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 except where a newly issued accounting
standard is initially adopted or a revision to an existing
accounting standard requires a change in accounting
policy hitherto in use.

2.1 Basis of preparation

(i) Compliance with Ind AS

These financial statements have been prepared in
accordance with the Indian Accounting standards
(Ind AS) notified under section 133 of the Companies
Act, 2013 ('the Act’) [Companies (Indian Accounting
Standards) Rules, 2015, as amended from time to time]
and presentation requirements of Division II of Schedule
III of the Companies Act, 2013.

All assets and liabilities have been classified as current
or non-current as per the Company’s operating cycle and
other criteria set out in the Schedule III (Division II) to the
Companies Act, 2013. Based on the nature of services
and the time between the rendering of service and their
realisation in cash and cash equivalents, the Company
has ascertained its operating cycle as twelve months for
the purpose of current and noncurrent classification of
assets and liabilities.

The financial statements are presented in Indian Rupees
and all amounts disclosed in the financial statements
and notes have been rounded off upto two decimal
points to the nearest Million (as per the requirement of
Schedule III), unless otherwise stated.

(ii) Historical Cost Convention

The Financial statements have been prepared on a
historical cost basis, except for the following:

• Certain financial assets and liabilities (including
derivative instruments) which are measured at fair
value / amortised cost less diminution, if any;

• Defined benefit plans-plan assets measured at fair
value; and

• Share based payments.

2.2 Property, plant and equipment

Property, plant and equipment are stated at historical
cost less accumulated depreciation and accumulated
impairment losses 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
recognised in profit or loss during the reporting period,
in which they are incurred.

Depreciation methods, estimated useful lives
and residual value

Depreciation is provided on a pro-rata basis on the
straight line method over the estimated useful lives of
assets, based on internal assessment and independent
technical evaluation done by the Management experts
which are stated as under, except in case of Plant and
Machinery, Furniture and Fixtures and Vehicles where
useful life is lower than life prescribed under Schedule II
to the Companies Act, 2013, in order to reflect the actual
usage of the assets.

The asset’s useful lives and methods of depreciation
are reviewed at the end of each reporting period and
adjusted prospectively, if appropriate.

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 net disposal proceeds with carrying amount
of the asset. These are included in profit or loss within
other income.

Assets costing less than or equal to I 5,000 are fully
depreciated pro-rata from date of acquisition.

2.3 Intangible assets

Intangible assets acquired separately are measured on
initial recognition at historical cost. Intangibles assets
have a finite life and are subsequently carried at cost
less any accumulated amortisation and accumulated
impairment losses if any.

I ntangible assets with finite lives are amortised on
straight line method over the useful life and assessed
for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at the
end of each reporting period. 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 amortisation period or
method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure
forms part of carrying value of another asset.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of
the asset and are recognised in the statement of profit
or loss when the asset is derecognised.

2.4 Impairment of non-financial assets

Assessment is done at each balance sheet date as to
whether there is any indication that an asset may be
impaired. If any such indication exists or when annual
impairment testing for an asset is required, an estimate
of the recoverable amount of the asset/cash generating
unit is made. Recoverable amount is higher of an asset’s
or cash generating unit’s fair value less costs of disposal
and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from
the continuing use of an asset and from its disposal at
the end of its useful life. For the purpose of assessing
impairment, 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 group of assets. The smallest
identifiable group of assets that generates cash inflows
from continuing use that are largely independent of the
cash inflows from other assets or groups of assets, is
considered as a cash generating unit (CGU). An asset
or CGU whose carrying value exceeds its recoverable
amount is considered impaired and is written down to its
recoverable amount. Assessment is also done at each
balance sheet for possible reversal of an impairment
loss recognised for an asset, in prior accounting periods.

2.5 Foreign currency translations

(i) Functional and presentation currency

I tems included in the financial statements of the
Company are measured using the currency of the
primary economic environment in which the Company
operates ('the functional currency’) i.e., Indian Rupee
(INR) which is its presentation currency as well.

(ii) Transactions and balances
Initial recognition

On initial recognition, all foreign currency transactions
are recorded by applying to the foreign currency amount
the spot exchange rate between the functional currency
and the foreign currency at the date of the transaction.

The company follows Appendix B to Ind AS 21 - Foreign
Currency Transactions and Advance Considerations
which clarifies the date of transaction for the purpose
of determining the exchange rate to use on initial
recognition of the related asset, expense or income when
an entity has received or paid advance consideration in a
foreign currency.

