1.1 Revenue recognition
The Company offers a complete range of network solutions like Internet, Network Management Services, Data Centre
and Co-Location Services and Enterprise Mailing Solutions etc and derives revenues primarily from business IT
services comprising of software development and related services, consulting and package implementation.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects
the consideration we expect to receive in exchange for those products or services.
Revenue from Online information and database access or retrieval recognized as the service is performed on the basis
of actual usage of the company network in accordance with contractual obligation and is recorded net of Goods
&service tax
Company provided specialised features to the subscribers which entitle them to access the network of the company, in
such case the revenue is recognised when such features are activated and used by the subscriber.
Products and platforms:
The Company offers a complete range of network solutions like Internet, Network Management Services, Data Centre
and Co-location Services and Enterprise Mailing Solutions etc and derives revenues in the way of sale of products, sale
of Bandwidth Services, Web Solutions & ITES (Exports).
Revenue includes only the gross inflows of economic benefits received a receivable by the entity on its own account.
Amounts collected on behalf of third parties such as sales taxes, goods and services taxes and value added taxes are
not economic benefits which flow to the entity and do not result in increases in equity. The company presents revenues
net of taxes in its statement of Profit and Loss.
Other Income
Other income is comprised primarily of interest income, Rental income and exchange gain / loss on translation of other
assets and liabilities. Interest income is recognized using the effective interest method.
1.2 Leases
Effective 1 April 2019, the Company adopted Ind AS 116 “Leases” and applied the standard to all lease contracts
existing on 1 April 2019 using the modified retrospective method. Comparatives as at and for the year ended 31 March
2019 have not been retrospectively adjusted and therefore will continue to be reported under the accounting policies
applicable for previous year, The determination of whether an arrangement is (or contains) a lease is based on the
substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset
or assets, even if that right is not explicitly specified in an arrangement. Lessee Policy effective 1 April 2019 the
Company’s lease asset classes primarily consist of leases for Land, buildings and colocations spaces. The Company
assesses whether a contract contains a lease, at inception of a contract. Acontract 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. To assess
whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the
contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease.
1.3 Foreign currency Transactions.
Functional currency
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees
(rounded off wherever required)
Transactions and translations
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the time of the
transaction.
Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at
exchange rates in effect at the Balance Sheet date. 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.
Exchange difference on monetary items is recognised in the Statement of Profit and Loss in the period in which it arises
except for;
(a) Exchange difference on foreign currency borrowings relating to depreciable capital asset is included in cost of assets.
(b) Exchange difference on foreign currency transactions, on which receipt and/ or payments is not planned, initially
recognised in Other Comprehensive Income and reclassified from Equity to profit and loss on repayment of the
monetary items.
The results and financial position of foreign operations with functional currency different from the presentation currency, are
translated into the presentation currency as follows:
(a) Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at
the date of that consolidated statement of financial position;
(b) income and expenses for each consolidated statement of comprehensive income are translated at average exchange
rates (unless average rate is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
(c) All resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated into rupee, the functional currency of the company, at the exchange rates at the reporting
date. Exchange difference arising is recognised in other comprehensive income and accumulated in equity, except to
the extent that the exchange differences is allocated to the non-controlling interests.
1.4 Borrowing costs
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of
such assets up to the commencement of commercial operations. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. Other borrowing costs are recognised as an expense in the year
in which they are incurred.
Borrowing cost includes interest incurred in connection with the arrangement of borrowings to the extent they are
regarded as an adjustment to the interest cost.
1.5 Taxes on Income Tax and Deferred Tax
Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the
Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is
recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the
amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been
enacted or substantively enacted by the Balance Sheet date. Provision for income tax is made on the basis of taxable
income for the year at the current rates
Deferred tax represents the effect of temporary difference between carrying amount of assets and liabilities in the
consolidated financial statements and the corresponding tax base used in the computation of taxable income. Deferred
income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax
liabilities are generally accounted for all taxable temporary differences. Deferred tax asset is recognised for all
deductible temporary differences, carried forward of unused tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which such deductible temporary differences can be utilised.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the
recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Deferred tax assets/ liabilities are not recognised for initial recognition of Goodwill or on an asset or liability in a
transaction that is not a business combination and at the time of transaction affects neither the accounting profit nor
taxable profit or loss. MAT credit is recognised as an asset, only if it is probable that the Company will pay normal income
tax during the Specified period.
