2 Material Accounting Policies
This note provides a list of the material accounting policies adopted in the preparation of these financial statements. These
policies have been consistently applied to all the years presented, unless otherwise stated.
2.a) Basis of preparation
(i) Compliance with Ind AS
These financial statements (‘financial statements’) have been prepared in accordance with the Indian Accounting Standard (‘Ind
AS’) notified under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules
2015, as amended from time to time by the Ministry of Corporate Affairs (‘MCA’).
The financial statements are based on the classification provisions contained in Ind AS 1, ‘Presentation of Financial Statements’
and division II of schedule III of the Companies Act 2013. Further, for the purpose of clarity, various items are aggregated in
the statement of profit and loss and balance sheet. Nonetheless, these items are dis-aggregated separately in the notes to the
financial statements, where applicable or required. All the amounts included in the financial statements are reported in million
of Indian Rupees (‘Rupees’ or ‘Rs.’) and are rounded to the nearest Million with two decimals, except per share data and unless
stated otherwise.
All assets and liabilities have been classified as current and non-current as per the Company’s normal operating cycle. Based
on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash
and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12
months.
(ii) Basis of measurement
The financial statements have been prepared on a historical cost basis, except for the following:
• Financial assets and liabilities are measured at fair value or amortised cost
• Defined benefit plans - plan assets measured at fair value
• Share-based payments (ESOP’s) are measured at fair value
b) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the
entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (Rs.), which is the Company’s
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at period end exchange rates are generally recognised in the Statement
of Profit or Loss. They are deferred in equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss,
within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net
basis within other gains/ (losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
c) Revenue recognition
Revenue is measured at the transaction price of the consideration received or receivable. Amounts disclosed as revenue are
net of returns, trade allowances, rebates, discounts and taxes.
When two or more revenue generating activities or deliverables are provided under a single arrangement, each deliverable
that is considered to be a separate deliverable is accounted separately. Where the contracts include multiple performance
obligations, the transaction price is allocated to each performance obligation based on the standalone selling prices. Where
the standalone selling prices are not directly observable, these are estimated based on expected cost plus margin or residual
method to allocate the total transaction price. In cases of residual method, the standalone selling price is estimated by reference
to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the
contract.
Services are provided under time and material contracts and fixed price contracts. Revenue from providing services is
recognised over a period of time in the accounting period in which services are rendered. The revenue from time and material
contracts is recognised at the amount to which the Company has right to invoice.
In respect of fixed price contracts, revenue is recognised based on the technical evaluation of utilization of services as per
the proportionate completion method when no significant uncertainty exists regarding the amount of consideration that will
be determined from rendering the service. The customer pays the fixed amount based on a payment schedule. If the services
rendered by the Company exceed the payment, a contract asset is recognised. If the payment exceed the services rendered,
a contract liability is recognised. Revenue from training is recognised over the period of delivery. The foreseeable losses on
completion of contract, if any, are provided for.
Estimates of revenues, costs or extent of progress towards completion are revised if circumstances change. Any resulting
increase or decrease in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that
give rise to the revision become known to management.
On certain contracts, where the Company acts as agent, only commission and fees receivable for services rendered are
recognised as revenue. Any third party costs incurred on behalf of the principal that are rechargeable under the contractual
arrangement are not included in revenue.
Revenue in respect of sale of courseware and other physical deliverables is recognised at a point in time when these are
delivered, the legal title is passed and the customer has accepted the courseware and other physical deliverables.
Revenues in excess of invoicing are treated as contract assets while invoicing in excess of revenues are treated as contract
liabilities. The Company classifies amounts due from customer but not billed as unbilled revenue or contract assets depending
on whether the Company has an unconditional right to receive the sale consideration. If only the passage of time is required
before receipt of consideration is due, then the amounts due are classified as unbilled revenue under other financial assets,
otherwise, such amounts are classified as contract assets under other current assets.
d) Other Income
Interest income is recognized using effective interest rate method taking into account the amount outstanding and the rate of
Interest applicable (refer policy to investment and other financial assets).
Other income mainly comprises interest income on bank and other deposits, profit on sale of property, plant and equipments and
mutual fund and exchange differences. Dividend income is recognized when the right to receive payment is established.
e) Income taxes
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively.
Current income taxes
The current income tax expense includes income taxes payable by the Company. The current tax payable by the Company in
India is Indian income tax payable on worldwide income after taking credit for tax relief available.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid
and income tax provision.
Deferred income taxes
Deferred income tax is provided in full, using the liability 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 tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when
the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
f) 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.
(a) Company as a lessee
The Company accounts for each lease component within the contract as a lease separately from non-lease components of
the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone
price of the lease component and the aggregate standalone price of the non-lease components.
