3 Material accounting policies
3.1 Revenue Recognition
Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the Company and
the revenue can be reliably measured. Revenue towards
satisfaction of a performance obligation Is measured at the
amount of transaction price (net of variable consideration)
allocated to that performance obligation. The transaction
price of goods sold and services rendered is net of variable
consideration on account of discounts as part of the
contract in normal course of Company's activities.
Advertisement revenue
Advertisement revenue is recognised as and when
advertisement is published / displayed / aired and is
disclosed net of trade discounts and goods and service tax.
Circulation revenue
Sale of newspaper and magazine is recognised when the
significant risk and rewards of ownership have passed
on to the buyers and is disclosed net of sales return
and discounts.
Revenue from scrap sale
Sale of waste paper and scrap is recognised when the
significant risk and rewards of ownership have passed on
to the buyers.
Other revenue
Gain or Loss on derecognition of financial asset is
determined as the difference between the sale price (net
of selling costs) and carrying value of financial asset.
Interest income is recognised using effective interest
method. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through expected
life of the financial asset to the gross carrying amount of
the financial asset. When calculating the effective interest
rate, the Company estimates the expected cash flows
by considering all the contractual terms of the financial
instrument but does not consider the expected credit losses.
Dividend income is recognised when the right to receive
the dividend is established.
All other income are recognised and accounted for on
accrual basis.
3.2 Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of
accumulated depreciation and accumulated impairment
losses, if any.
The cost comprises the purchase price, borrowing cost
if capitalization criteria are met 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.
Subsequent expenditures relating to property, plant
and equipment is 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.
All other expenses on existing fixed assets, including
day-to-day repair and maintenance expenditure and
cost of replacing parts, are charged to the statement of
profit and loss for the period during which such expenses
are incurred.
Property, Plant and Equipment not ready for the intended
use on the date of the Balance Sheet are disclosed as
"Capital work-in-progress".
Gains or losses arising from derecognition of fixed assets
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset at the time
of disposal and are recognized in the statement of profit
and loss when the asset is derecognized.
Depreciation on Property, Plant and Equipment, other
than plant and machinery, is provided on written down
value method and depreciation on plant and machinery
is provided on Straight line method (SLM) basis as per the
useful life prescribed under Schedule II to the Companies
Act, 2013.
In respect of Property, Plant and Equipment purchased
during the year, depreciation is provided on a pro-rata
basis from the date on which such asset is ready to use.
The residual value, useful life and method of depreciation
of Property, Plant and Equipment are reviewed at
each financial year end and adjusted prospectively,
if appropriate.
3.3 Intangible assets
An intangible asset is recognised, only where it is
probable that future economic benefits attributable to
the asset will accrue to the enterprise and the cost can be
measured reliably.
a Advertisement right
Intangible assets are stated at cost, less accumulated
amortization and impairment losses, if any.
Advertisement rights granted by Vadodara Municipal
Corporation (VMC) are against construction service
rendered by the Company on BOT basis.
Advertisement right cost comprises of direct and indirect
expenses on construction of bus shelters in terms of
Concession Agreement.
Subsequent expenditure related to an item of intangible
assets is added to its book value only if it increases
the future benefits from the existing asset beyond its
previously assessed standard of performance.
Investment properties are depreciated using written
down value method to allocate cost of assets over their
estimated useful lives as per Schedule II to the Companies
Act .
All other expenses on existing intangible assets are
charged to the statement of profit and loss for the period
during which such expenses are incurred.
Intangible assets are amortized on straight line basis over
concession period.
b Other intangible assets
Intangible assets are stated at cost, less accumulated
amortization and impairment losses, if any.
Intangible assets not ready for the intended use on the
date of the Balance Sheet are disclosed as intangible
assets under development.
Separately purchased intangible assets are initially
measured at cost. Subsequently, intangible assets are
carried at cost less any accumulated amortization and
accumulated impairment losses, if any.
The useful lives of intangible assets are assessed as either
finite or infinite. Finite-life intangible assets are amortized
on a straight-line basis over the period of their expected
useful lives. Intangible assets are amortized over a period
of six years on straight line basis as per the useful life
prescribed under Schedule II to the Companies Act, 2013.
