2.3 Material accounting policiesI. 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:
a. Expected to be realized or intended to be sold or consumed in normal operating cycle
b. Held primarily for the purpose of trading
c. Expected to be realized within twelve months after the reporting period, or
d. 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:
a. It is expected to be settled in normal operating cycle
b. It is held primarily for the purpose of trading
c. It is due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities (net) are classified as non-current.
II. Property, plant and equipment:
Property, plant and equipment are stated at original cost net of recoverable taxes / duty credit availed,
less accumulated depreciation and accumulated impairment losses, if any. Costs include financing
costs of borrowed funds attributable to acquisition or construction of fixed assets, up to the date the
assets are put-to-use. The present value of the expected cost for the decommissioning of an asset
after its use is included in the cost of the respective asset if the recognition criteria for a provision are
met. When significant parts of property, plant and equipment are required to be replaced at intervals,
the Company derecognizes the replaced part, and recognizes the new part with its own associated
useful life and it is depreciated accordingly. Where components of an asset are significant in value
in relation to the total value of the asset as a whole, and they have substantially different economic
lives as compared to principal item of the asset, they are recognized separately as independent items
and are depreciated over their estimated economic useful lives. All other repair and maintenance
costs are recognized in the statement of profit and loss as incurred unless they meet the recognition
criteria for capitalization under Property, Plant and Equipment.
Tangible Fixed Assets:
Depreciation is charged as per straight line method on the basis of the expected useful life as specified
in Schedule II to the Companies Act, 2013. A residual value of 5% (as prescribed in Schedule II to the
Act) of the cost of the assets is used for the purpose of calculating the depreciation charge. The
management believes that these estimated useful lives are realistic and reflect fair approximation of
the period over which the assets are likely to be used. However, management reviews the residual
values, useful lives and methods of depreciation of property, plant and equipment at each reporting
period end and any revision to these is recognized prospectively in current and future periods, if any.
Intangible Assets:
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.
An item of intangible asset initially recognized is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of
the asset [calculated as the difference between the net disposal proceeds and the carrying amount of
the asset] is included in the income statement when the asset is derecognized. Intangible fixed assets
are amortized on straight line basis over their estimated useful economic life.
The Company assesses whether the useful life of an intangible asset is finite or indefinite. Intangible
assets with finite lives are amortized over their useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period
and the amortization method for an intangible asset with a finite useful life are reviewed at least at
the end of each reporting period and any change is accounted for prospectively. Intangible assets with
indefinite useful lives are not amortized, but are tested for impairment annually, either individually or
at the cash-generating-unit level, and the indefinite-life assessment is reviewed annually to determine
whether the indefinite life continues to be supportable.
Capital Work- in- progress:
Capital work- in- progress represents directly attributable costs of construction/ acquisition to be
capitalized. All other expenses including interest incurred during construction / acquisition period
are capitalized as a part of the construction cost to the extent to which these expenditures are
attributable to the construction as per Ind AS-23 "Borrowing Costs". Interest income earned on
temporary investment of borrowing funds for the project during construction period are set off from
the interest expense accounted for as expenditure during the construction period. All these expenses
are capitalised on commencement of respective projects.
III. Impairment of non-financial assets
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication
of impairment based on internal/external factors. An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater
of the asset's net selling price and value in use. In assessing value in use, the Company measures
it on the basis of discounted cash flows of next five years' projections estimated based on current
prices. Assessment is also done at each Balance Sheet date as to whether there is any indication that
an impairment loss recognized for an asset in prior accounting periods may no longer exist or may
have decreased. After impairment, depreciation is provided on the revised carrying amount of the
asset over its remaining useful life.
Impairment losses of continuing operations, including impairment on inventories, are recognized in
the statement of profit and loss, except for properties previously revalued with the revaluation taken
to other comprehensive Income (the 'OCI'). For such properties, the impairment is recognized in OCI
up to the amount of any previous revaluation.
Initial Recognition:
The Company's financial statements are presented in which is also the Company's functional
currency.