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 lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment
to the related right of use asset if the Company changes its assessment to whether it will exercise an extension or a
termination option.
Lease payments associated with short-term leases and low value leases are charged to the Statement of Profit and Loss
on a straight line basis over the term of the relevant lease.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.
(b) Company as a lessor
The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease
term.
g) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), or
• 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 will either be recorded in profit or loss or other comprehensive income.
For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the
time of initial recognition to account for the equity investment at fair value through other comprehensive income.
(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.
Financial Assets
Subsequent measurement of Financial assets depends on the Company’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its Financial
assets:
• Amortised Cost : Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost.
• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of the contractual cash
flows and for selling the financial assets, where the asset’s cash flow represents solely payments of principal and interest,
are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken
through Other Comprehensive Income (OCI), except for the recognition of impairment gains or losses, interest revenue
and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other
gains/ (losses).
• Fair value through profit or loss : Assets that do not meet the criteria for amortised cost or fair value through other
comprehensive income (FVOCI) are measured at fair value through profit or loss (FVTPL).
Equity Instrument
Investment in subsidiaries - Investment in subsidiaries are measured at cost less impairment loss, if any.
(iii) Impairment of financial assets
The Company recognises a loss allowance for expected credit losses on investments such as financial assets that are
measured at amortised cost or at FVOCI, trade receivables and contract assets, financial guarantee contracts, and certain
other financial assets measured at amortised cost such as deferred consideration receivable on disposal of subsidiaries.
The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Company recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit
loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of
both the current as well as the forecast direction of conditions at the reporting date, including time value of money where
appropriate.
For all other financial instruments, the Company recognises lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the 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 ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life
of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from
default events on a financial instrument that are possible within 12 months after the reporting date.
Investment in subsidiaries is tested for impairment annually, or more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
(iv) Derecognition of financial assets
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 entity 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 derecognised.
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 derecognised 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.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
h) Cash and cash equivalents
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. Bank overdrafts are shown as borrowings in current liabilities in the balance
sheet.
i) Trade receivables
Trade receivables are recognised initially at transaction price and subsequently adjusted for expected credit loss using the
effective interest method.
j) Inventories
Traded goods are stated at the lower of cost or net realisable value. Cost of traded goods comprises cost of purchases and all
other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items
of inventory on the basis of weighted average method. Costs of purchased inventory are determined after deducting rebates
and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
k) Property, plant and equipment
The Company had applied for the one-time transition exemption of considering the carrying cost on the transition date i.e. April
01,2016 as the deemed cost under Ind AS, regarded thereafter as historical cost.
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less
accumulated depreciation and accumulated impairment, if any. 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 recognised 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 derecognised when replaced.
All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated
useful lives as follows:
Depreciation is provided on a pro-rata basis on the straight-line method over the useful lives of the assets. The depreciation
charge for each period is recognised in the Statement of Profit and Loss. The residual values is considered as nil.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
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 proceeds with carrying amount. These are included in profit or loss
within other income/ (expenses).
l) Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company,
is classified as investment property. Investment property is measured initially at its cost, including related transaction costs
and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is
probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can
be measured reliably. All other repairs and maintenance costs are expensed when incurred.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use
and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or
loss in the period in which the property is derecognised.
m) Intangible assets
Computer software- Acquired
These Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software Tool/Platform and Content-Internally generated including intangible asset under development
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Development costs that
are directly attributable to the design and testing of identifiable and unique software products controlled by the Company are
recognised as intangible assets when the following criteria are met:
• it is technically feasible to complete the development so that it will be available for use;
• management intends to complete the content / products and use or sell it;
• there is an ability to use or sell the content / products;
• it can be demonstrated how the content / products will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the content / products
are available, and
• the expenditure attributable to the content / products during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the intangible include employee costs and an appropriate portion of
relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is available
for use.
n) Impairment testing of goodwill and intangible assets
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash¬
generating units that are expected to benefit from the business combination in which the goodwill arose. The units are identified
at the lowest level at which goodwill is monitored.
Other assets are tested annually for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a
reversal is made only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
o) Financial liabilities
All financial liabilities are recognized initially at fair value.
The subsequent measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial
date of recognition, and only if the criteria in Ind AS 109 are satisfied. Changes in fair value of such liability are recognized in the
statement of profit or loss.
Financial liabilities at amortized cost
The Company’s financial liabilities at amortized cost are initially recognized at net of transaction costs and includes trade
payables, borrowings and other payables.
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR)
method except for deferred consideration recognized in a business combination which is subsequently measured at fair value
through profit and loss. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized
as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
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