2.1 Basis of preparation
a) Statement of Compliance
The financial statements of the Company have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ('the Act')
read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to
time and other relevant provisions of the Act, as applicable.
Accounting 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 the accounting policy hitherto in use.
b) 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 entity operates ('the functional currency'). The
financial statements are prepared in Indian rupees (INR) which is the functional and presentation
currency.
c) Basis of measurement
The financial statements have been prepared under historical cost convention basis, except for
the following material items which are measured at fair value as required by relevant Ind AS:
i) Certain financial assets and financial liabilities
ii) Defined benefit plans
2.2 Material Accounting policies
a) Presentation and disclosure of financial statements
All assets and liabilities have been classified as current and non-current as per the Company's
normal operating cycle and other criteria set out in the division II of Schedule III of the
Companies Act, 2013, for a Company whose financial statements are made in compliance with
the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued
thereafter. Based on the nature of business and their realization in cash and cash equivalents,
12 months have been considered by the Company for the purpose of current / non-current
classification of assets and liabilities. .^u'Ss
Deferred tax assets and liabilities are classified as non-current assets and liabilities as the case
may be.
b) Property, plant and equipment & Depreciation
i) All Property, Plant and Equipment are stated at cost of acquisition less accumulated
depreciation and accumulated impairment losses, if any. Cost of property, plant and
equipment includes non-refundable taxes and duties, borrowing cost directly attributable
to the qualifying asset and any directly attributable costs of bringing the asset to its working
condition and location and present value of the expected cost for the
dismantling/decommissioning of the asset.
ii) Capital work-in-progress comprises of cost incurred on property, plant and equipment not
yet ready for their intended use at the Balance Sheet date. Advances paid towards the
acquisition of property, plant and equipment outstanding at each balance sheet date are
classified as capital advances under other non-current assets.
iii) Property, plant and equipment are eliminated from financial statements, either on disposal
or when retired from active use. Losses arising in the case of retirement of property, plant
and equipment and gains or losses arising from disposal of property, plant and equipment
are recognised in the statement of profit and loss in the year of occurrence.
iv) Subsequent expenditures relating to property, plant and equipment are 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. Repair and maintenance costs
are recognized in the Statement of Profit and Loss when incurred.
v) When parts of an item of property, plant and equipment have different useful lives, they
are accounted for as a separate item (major components) of property, plant and
equipment.
vi) The carrying amount of an item of property, plant and equipment shall be derecognised:
(a) on disposal; or
(b) when no future economic benefits are expected from its use or disposal
vii) Depreciation on property, plant and equipment
a) Depreciation on property, plant and equipment (other than freehold land and capital
work in progress) is provided on WDV over the useful lives of the relevant assets net
of residual value whose lives are in consonance with the lives mentioned in Schedule
II of the Companies Act, 2013, except the case where individual assets whose cost
does not exceed five thousand rupees has been provided fully in the year of
capitalization.
b) In the case of assets purchased, sold or discarded during the year, depreciation on
such assets is calculated on a pro-rata basis from the date of such addition or as the
case may be, upto the date on which such asset has been sold or discarded.
c) The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each balance sheet date to reflect the expected pattern of
consumption of the future benefits embodied in the properties, plant and equipment
and in case of any changes, effect of the same is given prospectively.
d) Depreciation of an asset ceases at the earlier of the date that the asset is classified as
held for sale (or included in a disposal group that is classified as held for sale) in
accordance with Ind AS 105 and the date that the asset is derecognised.
c) Intangible assets & Amortisation
i. Acquired intangible assets:
Intangible assets are recognized when the Company controls the asset, it is probable that
future economic benefits attributed to the asset will flow to the Company and the cost of
the asset can be reliably measured. At initial recognition, intangible assets are recognized
at cost. Intangible assets are carried at cost less accumulated amortization and
accumulated impairment loss; if any.
ii. Intangible assets under development comprise of cost incurred on intangible assets under
development that are not ready for their intended use as at the balance sheet date.
iii. Subsequent expenditures related to an item of intangible assets are added to its carrying
amount when it is probable that future economic benefits deriving from the cost incurred
will flow to the enterprise and the cost of the item can be measured reliably.
iv. The useful lives and methods of amortisation of intangible assets are reviewed at each
balance sheet date to reflect the expected pattern of consumption of the future benefits
embodied in the intangible assets and in case of any changes, effect of the same is given
prospectively.
