2. Material accounting policies followed by
company
2.1 Basis of preparation
The standalone financial statements of the Company
have been prepared in accordance with the Indian
Accounting Standards ('Ind AS') specified in the
Companies (Indian Accounting Standards) Rules, 2015
(as amended) under Section 133 of the Companies
Act 2013 (the “accounting principles generally
accepted in India").
The accounting policies are applied consistently to all
the periods presented in the financial statements.
The standalone financial statements have been
prepared on a historical cost basis, except for the
following assets and liabilities which have been
measured at fair value:
- Certain financial assets and liabilities are
measured at fair value (refer accounting policy
regarding financial instruments).
All amounts disclosed in the financial statements and
notes have been rounded off to the nearest lakhs as per
the requirement of Schedule III, unless otherwise stated.
The standalone financial statements are presented
in Indian Rupees (INR), which is also the Company's
functional currency.
2.2 Summary of material accounting policies
a) Current versus non- current classification
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when it is:
• Expected to be realised or intended to sold or
consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months
after the reporting period, or
• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after
the reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period
The Company classifies all other liabilities
as non-current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.
The Company has identified twelve months as its
operating cycle.
b) Foreign currencies
Transactions and Balances
Transactions in foreign currencies are initially recorded
by the Company at their respective functional currency
spot rates at the date the transaction first qualifies
for recognition. However, for practical reasons,
the Company uses monthly average rate if the
average approximates the actual rate at the date of
the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Exchange differences arising on the settlement of
monetary items or on restatement of the Company's
monetary items at rates different from those at
which they were initially recorded during the period,
or reported in previous financial statements, are
recognized as income or as expenses in the period in
which they arise. They are deferred in equity if they
relate to qualifying cash flow hedges.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the
initial transactions.
c) Fair value measurement
The Company measures financial instruments, such
as, derivatives and certain investments at fair value at
each reporting/ balance sheet date.
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must
be accessible by the Company.
The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which inputs
are inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly or indirectly
• Level 3 — Valuation techniques for which inputs
are unobservable inputs for the asset or liability
For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.
For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.
Other fair value related disclosures are given in the
relevant notes :
• Disclosures for valuation methods, significant
estimates and assumptions (Note 33)
• Quantitative disclosures of fair value measurement
hierarchy (Note 33)
• Financial instruments (including those carried at
amortised cost) (Note 33)
d) Revenue recognition and other income
Revenue from contracts with customers is recognised
when control over services are transferred to the
customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange
for those services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the contract.
If the consideration in a contract includes a variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable
consideration is estimated at contract inception and
constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated
uncertainty with the variable consideration is
subsequently resolved. The Company applies the most
likely amount method or the expected value method
to estimate the variable consideration in the contract.
The selected method that best predicts the amount
of variable consideration is primarily driven by the
number of volume thresholds contained in the contract.
The most likely amount is used for those contracts with
a single volume threshold, while the expected value
method is used for those with more than one volume
threshold. The Company then applies the requirements
on constraining estimates in order to determine the
amount of variable consideration that can be included
in the transaction price and recognised as revenue.
The Company applies the practical expedient to not
to disclose the amount of the remaining performance
obligations for contracts with original expected
duration of less than one year.
Revenue excludes taxes collected from customers. The
Company has concluded that it is the principal in all of its
revenue arrangements since it is the primary obligor in
all the revenue arrangements as it has pricing latitude
and is also exposed to inventory and credit risks.
Goods and Services Tax (GST) is not received by
the Company on its own account. Rather, it is tax
collected on behalf of the government. Accordingly, it is
excluded from revenue.
Contract asset represents the Company's right
to consideration in exchange for services that the
Company has transferred to a customer when that
right is conditioned on something other than the
passage of time.
When there is unconditional right to receive cash, and
only passage of time is required to do invoicing, the
same is presented as unbilled receivable.
A contract liability is recognised if a payment is
received or a payment is due (whichever is earlier)
from a customer before the Company transfers the
related goods or services and the Company is under
an obligation to provide only the goods or services
under the contract. Contract liabilities are recognised
as revenue when the Company performs under the
contract (i.e., transfers control of the related goods or
services to the customer).
The specific recognition criteria described below must
also be met before revenue is recognised:
Online Advertising
Revenue from digital platforms by display of internet
advertisements is typically contracted for a period of one
to twelve months. Revenue in this respect is recognized
as and when advertisement is published/ displayed.
Fever Audio Tool
Revenue is recognized on monthly basis for running in¬
store music content in active stores as per the terms
agreed with the customer.