Subsequent recognition

As at the reporting date, foreign currency monetary
items are translated using the closing rate and non¬
monetary items that are measured in terms of historical
cost in a foreign currency are translated using the
exchange rate at the date of the initial transaction.

Exchange gains and losses arising on the settlement
of monetary items or on translating monetary items at
rates different from those at which they were translated
on initial recognition during the period or in previous
financial statements are recognised in profit or loss in
the year in which they arise.

Translation of foreign operations

The financial statements of foreign operations are
translated using the principles and procedures
mentioned above, since these businesses are carried
on as if it is an extension of the Company’s operations.

2.6 Revenue recognition

The Company follows Ind AS 115 "Revenue from
Contracts with Customers” using the modified
retrospective approach. Revenue is recognised upon
transfer of control of promised services to customers in
an amount that reflects the consideration we expect to
receive in exchange for those services (net of goods and
services tax).

The Company earns revenue significantly from the
following sources viz.

a) Recruitment solutions through its career web sites
such as, Naukri.com & iimjobs.com:-

Revenue is received primarily in the form of fees,
which is recognised prorata over the subscription
/ advertising / service agreement, usually ranging
between one to twelve months.

b) Matrimonial web site, Jeevansathi.com, Real Estate
website, 99acres.com and Education classified
website, Shiksha.com:-

Revenue, received in the form of subscription fees
is recognised over the period of subscription /
advertising / service agreement, usually ranging
between one to twelve months or usage/delivery,
as the case may be. The revenue is recognised on
principal to principal basis and recognised gross of
agency/commission fees, as applicable in case of
Jeevansathi.com.

c) Placement search division, Quadrangle:-

Revenue is received in the form of fees, for
placements at various levels in a client’s
organisation. Revenue is recognised on the

successful completion of the search and
selection activity.

d) Resume Fast Forward Service:-

The revenue from Resume Sale Services is earned
in the form of fees and is recognised on completion
of the related service.

Revenue in relation to rendering of the services
mentioned in (a) & (b) above where performance
obligations are satisfied over time and where there is
no uncertainty as to measurability or collectability of
consideration, is recognised ratably over the period of
in which services are rendered (subscription period)
and rendering of the services mentioned in (c) to (d)
above are recognised in the accounting period in which
the services are rendered. When there is uncertainty
as to measurement or ultimate collectability, revenue
recognition is postponed until such uncertainty
is resolved.

In respect of (a) and (b) above, the unaccrued amounts
are reflected in the Balance sheet as Income received in
advance (deferred sales revenue).

The company has as a matter of practical expedient
recognised the incremental costs of obtaining a contract
as an expense when incurred, since the amortisation
period of the asset that the entity otherwise would have
recognised is generally one year or less.

2.7 Retirement and other employee benefits

(i) Short-term obligations

Liabilities for salaries, including other monetary and
non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in
which the employees render the related service are
recognised in respect of employees’ services up to the
end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are
settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.

(ii) Other Long-term employee benefit obligations

The liabilities for earned leave are not expected to
be settled wholly within 12 months after the end of
the period in which the employees render the related
service. They are therefore measured as the present
value of expected future payments to be made in
respect of services provided by employees upto the end
of the reporting period using the projected unit credit
method. The benefits are discounted using the market
yields at the end of the reporting period that have terms
approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments

and changes in actuarial assumptions are recognised in
profit or loss.

The obligations are presented as current liabilities
in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least
twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.

(iii) Post-employment obligations

The Company operates the following post¬
employment schemes:

a) defined contribution plans - provident fund

b) defined benefit plans - gratuity plans

a) Defined contribution plans

The Company has a defined contribution
plan for the post-employment benefit namely
Provident Fund which is administered through the
Regional Provident Fund Commissioner and the
contributions towards such fund are recognised
as employee benefits expense and charged to
the Statement of Profit and Loss when they are
due. The Company does not carry any further
obligations with respect to this, apart from
contributions made on a monthly basis.

b) Defined benefit plans

The Company has defined benefit plan, namely
gratuity for eligible employees in accordance with
the Payment of Gratuity Act, 1972 the liability for
which is determined on the basis of an actuarial
valuation (using the Projected Unit Credit method)
at the end of each period. The Gratuity Fund is
recognised by the income tax authorities and is
administered through Life Insurance Corporation
of India under its Group Gratuity Scheme.

