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 standalone 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
• Share based payments measured at fair value; and
• Lease liabilities measured at fair value.
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 leasehold improvements are depreciated over the
assets’ useful life or over the shorter of the assets’ useful
life and the lease term.
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 ?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 amortization and accumulated
impairment losses if any.
Intangible assets with finite lives are amortized 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 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. Changes in the expected useful life or
the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify
the amortization period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortization expense on intangible assets with finite
lives is 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
Items 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 (?) 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 organization. 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 ?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
realized 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
realize the asset and settle the liability simultaneously.
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