Interest income
For all debt instruments measured at amortised cost,
interest income is recorded using the effective interest
rate (ElR). 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 amortised 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 other
income in the statement of profit and loss.
e) Taxes
Current income tax
Tax expense is the aggregate amount included in the
determination of profit or loss for the period in respect
of current tax and deferred tax.
Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the
Income Tax Act, 1961.
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted
or substantively enacted, at the reporting date.
Current income tax relating to items recognised
outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Current tax items are recognised is correlation to the
underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.
Appendix C to Ind AS 12, Income Taxes dealing with
accounting for uncertainty over income tax treatments
does not have any material impact on financial
statements of the Company.
Deferred tax
Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences except:
• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss
• In respect of taxable temporary differences
associated with investments in subsidiaries,
when the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future
Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to
the extent that it is probable that taxable profit
will be available against which the deductible
temporary differences, and the carry forward of
unused tax credits and unused tax losses can be
utilised, except:
• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss
• In respect of deductible temporary differences
associated with investments in subsidiaries,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable future
and taxable profit will be available against which
the temporary differences can be utilised
The carrying amount of deferred tax assets is reviewed
at each reporting 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 assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset
if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and
assets on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.
GST/ value added taxes paid on acquisition of assets or
on incurring expenses
Expenses and assets are recognised net of the amount
of GST/ value added taxes paid, except:
• When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable
• When receivables and payables are stated with
the amount of tax included
The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the balance sheet.
f) Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in
which the expenditure is incurred.
The useful life of intangible assets is assessed as either
finite or indefinite.
Intangible assets with indefinite useful life are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition
of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the
asset) is included in the statement of profit or loss.
Intangible assets with finite life are amortized
on straight line basis using the estimated useful
life as follows:
Gains or Losses arising from de-recognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the statement
of profit or loss when the asset is derecognised.
g) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessariLy
takes a substantial period 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 period 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.
h) Leases
A contract is, or contains, a Lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration.
Company as a lessee
The Company recognises right-of-use asset
representing its right to use the underLying asset
for the Lease term at the Lease commencement
date. The cost of the right-of-use asset measured at
inception shaLL comprise of the amount of the initiaL
measurement of the Lease LiabiLity adjusted for any
Lease payments made at or before the commencement
date Less any Lease incentives received, pLus any initiaL
direct costs incurred and an estimate of costs to be
incurred by the Lessee in dismantLing and removing the
underLying asset or restoring the underLying asset or
site on which it is Located. The right-of-use assets is
subsequently measured at cost Less any accumulated
depreciation, accumuLated impairment Losses, if any
and adjusted for any remeasurement of the Lease
Liability. The right-of-use assets is depreciated using
the straight-Line method from the commencement date
over the shorter of Lease term or usefuL Life of right-
of-use asset. The estimated useful Lives of right-of-use
assets are determined on the same basis as those of
property, plant and equipment. Right-of-use assets are
tested for impairment whenever there is any indication
that their carrying amounts may not be recoverable.
Impairment Loss, if any, is recognised in the statement
of profit and Loss.
The Company 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 Company
uses incremental borrowing rate. The Lease payments
shaLL include fixed payments, variable Lease payments,
residual value guarantees, exercise price of a purchase
option where the Company is reasonabLy certain to
exercise that option and payments of penaLties for
terminating the Lease, if the Lease term refLects the
Lessee exercising an option to terminate the Lease.
After the commencement date, the amount of Lease
Liabilities is increased to reflect the accretion of interest
and reduced for the Lease payments made. 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.
The Company recognises the amount of the re¬
measurement of Lease LiabiLity due to modification as
an adjustment to the right-of-use asset and statement
of profit and Loss depending upon the nature of
modification. Where the carrying amount of the right-
of-use asset is reduced to zero and there is a further
reduction in the measurement of the Lease LiabiLity, the
Company recognises any remaining amount of the re¬
measurement in statement of profit and Loss.
The Company has elected not to apply the requirements
of Ind AS 116 to short-term Leases of aLL assets that have
a Lease term of 12 months or Less and Leases for which
the underlying asset is of Low value. The Lease payments
associated with these Leases are recognised as an
expense on a straight-Line basis over the Lease term.
As a practical expedient a Lessee (the company) has
eLected, by cLass of underLying asset, not to separate
Lease components from any associated non-Lease
components. A Lessee (the company) accounts for
the Lease component and the associated non-Lease
components as a singLe Lease component.
Company as a lessor
At the inception of the tease the Company classifies
each of its teases as either an operating tease or
a finance tease. The Company recognises tease
payments received under operating teases as income
on a straight- tine basis over the tease term. In case
of a finance tease, finance income is recognised
over the tease term based on a pattern reftecting a
constant periodic rate of return on the tessor's net
investment in the tease.
i) Employee benefits
Short term employee benefits and defined contribution
plans:
Att emptoyee benefits payabte/avaitabte within twetve
months of rendering the service are ctassified as short¬
term emptoyee benefits. Benefits such as sataries,
wages and bonus etc. are recognised in the statement
of profit and toss in the period in which the emptoyee
renders the retated service.
Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company has no
obtigation, other than the contribution payabte to the
provident fund. The Company recognizes contribution
payabte to the provident fund scheme as an expense,
when an emptoyee renders the retated service. If the
contribution payabte to the scheme for service received
before the batance sheet date exceeds the contribution
atready paid, the deficit payabte to the scheme is
recognized as a tiabitity after deducting the contribution
atready paid. If the contribution atready paid exceeds
the contribution due for services received before the
batance sheet date, then excess is recognized as an
asset to the extent that the pre-payment witt tead to, for
exampte, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a defined benefit scheme. The defined
benefit obtigation is Computed by actuaries using the
projected unit credit method.
Re-measurements, comprising of actuariat gains
and tosses, the effect of the asset ceiting, exctuding
amounts inctuded in net interest on the net defined
benefit tiabitity and the return on ptan assets (exctuding
amounts inctuded in net interest on the net defined
benefit tiabitity), are recognised immediatety in the
batance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which
they occur. Re-measurements are not rectassified to
profit or toss in subsequent periods.
Past service costs are recognised in profit or toss on
the eartier of:
• The date of the ptan amendment or
curtaitment, and
• The date that the Company recognises retated
restructuring cost
Net interest is catcutated by apptying the discount rate
to the net defined benefit tiabitity or asset.
The Company recognises the fottowing changes in the
net defined benefit obtigation as an expense in the
Statement of profit and toss:
• Service costs comprising current service
costs, past-service costs, gains and tosses on
curtaitments and non-routine setttements; and
• Net interest expense or income
Termination benefits
The Company recognizes termination benefit as a
tiabitity and an expense when the Company has a present
obtigation as a resutt of past event, it is probabte that
an outftow of resources embodying economic benefits
witt be required to settte the obtigation and a retiabte
estimate can be made of the amount of the obtigation. If
the termination benefits fatt due more than 12 months
after the batance sheet date, they are measured at
present vatue of future cash ftows using the discount
rate determined by reference to market yietds at the
batance sheet date on government bonds.
Compensated Absences
Accumutated teave, which is expected to be utitized
within the next 12 months, is treated as short term
emptoyee benefit. The Company measures the expected
cost of such absences as the additionat amount that it
expects to pay as a resutt of the unused entittement
that has accumutated at the reporting date.
The company treats leaves expected to be carried
forward for measurement purposes. Such compensated
absences are provided for based on the actuarial
valuation using the projected unit credit method at
the year-end. Actuarial gains/losses are immediately
taken to the statement of profit and loss and are not
deferred. The company presents the entire leave as a
current liability in the balance sheet, since it does not
have an unconditional right to defer its settlement for
12 months after the reporting date. Where Company
has the unconditional legal and contractual right to
defer the settlement for a period beyond 12 months,
the same is presented as non-current liability.
j) Impairment of non-financial assets
The Company 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 Company 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 Company's or other available
fair value indicators.
The Company bases its impairment calculation on
detailed budgets and forecast calculations, which are
prepared separately for each of the Company's CGUs
to which the individual assets are allocated. These
budgets and forecast calculations generally cover
a period of five years. For longer periods, a long¬
term growth rate is calculated and applied to project
future cash flows after the fifth year. To estimate cash
flow projections beyond periods covered by the most
recent budgets/forecasts, the Company 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.
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 Company
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 statement of profit or loss unless the
asset is carried at a revalued amount, in which case,
the reversal is treated as a revaluation increase.
Intangible assets with indefinite useful lives are
tested for impairment annually at the CGU level, as
appropriate, and when circumstances indicate that the
carrying value may be impaired.
k) Investments in subsidiary
An investor, regardless of the nature of its involvement
with an entity (the investee), shall determine whether it
is a parent by assessing whether it controls the investee.
An investor controls an investee when it 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.
Thus, an investor controls an investee if and only if the
investor has all the following:
(a) power over the investee;
(b) exposure, or rights, to variable returns from its
involvement with the investee and
(c) the ability to use its power over the investee to
affect the amount of the investor's returns.
The Company has elected to recognize its investments
in subsidiary companies at cost in accordance with
the option available in Ind-AS 27, 'Separate Financial
Statements'. Except where investments accounted for at
cost shall be accounted for in accordance with Ind-AS
105, Non-current Assets Held for Sale and Discontinued
Operations, when they are classified as held for sale.
Investment carried at cost will be tested for impairment
as per Ind-AS 36.
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