IV. Foreign Currency Transactions
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign
currency amount, the exchange rate between the reporting currency and the foreign currency at the
date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate. Forward exchange contracts
and other derivative financial instruments are measured at fair value at each reporting date in
accordance with Ind AS 109, with changes in fair value recognized in the statement of profit and loss,
unless the derivative is designated in an effective hedging relationship, in which case the recognition
of the resulting gain or loss depends on the nature of the hedge relationship. The Company has not
designated any derivative as a hedging instrument. Non-monetary items, which are measured in
terms of historical costs denominated in foreign currency, are reported using the exchange rate at
the date of the transaction. Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the exchange rate at the date when
such value was determined.
Exchange Differences:
Exchange differences arising on the settlement of monetary items or on reporting Company's
monetary items at rates different from those at which they were initially recorded during the year,
or reported in previous financial statements including receivables and payables which are likely to
be settled in foreseeable future, are recognized as income or as expenses in the year in which they
arise. All other exchange differences are recognized as income or as expenses in the period in which
they arise.
The gain or loss arising on translation of non-monetary items is recognized in line with the gain or
loss of the item that give rise to the translation difference (i.e. translation difference on items whose
gain or loss is recognized in other comprehensive income or the statement of profit and loss is also
recognized in other comprehensive income or the statement of profit and loss respectively).
V. Revenue Recognition
Revenue is recognized either at a point in time or over time, when (or as) the company satisfies
performance obligations by transferring the promised goods or services to its customers. Revenue
towards satisfaction of a performance obligation is measured at amount of transaction price allocated
to that performance obligation. The Company considers terms of the contracts in determining
the transaction price. The transaction price of goods sold or services rendered is net of variable
consideration on account of various discounts, incentive, rebates and schemes etc. Transaction price
excludes taxes and duties collected on behalf of the government.
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.
A contract liability is recognised when the Company receives consideration, or when consideration
becomes due (whichever occurs first), from a customer prior to transferring the related goods or
services. This represents the Company's obligation to deliver goods or services under the terms of the
contract. Contract liabilities are subsequently recognised as revenue when the Company satisfies its
performance obligations by transferring control of the promised goods or services to the customer.
Conversely, if the Company satisfies a performance obligation before receiving the corresponding
consideration, a contract asset (unbilled revenue) is recognised. This occurs when the Company has
a right to consideration that is conditional on something other than the passage of time.
Unearned revenue related to unsatisfied or partially satisfied performance obligations is presented
as contract liabilities in the Balance Sheet, while contract assets are recognised for performance
obligations fulfilled but not yet billed.
(i) Sale of Goods:
Revenue from sale of newspaper and publications are recognised (net of credits for unsold copies),
as and when the newspapers and magazines are delivered which coincides with transfer of control
of the goods to the customer.
Revenue from subscription of E-Paper is recognised over the period of the subscription, in accordance
with the established principles of accrual accounting.
Deferred revenues are reported on the balance sheet under Contract Liabilities. Revenue from the
sale of waste papers/scrap is recognised when the control is transferred to the buyer, usually on
delivery of the waste papers/scrap.
(ii) Rendering of Services:
Revenue from sale of advertisement space is recognised (net of estimated volume discounts), as and
when the relevant advertisement is published/aired on Radio/displayed on website in accordance
with the terms of the contract with the customer. Revenue for all barter transactions is recognised
at the time of actual performance of the contract to the extent of performance completed by either
party against its part of contract and is with reference to non-barter transactions.
A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is
due,
(iii) Interest Income:
Interest income from financial assets at fair value through profit or loss is disclosed as interest income
within other income. Interest income on financial assets at amortised cost and financial assets at
FVOCI is calculated using the effective interest method is recognised in the statement of profit and
loss as part of other income.
(iv) Dividend income:
Dividends are received from financial assets at FVTPL and at FVOCI. Dividends are recognised as
other income in profit or loss only when the right to receive payment is established.
(v) Other income
Lease income from operating leases where the Company is a lessor is recognised 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.