Intangible assets acquired / purchased during the year are
amortized on a pro-rata basis from the date on which such
assets are ready to use.
Intangible assets with an infinite useful life are
not amortized. Such intangible assets are tested
for impairment.
The residual value, useful life and method of amortization
of intangible assets are reviewed at each financial year end
and adjusted prospectively, if appropriate.
3.4 Investment Property
Investment Property is measured initially at cost including
related transaction costs.
The cost comprises the purchase price, borrowing cost
if capitalization criteria are met and directly attributable
cost of bringing the asset to its working condition for its
intended use.
Subsequent expenditures 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.
Investment properties are depreciated using written
down value method to allocate cost of assets over their
estimated useful lives. Investment properties generally
have useful life of 60 years.
All day-to-day repair and maintenance expenditure are
charged to the statement of profit and loss for the period
during which such expenses are incurred.
Gains or losses arising from derecognition of investment
property are measured as the difference between the net
disposal proceeds and the carrying amount of the asset at
the time of disposal and are recognized in the statement
of profit and loss when the asset is derecognized.
3.5 Inventories
Inventories are valued at lower of cost and net realizable
value. Cost of materials is determined on weighted
average basis. Net realizable value is the estimated selling
price less estimated cost necessary to make the sale.
3.6 Financial Instruments
3.6.1 Initial recognition
The Company recognizes financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument.
All financial assets and liabilities are recognized at fair
value on initial recognition except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities that are not at fair value through profit or loss
are added to or deducted from the fair value of financial
assets or financial liabilities on initial recognition.
Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
Trade receivable that do not contain significant financing
component are measured at transaction price.
Regular purchase and sale of financial assets are accounted
for at trade date.
3.6.2 Subsequent measurement
a Non-derivative financial instruments
i Financial assets carried at amortized cost
A financial asset is subsequently measured at
amortized cost if it is held within a business model
whose objective is to hold the asset in order to collect
contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
ii Financial assets at fair value through other
comprehensive income
A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
The Company has made an irrevocable election
for its investments which are classified as equity
instruments to present the subsequent changes in
fair value in other comprehensive income based on
its business model. For such equity instruments, the
subsequent changes in fair value are recognized in
other comprehensive income.
iii Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the
above categories are subsequently measured at
fair value through profit or loss. Fair value changes
are recognised as other income in the Statement of
Profit or Loss.
iv Financial liabilities
Financial liabilities are subsequently carried at
amortized cost using the effective interest method.
v Investment in subsidiary
Investment in subsidiary is carried at cost in the
separate financial statements.
b Equity instruments
An equity instrument is a contract that evidences residual
interest in the assets of the Company after deducting all
of its liabilities. Incremental costs directly attributable to
the issuance of equity instruments are recognised as a
deduction from equity instrument net of any tax effects.
3.6.3 Derecognition
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer
qualifies for derecognition under Ind AS 109.A financial
liability is derecognized when obligation specified in the
contract is discharged or cancelled or expires.
3.6.4 Off-setting
Financial assets and liabilities are offset and the net
amount is presented in the balance sheet when the
Company currently has a legally enforceable right to
offset the recognised amount and intends either to
settle on a net basis or to realize the asset and settle the
liability simultaneously.
3.7 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.
The 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
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefit 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. The fair value hierarchy
is based on inputs to valuation techniques that are
used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1 - inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities
Level 2 - inputs are other than quoted prices included
within level 1 that are observable for the asset or liability
either directly (i.e. as prices) or indirectly (i.e. derived
prices)
Level 3 - inputs are not based on observable market data
(unobservable inputs).Fair values are determined in whole
or in part using a valuation model based on assumption
that are neither supported by prices from observable
current market transactions in the same instrument nor
are they based on available market data.
3.8 Income tax
Income tax expense comprises current tax and
deferred tax.
3.8.1 Current Tax
Current tax is recognised in profit or loss, except when it
relates to items that are recognised in other comprehensive
income or directly in equity, in which case, the current
tax is also recognised in other comprehensive income or
directly in equity, respectively.
Current 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.
Current tax assets and current tax liabilities are offset,
where Company has a legally enforceable right to set off
the recognised amounts and where it intends either to
settle on a net basis, or to realize the asset and settle the
liability simultaneously.
