount of
deferred tax assets are reviewed at each Balance Sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax liabilities are not recognised for temporary differences between the carrying amount and tax
bases of investments in subsidiaries, associates and interest in joint arrangements where the company is able
to control the timing of the reversal of the temporary differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in subsidiaries, associates and interest in joint arrangements where it is not probable
that the differences will reverse in the foreseeable future and taxable profit will not be available against
which the temporary difference can be utilised.
Current and deferred tax is recognised in profit or 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.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current
tax assets and liabilities and the deferred tax balances relate to the same taxable authority. Current tax
assets and 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.
2.9 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future
operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item included in the same class of obligations may be
small.
If the effect of the time value of money is material, provisions are measured at the present value of
management’s best estimate of the expenditure required to settle the present obligation at the end of
the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
the risks specific to the liability. The increase in the provision due to the passage of time is recognized
as a finance cost.
2.10 Leases (as lessee)
a) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Lease payments under an operating leases (net of any incentives received
from the lessors) are recognised as an expense in the Statement of Profit and Loss on a straight line basis
over the period of lease unless the payments are structured to increase in line with expected general
inflation to compensate for the lessor’s expected inflationary cost increases.
b) Finance leases
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised 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 apportioned between the finance charge and the
reduction of the outstanding liability. The outstanding liabilities included in Non-current liabilities. The
finance charge 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.
2.11 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (CODM).
All operating segments’ results are reviewed regularly by the Company’s Managing Director &
Chief Executive Officer (MD & CEO) who been identified as the CODM, to assess the financial performance and
position of the Company and makes strategic decisions.
The Company is primarily in the business of internet based service delivery operating in four service
verticals through various web portals in respective verticals namely recruitment solutions comprising
primarily naukri.com, other recruitment related portals and ancillary services related to recruitment,
99acres.com for real estate related services, Jeevansathi.com for matrimony related services and Shiksha.com
for education related services.
(a) Description of segments and principal activities
The CODM evaluates the Company’s performance and allocates resources based on an analysis of
various performance indicators by business segments. Accordingly, information has been presented along these
business segments. The accounting principles used in preparing these financial statements are consistently
applied to record revenue & expenditure in individual segments. The reportable segments represent
“Recruitment Solutions” and “99acres” and the “Others”.
1: Recruitment Solutions: This segment consists of Naukri (both India and Gulf business) and all other
allied business which together provides complete hiring solutions which are both B2B as well as B2C. Apart
from all Other Online business, it also includes Offline headhunting business ‘Quadrangle’.
2: Real State- 99acres: 99acres.com derives its revenues from property listings, builders’ and
brokers’ branding and visibility through micro-sites, home page links and banners servicing real estate
developers, builders and brokers.
3: Others: This segment comprises primarily Jeevansathi and Shiksha service verticals since they
individually do not meet the qualifying criteria for reportable segment as per the Ind AS.
The CODM primarily uses a measure of profit before tax to assess the performance of the operating
segments. However, the CODM also receives information about the segments’ revenue and assets on a
monthly basis.
(b) Profit before tax
Profit before tax for any segment is calculated by subtracting all the segment’s expenses
(excluding taxes) incurred during the year from the respective segment’s revenue earned during the
year. To calculate the segment level expenses, certain common expenditures which are incurred for the entity
as a whole but cannot be directly mapped to a single segment are allocated basis best management estimates to
all the segments. Interest income is not allocated to segments as this type of activity is driven by the
central treasury function. Similarly, certain costs including corporate expenses which are not directly
related to general functioning of business are not allocated to segments.
2.12 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash on hand, amount at banks and other short-term
deposits with an original maturity of three months or less that are readily convertible to known amount of
cash and, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
company’s cash management
2.13 Earnings Per Share (EPS)
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit for the year attributable to equity holders of the Company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account:
- the weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential instruments into equity shares.
For the purpose of calculating basic EPS, shares allotted to ESOP trust pursuant to the employee share
based payment plan are not included in the shares outstanding as on the reporting date till the employees
have exercised their right to obtain shares, after fulfilling the requisite vesting conditions. Till such
time, the shares so allotted are considered as dilutive potential equity shares for the purpose of
calculating diluted EPS.
2.14 Treasury shares (Shares held by the ESOP Trust)
The Company has created an Employee Stock Option Plan Trust (ESOP Trust) for providing share-based
payment to its employees. The Company uses the trust as a vehicle for distributing shares to employees under
the employee remuneration schemes. The Company allots shares to the ESOP Trust. The Company treats the ESOP
trust as its extension and shares held by ESOP Trust are treated as treasury shares. Share options exercised
during the reporting period are satisfied with treasury shares.