d) Impairment of non-financial assets
Assets are evaluated for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. For the purpose of impairment testing,
the recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use)
is determined on an individual asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In such cases, the recoverable amount is
determined for the CGU to which the asset belongs. If such assets are considered to be
impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by
the amount by which the carrying value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed in the statement of profit and loss if there
has been a change in the estimates used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable amount, provided that this amount
does not exceed the carrying amount that would have been determined (net of any
accumulated amortization or depreciation) had no impairment loss been recognized for the
asset in prior years.
e) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of the respective asset till such time the asset
is ready for its intended use or sale. A qualifying asset is an asset which necessarily takes a
substantial period of time to get ready for its intended use or sale. All other borrowing costs are
expensed in the period in which they occur. Borrowing costs consist of interest expenses
calculated as per effective interest method, exchange difference arising from foreign currency
borrowings to the extent they are treated as an adjustment to the borrowing cost.
f) Operating Segments
The Company is engaged "Media Monitoring" services and the same constitutes a single
reportable business segment as per Ind AS 108. And hence segment reporting specified as per
IND AS 108 is not applicable.
g) Financial instruments
Initial Recognition
All financial instruments are recognized initially at fair value. Transaction costs that are
attributable to the acquisition of the financial asset (other than financial assets recorded at fair
value through profit or loss) are included in the fair value of the financial assets. Purchase or
sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trade) are recognized on trade date.
However, loans and borrowings and payables are recognized net of directly attributable
transaction costs and trade receivables are measured at their transaction price unless it contains
a significant financing component or pricing adjustments embedded in the contract.
Classification of financial assets
Financial assets are classified as 'equity instrument' if it is a non-derivative and meets the
definition of'equity' for the issuer. All other non-derivative financial assets are 'debt instrument'.
Subsequent Measurement
The classification of financial instruments depends on the objective of the business model for
which it is held. Management determines the classification of its financial instruments at initial
recognition.
Non-derivative financial assets:
Financial assets at amortised cost and the effective interest method
Debt instruments shall be measured at amortised cost if both of the following conditions are
met:
i. the asset is held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows and selling assets;
ii. the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest (SPPI) on the principal amount outstanding.
Debt instruments meeting these criteria are measured initially at fair value plus transaction
costs.
They are subsequently measured at amortised cost using the effective interest method less any
impairment, with interest recognised on an effective yield basis in investment income.
The effective interest method is a method of calculating the amortised cost of a debt instrument
and of allocating interest over the relevant period. The effective interest rate is the rate that
exactly discounts the estimated future cash receipts (including all fees on points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.
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The Company may irrevocably elect at initial recognition to classify a debt instrument that
meets the amortised cost criteria above as at Fair Value Through Profit & Loss (FVTPL) if that
designation eliminates or significantly reduces an accounting mismatch had the financial asset
been measured at amortised cost.
Equity instruments
At initial recognition, an irrevocable election is made (on an instrument-by-instrument basis) to
designate investments in equity instruments other than held for trading purpose at FVTOCI.
A financial asset is held for trading if:
• it has been acquired principally for the purpose of selling it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and has evidence of a recent actual pattern of short-term profit-taking;
or
• it is a derivative that is not designated and effective as a hedging instrument or a financial
guarantee.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends, are recognised in the OCI. There is no
recycling of the amounts from OCI to the statement of profit and loss, even on sale of
investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity investments designated as FVTOCI are not subject to impairment assessment.
Equity instruments included within the FVTPL category are measured at fair value with all fair
value changes recognised in the statement of profit and loss.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that do not meet the criteria of classifying as amortised cost or fair value
through other comprehensive income described above, or that meet the criteria, but the entity
has chosen to designate as at FVTPL at initial recognition, are measured at FVTPL.
Investments in equity instruments are classified as at FVTPL, unless the Company designates
an investment that is not held for trading at FVTOCI at initial recognition.
Financial assets classified at FVTPL are initially measured at fair value excluding transaction
costs.
Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses
arising on remeasurement recognised in the statement of profit and loss.
Dividend income on investments in equity instruments at FVTPL is recognised in the statement
of profit and loss in investment income when the Company's right to receive the dividends is
established, it is probable that the economic benefits associated with the dividend will flow to
the entity; and the amount of the dividend can be measured reliably.
Impairment of financial assets
On initial recognition of the financial assets, a loss allowance for expected credit loss is
recognised for debt instruments at amortised cost and FVTOCI. For debt instruments that are
measured at FVTOCI, the loss allowance is recognised in other comprehensive income in the
statement of profit and loss and does not reduce the carrying amount of the financial asset in
the balance sheet.