The present value of the defined benefit obligation
denominated in INR is determined by discounting
the estimated future cash outflows by reference to
market yields at the end of the reporting period on
government bonds that have terms approximating
to the tenor of the related obligation. The liability or
asset recognised in the balance sheet in respect of
gratuity is the present value of the defined benefit
obligation at the end of the reporting period less
the fair value of plan assets. The net interest cost
is calculated by applying the discount rate to the
net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included
in employee benefit expense in the statement of
profit and loss.

Remeasurements of the net defined liability,
comprising of actuarial gains and losses, return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability) and
any change in the effect of asset ceiling (excluding
amounts included in net interest on the net defined
benefit liability), are recognised immediately in the
balance sheet with a corresponding debit or credit
to retained earnings through Other Comprehensive
Income (OCI) in the period in which they occur.
Remeasurements are not reclassified to profit or
loss in subsequent periods.

Change in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in the
profit or loss as past service cost.

(iv) Bonus Plans

The Company recognises a liability and an expense for
bonuses. The Company recognises a provision where
contractually obliged or where there is a past practice
that has created a constructive obligation.

(v) Termination benefits

Termination benefits are payable when employment
is terminated by the Company before the normal
retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits.
The Company recognises termination benefits at the
earlier of the following dates: (a) when the Company
can no longer withdraw the offer of those benefits; and
(b) when the entity recognises costs for a restructuring
that is within the scope of Ind AS 37 and involves the
payment of terminations benefits. In the case of an
offer made to encourage voluntary redundancy, the
termination benefits are measured based on the number
of employees expected to accept the offer. Benefits
falling due more than 12 months after the end of the
reporting period are discounted to present value.

(vi) Share based payments

Share-based compensation benefits are provided to
employees via the Info Edge Limited Employee Option
Plan and share-appreciation rights. These are equity
settled schemes.

Employee options

The fair value of options granted under the Info Edge
Employees' Stock Option Scheme is recognised as
an employee benefits expense with a corresponding
increase in equity. The total amount to be expensed is

determined by reference to the grant date fair value of
the options granted:

• including any market performance conditions (e.g.,
the entity's share price)

• excluding the impact of any service and non-market
performance vesting conditions (e.g. profitability,
sales growth targets and remaining an employee of
the entity over a specified time period), and

• including the impact of any non-vesting conditions
(e.g. the requirement for employees to save or hold
shares for a specific period of time).

The total expense is recognised over the vesting period,
which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period,
the entity revises its estimates of the number of options
that are expected to vest based on the non-market
vesting and service conditions. It recognises the impact
of the revision to original estimates, if any, in profit or
loss, with a corresponding adjustment to equity.

Share appreciation rights

Share appreciation rights granted are considered to be
towards equity settled share based transactions and as
per IND AS 102, cost of such options are measured at fair
value as at the grant date. Company's share appreciation
rights are recognised as employee benefit expense over
the relevant service period.

2.8 Income tax

The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused
tax losses.

The current income tax is calculated on the basis of
the tax rates and the tax laws enacted or substantively
enacted at the reporting date. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulations is subject
to interpretation. It establishes provisions or make
reversals of provisions made in earlier years, where
appropriate, on the basis of amounts expected to be
paid to / received from the tax authorities.

Deferred tax is recognised for all the temporary
differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements, subject to the consideration of prudence
in respect of deferred tax assets. Deferred tax assets
are recognised and carried forward only if it is probable
that sufficient future taxable amounts will be available

against which such deferred tax asset can be realised.
Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
substantively 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. The carrying amount of deferred
tax assets are reviewed at each Balance Sheet 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 utilised.
Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent
that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.

Deferred tax liabilities are not recognised for temporary
differences between the carrying amount and tax
bases of investments in subsidiaries, controlled trust,
associates and interest in joint arrangements where
the company is able to control the timing of the reversal
of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.

Deferred tax assets are not recognised for temporary
differences between the carrying amount and tax
bases of investments in subsidiaries, controlled trust,
associates and interest in joint arrangements where it
is not probable that the differences will reverse in the
foreseeable future and taxable profit will not be available
against which the temporary difference can be utilised.

Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.

Deferred tax assets and liabilities are offset if a legally
enforceable right exists to set off current tax assets and
liabilities and the deferred tax balances relate to the
same taxable authority. Current tax assets and liabilities
are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.