3.8.2 Deferred Tax
Deferred tax is recognised in profit or loss, except
when it relates to items that are recognised in other
comprehensive income or directly in equity, in which case,
the deferred tax is also recognised in other comprehensive
income or directly in equity, respectively.
Deferred tax liabilities are recognised for all taxable
temporary differences, except to the extent that the
deferred tax liability arises from initial recognition of
goodwill; or initial recognition of an asset or liability in
a transaction which is not a business combination and at
the time of transaction, affects neither accounting profit
nor taxable profit or loss.
Deferred tax assets are recognised for all deductible
temporary differences, carry forward of unused tax losses
and carry forward of unused tax credits to the extent
that it is probable that taxable profit will be available
against which those temporary differences, losses and
tax credit can be utilized, except when deferred tax
asset on deductible temporary differences arise from the
initial recognition of an asset or liability in a transaction
that is not a business combination and at the time of the
transaction, affects neither accounting profit nor taxable
profit or loss.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on the tax
rules and tax laws that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset,
where Company 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 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.
3.9 Impairment
3.9.1 Financial assets other than investment in subsidiary
The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant
financing component is measured at an amount equal to
lifetime ECL.
For all other financial assets, expected credit losses are
measured at an amount equal to the 12-month ECL, unless
there has been a significant increase in credit risk from
initial recognition in which case those are measured at
lifetime ECL.
The impairment loss allowance (or reversal) recognised
during the period is recognised as income / expense in
the statement of profit and loss.
3.9.2 Financial assets - investment in subsidiary
The Company assesses at each reporting date whether
there is an indication that an asset may be impaired. Such
indication include, though are not limited to, significant
or sustained decline in revenues or earnings and material
adverse changes in the economic environment.
If any indication exists, the Company estimates the asset's
recoverable amount based on value in use.
To calculate value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market rates and the
risk specific to the asset
Where the carrying amount of an asset exceeds its value
in use amount, the asset is considered impaired and is
written down to its recoverable amount. The impairment
loss is recognised in statement of profit and loss.
3.9.3 Non-financial assets
Tangible and intangible assets
The Company assesses at each reporting date whether
there is an indication that an asset may be impaired. If
any indication exists the Company estimates the asset's
recoverable amount.
An asset's recoverable amount is the higher of an assets net
selling price and its value in use. The recoverable amount
is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of
those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and
is written down to its recoverable amount. The impairment
loss is recognised in the statement of profit and loss.
In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
In determining net selling price, recent market transactions
are taken into account, if available. If no such transactions
can be identified, an appropriate valuation model is used.
3.9.4 Lease
Company as lessee
The Company's lease asset classes primarily consist of
leases for Office building. The Company assesses whether
a contract contains a lease, at inception of a contract. 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. 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 (ROU) asset and a corresponding
lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of 12 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.
The ROU assets are initially recognized at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.
ROU assets are depreciated from the commencement date
on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset.
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 liability and ROU assets have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.
Advance lease payment made for the entire life of the
lease is amortized over a lease period.
Company as lessor
Operating lease
Lease income from operating leases where the Company
is a lessor is recognised in income on a straight-line basis
over the term of the relevant lease. In case of modification
of contractual terms, the same is accounted as a new
lease, considering any prepaid or accrued lease payments
relating to the original lease as part of the lease payments
for the new lease.
3.10 Employee Benefits
Short term employee benefits for salary and wages
include leave that are expected to be settled wholly within
12 months after the end of the reporting period in which
employees render the related service are recognized as an
expense in the statement of profit and loss.
Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company recognizes
contribution payable to the provident fund scheme
as an expenditure, when an employee renders the
related service.
The Company operates one defined benefit plan for its
employees, viz., gratuity plan. The costs of providing
benefits under the plan are determined on the basis of
actuarial valuation at each year-end. Actuarial valuation is
carried out using the projected unit credit method made
at the end of each reporting date. Re-measurement of the
net defined benefit liability (asset) comprise of actuarial
gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability (asset) and the return on plan assets
(excluding amounts included in net interest on the net
defined benefit liability / (asset)).Re-measurement are
recognised in other comprehensive income and will not
be reclassified to profit or loss in a subsequent period.
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