Expected credit loss of a financial instrument is measured in a way that reflects:
i) an unbiased and probability-weighted amount that is determined by evaluating a range
of possible outcomes;
ii) the time value of money; and
iii) reasonable and supportable information that is available without undue cost or effort at
the reporting date about past events, current conditions and forecasts of future
economic conditions.
At each reporting date, the Company assesses whether the credit risk on a financial instrument
has increased significantly since initial recognition.
When making the assessment, the Company compares the risk of a default occurring on the
financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and consider reasonable and supportable
information, that is available without undue cost or effort, that is indicative of significant
increases in credit risk since initial recognition.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly
since initial recognition, the Company measures the loss allowance for that financial instrument
at an amount equal to 12-month expected credit losses. If the credit risk on that financial
instrument has increased significantly since initial recognition, the Company measures the loss
allowance for a financial instrument at an amount equal to the lifetime expected credit losses.
The amount of expected credit losses (or reversal) that is required to adjust the loss allowance
at the reporting date is recognised as an impairment gain or loss in the statement of profit and
loss.
Derecognition of financial assets
The Company derecognises a financial asset on trade date only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another entity. If the Company neither
transfers nor retains substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Company recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Company retains substantially all the
risks and rewards of ownership of a transferred financial asset, the Company continues to
recognise the financial asset and also recognises a collateralised borrowing for the proceeds
received.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains
an option to repurchase part of a transferred asset), the Company allocates the previous
carrying amount of the financial asset between the part it continues to recognise under
continuing involvement, and the part it no longer recognises on the basis of the relative fair
values of those parts on the date of the transfer. The difference between the carrying amounts
allocated to the part that is no longer recognised and the sum of the consideration received for
the part no longer recognised and any cumulative gain or loss allocated to it that had been
recognised in other comprehensive income is recognised in the statement of profit and loss.
Cumulative gain or loss that had been recognised in other comprehensive income is allocated
between the part that continues to be recognised and the part that is no longer recognised on
the basis of the relative fair values of those parts.
Financial liabilities and equity instruments issued by the Company
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to
the substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by the Company are recognised
at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are classified as either 'financial liabilities at FVTPL' or 'other financial
liabilities'.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading
or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
i) it has been acquired or incurred principally for the purpose of repurchasing it in the
near term; or
ii) on initial recognition it is part of a portfolio of identified financial instruments that the
Company manages together and for which there is evidence of a recent actual pattern
of short-term profit taking; or
iii) It is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may also be designated as at
FVTPL upon initial recognition if:
i) such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
ii) the financial liability forms part of a Company of financial assets or financial liabilities
or both, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Company's documented risk management or investment strategy,
and information about the Companying is provided internally on that basis; or
iii) It forms part of a contract containing one or more embedded derivatives, and Ind-AS
109 'Financial Instruments' permits the entire combined contract to be designated as
at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognised in the statement of profit and loss, except for the amount of change
in the fair value of the financial liability that is attributable to changes in the credit risk of that
liability which is recognised in other comprehensive income.
The net gain or loss recognised in the statement of profit and loss incorporates any interest
paid on the financial liability.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of
transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective
interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial
recognition.
Reclassification of financial assets and liabilities
The Company determines classification of financial assets and liabilities on initial recognition.
After initial recognition, no re-classification is made for financial assets which are equity
instruments and financial liabilities. For financial assets which are debt instruments, a re¬
classification is made only if there is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent. The Company's senior
management determines change in the business model as a result of external or internal
changes which are significant to the Company's operations. Such changes are evident to
external parties. A change in the business model occurs when the Company either begins or
ceases to perform an activity that is significant to its operations. If the Company re-classifies
financial assets, it applies the re-classification prospectively from the re-classification date
which is the first day of the immediately next reporting period following the change in business
model. The Company does not re-state any previously recognised gains, losses (including
impairment gains or losses) or interest.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet
when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously. The
legally enforceable right must not be contingent on future events and must be enforceable in
the normal course of business and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.
Derivatives and hedge accounting
Derivatives are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently re-measured at their fair value. The method of recognising the resulting
gain or loss depends on whether the derivative is designated as a hedging instrument, and if
so, the nature of the item being hedged.
The Company designates certain derivatives as either:
i) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair
value hedge);
ii) hedges of a particular risk associated with a recognised asset or liability or a highly
probable forecast transaction (cash flow hedge); or
iii) Hedges of a net investment in a foreign operation (net investment hedge).
The Company documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. The Company also documents the nature of the risk
being hedged and how the Company will assess whether the hedging relationship meets the
hedge effectiveness requirements (including its analysis of the sources of hedge ineffectiveness
and how it determines the hedge ratio).