The consideration paid for treasury shares including any directly attributable incremental cost is
presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares
are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the
resulting surplus or deficit on the transaction is transferred to/ from retained earnings.
2.15 Financial Instruments
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value through profit or loss, and
- those measured at amortised cost.
The classification depends on the Company’s business model for managing the financial assets and
the contractual terms of the cash flows.
For assets measured at fair value, gains and losses are recorded in profit or loss. For investments in
equity instruments in subsidiaries, associates and jointly control entities these are carried at cost less
diminution, if any, in these financial statements.
The Company reclassifies debt investments when and only when its business model for managing those assets
changes.
(ii) Measurement
At initial recognition, the Company measures a financial asset 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.
Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing the
asset and the cash flow characteristics of the asset. There are two measurement categories into which the
Company has classified its debt instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows and where the
contractual terms give rise on specified dates to cash flows that represent solely payments of principal and
interest, are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured
at amortised cost is recognised in profit or loss when the asset is derecognized or impaired. Interest income
from these financial assets is included in finance income using the effective interest rate method.
- Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost,
are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss is recognised in profit or loss and presented net in the
statement of profit and loss within other income in the period in which it arises. Interest income from these
financial assets is included in other income.
Equity instruments
The Company subsequently measures all equity investments which are within the scope of Ind AS 109 at fair
value, other than investments in equity instruments in subsidiaries, associates and jointly control entities,
which are carried at cost less diminution, if any.
(iii) Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortized cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. Note 41 details how the company determines whether there has been a significant
increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognized from initial recognition of the
receivables.
(iv) Derecognition of financial instruments
A financial asset is derecognised only when
- the Company has transferred the rights to receive cash flows from the financial asset or
- 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 Company has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset
is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not
retained control of the financial asset. Where the Company retains control of the financial asset, the asset
is continued to be recognised to the extent of continuing involvement in the financial asset.
A financial liability (or a part of financial liability) is derecognized from the Company’s balance
sheet when the obligation specified in the contract is discharged or cancelled or expires.
(v) Financial Liabilities
Financial liabilities are classified, at initial recognition, as loans and borrowings, payables, as
appropriate.
The Company’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts. For trade and other payables maturing within one year from the balance sheet date,
the carrying amounts approximate fair value due to short term maturity of these instruments.
(vi) Income recognition Interest income
For all debt instruments measured at amortized cost, interest income is recorded using the effective
interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts
over the expected life of the financial instrument or a shorter period, where appropriate, to the gross
carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating
the effective interest rate, the company estimates the expected cash flows by considering all the contractual
terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not
consider the expected credit losses. Interest income is included in finance income in the statement of profit
and loss Dividends
Dividends are recognized in profit or loss only when the right to receive the payments is established, it
is probable that the economic benefits associated with the dividend will flow to the Company, and the amount
of the dividend can be measured reliably, which is generally when the shareholders approve the dividend.
2.16 Contributed Equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction,
net of tax, from the proceeds.
2.17 Cash dividends to equity holders
The Company recognizes a liability to make cash distributions to equity holders when the distribution is
authorised and is no longer at the discretion of the Company, on or before the end of the reporting period
but not distributed at the end of the reporting period. A corresponding amount is recognized directly in
equity.
2.18 Exceptional items
Exceptional items include income or expense that are considered to be part of ordinary activities,
however are of such significance and nature that separate disclosure enables the user of the financial
statements to understand the impact in a more meaningful manner.
Following are considered as exceptional items -
a) Gain or loss on disposal of investments to wholly owned subsidiaries at higher or lower than the
cost / book value
b) Write down of investments in subsidiaries, jointly controlled entities and associates which are
carried at cost in accordance with IND AS 27 to recoverable amount, as well as reversals of such write
down.
c) Impact of any retrospective amendment requiring any additional charge to profit or loss.
2.19 Critical estimates and judgements
The preparation of financial statements in conformity with the recognition and measurement principles of
Ind AS that requires management to make accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in applying the Company’s accounting
policies. The estimates and assumptions used in the accompanying financial statements are based upon
Management’s evaluation of the relevant facts and circumstances as at the date of the financial
statements. Actual results could differ from these estimates.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a
material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in
respect of impairment of non-current investments and has been discussed below. Key source of estimation of
uncertainty in respect of current tax expense and payable, employee benefits and fair value of unlisted
subsidiary entities have been discussed in their respective policies.
2.20 Estimation of Impairment on Non-Current Investment
The Company carries reviews its carrying value of investments carried at amortised cost annually, or more
frequently when there is an indication for impairment. If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for.
Estimates and judgments are continually evaluated. They are based on historical experience and other
factors, including expectation of future events that may have a financial impact on the Company and that are
believed to be reasonable under the circumstances.
103.9 (4.12%)