1.6 Earnings per share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company
and includes post tax effect of any exceptional item by the weighted average number of equity shares outstanding
during the period excluding the shares owned by the Trust, outstanding during the period
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company
by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the
weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are
deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are
determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues including for changes effected prior to the approval of the financial
statements by the Board of Directors.
1.7 Property, plant and equipment (PPE)
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses if any. Cost
comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended
use. Any trade discounts and rebates are deducted in arriving at the purchase price. The Company identifies and
determines separate useful lives for each major component of the property, plant and equipment, if they have a useful
life that is materially different from that of the asset as a whole.
Cost of an item of PPE comprises of its purchase price including import duties and non-refundable purchase taxes after
deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its
intended use and present value of estimated costs of dismantling and removing the item and restoring the site on which
It is located.
Expenses on existing property, plant and equipment, including day-to-day repairs, maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for the year during which such expenses are incurred.
Gains or losses arising from de recognition of assets 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 and loss when the asset is
derecognized.
Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is
classified as capital advances under other non-current assets and the cost of assets not ready to use before such date
are disclosed under ‘Capital work-in-progress’. 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.
1.8 Depreciation
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life as per Ind AS 16 and is
provided on a Reduced Balance Method basis over the useful lives as prescribed in Schedule II to the Act or as per
technical assessment. Depreciation is charged on a pro-rata basis for assets purchased /sold during the year.
The management’s estimates of the useful lives of various assets for computing depreciation are as follows:
The useful lives as given above best represent the period over which the management expects to use these assets, based on
technical assessment. The estimated useful lives for these assets are therefore different from the useful lives prescribed
under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial
year-end and adjusted prospectively, if appropriate.
1.9 Intangible assets and amortisation
1. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization and accumulated impairment losses. Cost includes all
direct costs relating to acquisition of Intangible assets and borrowing cost relating to qualifying assets.
2. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
4. Intangible assets 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 year. The estimated useful life of an identifiable
intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other
economic factors (such as the stability of the industry, and known technological advances), and the level of
maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and
useful lives are reviewed periodically including at each financial year end.
5. 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.
6. 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 recognized in the statement of profit and loss when the
asset is derecognized. Any gain or loss on disposal of an item of Intangible Assets is recognized in statement of profit
and loss.
1.10 Inventories
Stock-in-trade, stores and spares are accounted for at cost and all other costs incurred in bringing the inventory to their
present location and condition, determined on weighted average basis or net realizable value, whichever is less Net
realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
The company dealing in business of Bandwidth & Software services and does not have any Inventory.
1.11 Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at bank and cash in hand and short-term deposits with
banks that are readily convertible into cash which are subject to insignificant risk of changes in value and are held for the
purpose of meeting short-term cash commitments.
1.12 Statement of Cash Flows (Cash Flow Statement)
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash
flows from operating, investing and financing activities of the Company are segregated.
1.13 Employee benefits
1. Provident Fund: Employees of the Company receive benefits under the provident fund, a defined benefit plan. The
employee and employer each make monthly contributions to the plan. A portion of the contribution is made to the
provident fund trust managed by the Company or Government administered provident fund. The liability is actuarially
determined (using the projected unit credit method) at the end of the year. The contributions are charged to the
statement of profit and loss in the year when employee renders the related service. There are no other obligations other
than the contribution payable to the respective authorities.
2. Gratuity:
The Company provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”) covering eligible employees.
The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with
the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an
independent actuary, at each Balance Sheet date using the projected unit credit method.
3. Compensated Absences:
The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature.
The expected cost of accumulating compensated absences is determined by Estimation Basis.
4. The actuarial valuation is done at the end of the year. Actuarial gains/losses are immediately taken to statement of profit
and loss and are not deferred.
1.14 Investments in Subsidiaries and Associates
The company’s investment in its Subsidiaries and Associates is carried at cost.
|