The full fair value of a hedging derivative is classified as a non-current financial asset or financial
liability when the residual maturity of the derivative is more than 12 months and as a current
financial asset or financial liability when the residual maturity of the derivative is less than 12
months.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges
are recorded in the statement of profit and loss, together with any changes in the fair value of
the hedged item that are attributable to the hedged risk.
Hedge accounting is discontinued when the Company revokes the hedging relationship, when
the hedging instrument expires or is sold, terminated, or exercised, or when it no longer
qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged
item arising from the hedged risk is amortised to the statement of profit and loss from that
date.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash flow hedges is recognised in other comprehensive income and accumulated under the
heading cash flow hedging reserve. The gain or loss relating to the ineffective portion is
recognised immediately in the statement of profit and loss, and is included in the 'other gains
and losses' line item.
Amounts previously recognised in other comprehensive income and accumulated in equity are
reclassified to the statement of profit and loss in the periods when the hedged item affects the
statement of profit and loss, in the same line as the recognised hedged item. However, when
the hedged forecast transaction results in the recognition of a non-financial asset or a non-
financial liability, the gains and losses previously recognised in other comprehensive income
and accumulated in equity are transferred from equity and included in the initial measurement
of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated,
or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised
in other comprehensive income and accumulated in equity at that time remains in equity and
is recognised when the forecast transaction is ultimately recognised in the statement of profit
and loss. When a forecast transaction is no longer expected to occur, the gain or loss
accumulated in equity is recognised immediately in the statement of profit and loss.
Fair value measurement
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. A fair value
measurement assumes 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 market or the most
advantageous market must be accessible to 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, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy based on the lowest level input that is significant
to the fair value measurement as a whole. The fair value hierarchy is described as below:
• Level 1 - unadjusted quoted price in active markets for identical assets and liabilities.
• Level 2 - Valuation techniques for which lowest level input that is significant to the fair
value measurement is directly or indirectly observable.
• Level 3 - Valuation techniques for which lowest level input that is significant to the fair
value measurement is directly or indirectly unobservable.
For assets and liabilities that are recognised in the financial statements at fair value on a
recurring basis, the Company determines whether transfers have occurred between levels in
the hierarchy by re-assessing categorization 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 fair value hierarchy.
h) Revenue recognition
Revenue from contracts with customers
Revenue from rendering of services is recognized at a point in time when the Company satisfies
the performance obligation. The company considers the terms of the contract and its customary
business practices to determine the transaction price.
Revenue is measured based on transaction price, which is the fair value of the consideration
received or receivable, stated net of discounts, and GST. Transaction price is recognised based
on the price specified in the contract, net of discounts.
Contract assets are recognized when there is excess of revenue earned over billings on
contracts. Contract assets are classified as unbilled receivables/revenue (only act of invoicing
is pending) when there is unconditional right to receive cash, and only passage of time is
required, as per contractual terms.
Unearned/deferred revenue 'contract liability' is recognized when there is billing in excess of
revenue.
Other income
o Interest income in respect of deposits which are measured at amortised cost or at fair
value through profit and loss or at fair value through other comprehensive income, is
recorded using 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.
o Dividend income on investment is accounted for in the year in which the right to receive
the payment is established.
i) Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. If the receivable is expected to be collected within a period of 12
months or less from the reporting date (or in the normal operating cycle of the business, if
longer), they are classified as current assets, otherwise as non-current assets.
Trade receivables are measured at their transaction price unless it contains a significant
financing component or pricing adjustments embedded in the contract.
Loss allowance for expected lifetime credit loss is recognised on initial recognition.
j) Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing
on the date of the transaction. As at the Balance Sheet date, foreign currency monetary assets
and liabilities are translated at closing exchange rate. The gains or losses resulting from such
translations are included in net profit in the Statement of Profit and Loss.
Non-monetary assets and non-monetary liabilities denominated in a foreign currency and
measured at fair value are translated at the exchange rate prevalent at the date when the fair
value was determined. Non-monetary assets and non-monetary liabilities denominated in a
foreign currency and measured at historical cost are translated at the exchange rate prevalent
at the date of the transaction.
Transaction gains or losses realized upon settlement of foreign currency transactions are
included in determining net profit for the period in which the transaction is settled. Revenue,
expense and cash flow items denominated in foreign currencies are translated into the relevant
functional currencies using the exchange rate in effect on the date of the transaction.