VI. Financial Instruments
Other income is recognised when no significant uncertainty as to its determination or realisation
exists,
A. Financial Assetsa. Initial recognition and measurement:
All financial assets are recognized initially at fair value. In the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the
financial asset are added to the initial cost of such asset. Purchases 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 trades] are recognized on the settlement date, trade date, i.e., the date that the
Company settle commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in four categories:
1. Debt instruments at amortized cost:
Profit and Loss. The losses arising from impairment are recognized in the profit or loss. This category
generally applies to trade and other receivables.
2. Debt instruments at fair value through other comprehensive income [FVTOCI]:
A 'debt instrument' is classified as at the FVTOCI if both of the following criteria are met:
- The asset is held with objective of both - for collecting contractual cash flows and selling the financial
assets,
- The asset's contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive income
[OCI]. However, the Company recognizes interest income, impairment losses & reversals and foreign
exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative
gain or loss previously recognized in OCI is reclassified from the equity to Statement of Profit and
Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the
EIR method,
3. Debt instruments, derivatives and equity instruments at fair value through profit or loss
[FVTPL]:
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the
criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments
included within the FVTPL category are measured at fair value with all changes recognized in the
Profit & Loss statement.
4. Equity instruments measured at fair value through other comprehensive income [FVTOCI]:
All equity in scope of Ind AS 109 are measured at fair value. Equity instruments which are held
for trading are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present in other comprehensive income subsequent changes in the fair value.
The Company has made such election on an instrument by- by instrument basis. The classification is
made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the
OCI. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is transferred
within equity. Equity instruments included within the FVTPL category are measured at fair value with
all changes recognized in the Statement of Profit and Loss.
5. Equity instruments measured at Cost [At Cost]:
The Company has elected to account for its investments in subsidiaries and associates at cost less
impairment loss (if any).
Derecognition:
A financial asset is primarily derecognized when:
1, The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
'pass-through' arrangement; and either [a] the Company has transferred substantially all the risks
and rewards of the asset, or [b] the Company has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the asset.
2, The Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards
of ownership.
c. Impairment of financial assets:
In accordance with Ind AS 109, the Company applies expected credit loss [ECL] model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
a. Financial assets that are debt instruments, and are measured at amortised cost e.g., loans,
deposits, trade receivables and bank balance
b. Trade receivables or any contractual right to receive cash
c. Financial assets that are debt instruments and are measured as at FVTOCI
d. Lease receivables under Ind AS 116
e. Financial guarantee contracts which are not measured as at FVTPL
The Company follows 'simplified approach' for recognition of impairment loss allowance on Point
c and d provided above. The application of simplified approach requires the company to recognize
the impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition. For recognition of impairment loss on other financial assets and risk exposure, the
Company determines that whether there has been a significant increase in the credit risk since
initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used to provide
impairment. If, in a subsequent period, credit quality of the instrument improves such that there
is no longer a significant increase in credit risk since initial recognition, then the entity reverts to
recognizing impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected
life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from
default events that are possible within 12 months after the reporting date. ECL is the difference
between all contractual cash flows that are due to the Company in accordance with the contract and
all the cash flows that the entity expects to receive [i.e., all cash shortfalls], discounted at the original
eir.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance
on portfolio of its trade receivables. The provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.
At every reporting date, the historical observed default rates are updated and changes in the forward¬
looking estimates are analyzed.
ECL impairment loss allowance [or reversal] recognized during the period is recognized as income/
expense in the statement of profit and loss. The balance sheet presentation for various financial
instruments is described below:
a. Financial assets measured as at amortized cost, contractual revenue receivables and lease
receivables: ECL is presented as an allowance which reduces the net carrying amount. Until the
asset meets write-off criteria, the Company does not reduce impairment allowance from the
gross carrying amount.
b. Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value,
impairment allowance is not further reduced from its value. Rather, ECL amount is presented as
'accumulated impairment amount' in the OCI.
B. Financial liabilities:Initial recognition and measurement:
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable transaction costs.