As per Appendix B to Ind AS 21, when an entity has received or paid advance contribution in a
foreign currency, transaction rate as on the date of receipt of advance is considered for
recognition of related asset, expenses or income.
k) Employee benefits
i) Short term employee benefits
Liabilities for wages and salaries, including 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 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) Post-employment benefits
a) Defined Contribution Plan
The defined contribution plan is a post-employment benefit plan under which the
Company contributes fixed contribution to a government administered fund and will
have no legal or constructive obligation to pay further contribution. The Company
makes Provident Fund contributions to defined contribution plans for all employees.
Under the Scheme, the Company is required to attribute a specified percentage of the
payroll costs to fund the benefits.
b) Defined benefit plan
The Company has defined benefit plans comprising gratuity benefits. The Company's
obligation towards gratuity liability is unfunded. The cost of providing benefits is
determined using the projected unit credit method, with actuarial valuations being carried
out at the end of each annual reporting period. Remeasurement, comprising actuarial
gains and losses, the effect of the changes to the asset ceiling ( if applicable) and the
return on plan assets (excluding net interest) , is reflected immediately in the balance
sheet with a charge or credit recognised in other comprehensive income in the period in
which they occur and is not reclassified to Statement of Profit and Loss. Past service cost
is recognised in Statement of Profit and Loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate at the beginning of the period to the
net defined benefit liability or asset.
iii) Compensated absences
The Company has benefits in the form of compensated absences. The present value of
such compensated absences is determined based on actuarial valuation using the projected
unit credit method.
Actuarial gains or losses arising on account of experience adjustment and the effect of
changes in actuarial assumptions are recognised immediately in the statement of profit and
loss as income or expense.
Gains or losses on the curtailment or settlement are recognised when the curtailment or
settlement occurs.
I) Leases
As a Lessee
o The Company's lease asset classes primarily consist of leases for office premises.
o At inception of a contract, the Company assesses whether a contract is, or contains, a
lease. 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.
o At commencement or on modification of a contract that contains a lease component,
the Company allocates the consideration in the contract to each lease and non-lease
component on the basis of their relative stand-alone prices.
o The Company recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprise of the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date net of lease incentive received, plus any
initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located.
o The right-of-use assets are 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 asset is depreciated using the
straight-line method from the commencement date over the shorter of lease term of
right-of-use asset.
o The lease liability is initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate. The lease liability is measured at amortised cost using the effective
interest method.
o The Company has elected not to recognise right-of-use assets and lease liabilities for
leases of low-value assets and short-term leases. The Company recognises the lease
payments associated with these leases as an expense on a straight-line basis over the
lease term.
o The Company determines the lease term as the non-cancellable period of a lease,
together with both periods covered by an option to extend the lease if the Company is
reasonably certain to exercise that option; and periods covered by an option to
terminate the lease if the Company is reasonably certain not to exercise that option. In
assessing whether the Company is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for the Company to exercise the
option to extend the lease, or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in the non-cancellable period of a
lease.
o Right-of-use assets and lease liability balances are adjusted on partial / full termination
of lease and corresponding gain / loss on such partial / full termination is charged to
other income / other expenses in the Statement of Profit and Loss.
As a Lessor:
Lease income from operating leases where the company is a lessor is recognized (net of GST)
in income on a straight-line basis over the lease term. The respective leased assets are included
in the balance sheet based on their nature.
m) Taxes on income
Tax expenses for the year comprises of current tax, deferred tax charge or credit and
adjustments of taxes for earlier years. In respect of amounts adjusted outside profit or loss (i.e.,
in other comprehensive income or equity), the corresponding tax effect, if any, is also adjusted
outside profit or loss.
The current Income Tax expense charge is calculated on the basis of the tax laws enacted at
the end of the reporting period. Management establishes proper provisions on the basis of
amounts expected to be paid to the tax authorities.
Deferred Income Tax is provided in full, using the Balance Sheet Method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. Deferred income tax is determined using the tax rates that have been
enacted at the end of the reporting period.
Deferred tax assets are recognized for all deductible temporary differences and unused tax
losses only if it is probable that future taxable amounts will be available to utilize those temporary
differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets and liabilities. Current tax assets and tax 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.
Current and deferred tax is recognized in the statement of Profit and Loss, except to the extent
that it relates to items recognized in other comprehensive income or directly in equity. In this
case, the tax is also recognized in Other Comprehensive Income or directly in Equity,
respectively.
n) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial institutions, other short term, highly
liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
o) Cash flow statement
Cash Flows are reported using the indirect method, whereby net profit before tax is adjusted for
the effects of transactions of non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and item of income or expenses associated with investing
or financing cash flows. The cash flows from operating, investing and financing activities of the
Company are segregated.
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