The measurement of financial liabilities depends on their classification, as described below:
i. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
This category also includes derivative financial instruments entered into by the Company that are
not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated
embedded derivatives are also classified as held for trading unless they are designated as effective
hedging instruments. Gains or losses on liabilities held for trading are recognized in the 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 for liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized
in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may
transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are
recognized in the statement of profit or loss. The Company has not designated any financial liability
as at fair value through profit and loss.
ii. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and losses are recognized in profit or 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.
iii. Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment
to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a
payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts
are recognized initially as a liability at fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the
amount recognized less cumulative amortization.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognized in the statement of
profit or loss.
C. Reclassification of financial assets:
The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments and
financial liabilities. For financial assets which are debt instruments, a reclassification 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. If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date which is the first Day of the immediately
next reporting period following the change in business model. The Company does not restate any
previously recognized gains, losses [including impairment gains or losses] or interest.
D. Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an
intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
VII. Fair Value Measurement
The Company measures financial instruments, such as, derivatives at fair value at each 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:
a. In the principal market for the asset or liability, or
b. 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 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, 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 the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
VIII. Inventories
1. Raw Materials & Stores and spares are valued at cost on Weightage Average basis. Newsprint &
Printing Materials are valued at cost on Weightage Average basis.
2. Stores and spares issued to consuming departments during the year are treated as consumed.
3. Newsprint in the process of utilization and/or remaining with department at the year-end is
included in the inventory at the close of accounting year
4. Finished Goods are valued at Cost or Net Realizable Value whichever is lower.
IX. Employee benefits
1. Short Term employee benefits are recognized as expense at undiscounted amount in the
statement of profit and loss for the year in which the related service is rendered.
2. Post-employment and other long-term benefits are recognised as an expense in the statement
of profit and loss account for the year in which the employee has rendered services. The expense
is recognised at the present value of the amounts payable determined using actuarial valuation
techniques at the end of Financial Year. Remeasurements (actuarial gains and losses) in respect
of post-employment defined benefit plans are recognised in other comprehensive income
in the period in which they occur and are not reclassified to the statement of profit and loss
in subsequent periods; In contrast, remeasurements in respect of other long-term employee
benefits are recognised in the statement of profit and loss in the period in which they arise.
Payments to defined contribution retirement benefit scheme, if any, are charged as expense as
they fall due.
X. Taxes on Income
1. Tax expense comprises current 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 and tax
laws prevailing in the respective tax jurisdictions where the Company operates. Current tax items
are recognized in correlation to the underlying transaction either in P&L, OCI or directly in equity.
2. 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.
3. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets
are recognized for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognized on the basis of reasonable certainty
that the company will be having sufficient future taxable profits and based on the same the DTA
has been recognized in the books.
4. 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 utilized. Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be recovered.
5. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is "realized or the liability is settled, based on tax rates [and tax laws] that
have been enacted or substantively enacted at the" reporting date.
6. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or
directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current tax liabilities.
XI. Borrowing costs
1. 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
capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in
the period they occur.
2. Borrowing cost consists of interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings
to the extent they are regarded as an adjustment to the interest cost.
3. Borrowing costs which are not specifically attributable to the acquisition, construction or
production of a qualifying asset, the amount of borrowing costs eligible for capitalization is
determined by applying a weighted average capitalization rate. The weighted average rate is
taken of the borrowing costs applicable to the outstanding borrowings of the company during
the period, other than borrowings made specifically for the purpose of obtaining a qualifying
asset. The amount of borrowing costs capitalized cannot exceed the amount of borrowing costs
incurred during that period. Other interest and borrowing costs are charged to revenue.
XII. Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss from continuing operation
and total profit, both attributable to equity shareholders of the Company by the weighted average
number of equity shares outstanding during the period.
Diluted EPS is calculated by dividing the profit attributable to Equity Shareholders by weighted
average number of equity shares outstanding during the year, plus the weighted average number of
equity shares that would be issued in conversion of all the potential equity shares into equity shares.
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