2. MATERIAL ACCOUNTING POLICIES
2.1. Basis of preparation
The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and
presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III).
The standalone financial statements have been prepared on an accrual basis under the historical cost convention except
for certain financial assets and financial liabilities are measured at fair value (refer accounting policy regarding financial
instruments).
The standalone financial statements are presented in ', its functional currency, and all values are rounded to the nearest
lakhs, except where otherwise indicated.
The standalone financial statements provide comparative information in respect of the previous period.
The significant accounting judgements, estimates and assumptions used in the preparation of standalone financial statements
is provided in the note to the standalone financial statements.
2.2. Summary of material accounting policies
a) 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:
• Expected to be realised or intended to be sold or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period, or
• 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:
• It is expected to be settled in normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period, or
• 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 are classified as non-current assets and liabilities.
Based on the time evolved between acquisition of assets for processing and the realisation in cash and cash equivalents,
the Company has determined its operating cycle as twelve months for the above purpose of classification as current and
non-current.
b) Property, plant and equipment
The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if 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.
Property, plant and equipment, capital work in progress is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase price, import duties, and other non-refundable taxes or levies,
borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition
for the intended use and initial estimate of decommissioning, restoring and similar liabilities, where applicable. Any trade
discounts and rebates are deducted in arriving at the purchase price. The Company identifies and determines cost of asset
significant to the total cost of the asset, having useful life that is materially different from that of the remaining life. Such cost
includes the cost of replacing part of the plant and equipment. When significant parts of plant and equipment are required
to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a
major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in statement of profit or loss
as incurred.
Gains or losses arising from de-recognition of property, plant and equipment are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Company and the cost of the item can be measured reliably.
The cost of property, plant and equipment on 1 April 2017, the Company’s date of transition to Ind AS, was determined with
reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.
c) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is recognised at fair value at the date of acquisition. An intangible asset is recognised only if it
is probable future economic benefits attributable to the asset will flow to the Company and the cost of the asset can be
measured reliably. Following initial recognition, intangible assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any. Internally generated intangible assets/ intangibles under development, excluding
capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the
period in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the estimated useful economic life. All intangible assets are
assessed for impairment whenever there is an indication that the intangible asset may be impaired.
Acquired domain names amortized on straight line basis over the period of rights, ranging between 1 to 10 years based on
management estimates. Capitalised ‘Portal development’ expenses are amortized on straight line basis over the period of
3 to 10 years.
Computer software is depreciated using the straight line method over a period based on management’s estimate of useful
lives of such software are 3 to 6 years, or over the license period of the software, whichever is shorter.
The amortisation period and the amortisation method are reviewed at least at each reporting period end. If the expected
useful life of the asset is significantly different from previous estimated, the amortisation period is changed accordingly. If
there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method
is changed to reflect the changed pattern. Such changes are treated as changes in accounting estimates.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset
is derecognized.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Company and the cost of the item can be measured reliably.
The cost of intangible assets on 1 April 2017, the Company’s date of transition to Ind AS, was determined with reference
to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.
d) Depreciation and amortisation
Depreciation on property, plant and equipment is provided using the straight line method to allocate their cost, net of
their residual values, over their estimated useful lives (determined by the management based on technical estimates).
Depreciation on addition/ (disposals) is provided on pro-rata basis i.e. from/ (up to) the date on which asset is ready for use/
(disposed of). The Company, based on technical assessment and review of history of asset usage, depreciates certain items
of Computer and network equipment, Furniture and fixtures, Office equipment and Vehicles over estimated useful lives
which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. 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.
The estimated useful lives considered for depreciation of property, plant and equipment as per Company’s policy and as
per Companies Act, 2013 are as follows:
The identified components are depreciated separately over their useful lives; the remaining components are depreciated
over the life of the principal asset.
Leasehold improvements are amortised over the primary period of lease.
The depreciation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
e) Leases
Company as lessee
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
The Company applies a single recognition and measurement approach for all leases. The Company recognises lease liabilities
to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any re-measurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of
a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (g) Impairment of non¬
financial assets.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease
term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index
or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. The Company determines
its incremental borrowing rate by obtaining interest rates from various external financing sources.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an
index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying
asset. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
f) Borrowing cost
Borrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period 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.
g) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount,
as the higher of an assets or cash-generating units (CGU) 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.
In assessing value in use, the estimated future cash flows are discounted to their present value at the pre-tax discount rate
reflecting current market assessment of time value of money and risks specific to asset. Where the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. 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 fair value less costs of disposal, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations are recognized in the statement of profit and loss. After impairment, depreciation
is provided on the revised carrying amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However,
the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual
depreciation if there was no impairment.
h) Revenue from contracts with customers and other income
Revenue from contracts with customers is recognised when control of the services is transferred to the customer at an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.
The following specific recognition criteria must also be met before revenue is recognized:
Income from services
Revenues from subscriptions towards matchmaking and marriage service contracts:
The Company recognises revenue from contracts with customers based on a five-step as set out in Ind AS-115 -
• Identification of contracts with the customer - The Company mainly generates revenue from subscriptions towards
matchmaking and marriage services contracts and Company identifies the contract with the customer when terms
and conditions are agreed that creates enforceable rights and obligations. The rights of each party, payment terms
and commercial substance is identified in the terms and condition.
• I dentify performance obligations in the contract - The Company assesses the services promised in a contract and
identified distinct performance obligation in the contract which is to render the services as agreed in the contract over
a period of time for its different services.
• Determine the transaction price - Revenue is measured based on the transaction price, which is the consideration as
specified in the contract with the customer that reflects the consideration to which the Company expects to be entitled
in exchange for those goods or services. The Company collects goods and services tax on behalf of the government
and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.
• Revenue recognition when performance obligation is satisfied - The revenue is recognized pro-rata over the period of
the contract as and when services are rendered. Deferred revenue (contract liability) is recognised once a payment is
received, or a payment is due from a customer before the Company transfers the related services. Contract liabilities are
recognized evenly over the subscription period, being performance obligation of the Company. These are recognised as
revenue when the Company performs under the contract (i.e., transfers control of the related services to the customer).
• Revenue is recognised when control of services is transferred to the customer upon the satisfaction of performance
obligation under the contract at an amount that reflects the consideration to which the Company received/ expects
to be entitled in exchange for those services.
Revenue from business license fees
Revenue from business license fees is recognised as and when the services are rendered as per the terms of the contract
at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.
Interest income
Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the
gross carrying amount of the financial asset or to the amortised cost of a financial liability. 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.
Dividends
Revenue is recognised when the Company’s right to receive the payment is established, which is generally when shareholders
approve the dividend.
Contract balances
Contract assets
A contract asset is the right to consideration in exchange of services transferred to the customer. If the Company performs
by transferring services to a customer before the customer pays consideration or before payment is due, a contract asset
is recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of
time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (q)
Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer services to a customer for which the Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers
services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is
earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
i) 1. Foreign currency transactions
The Company’s standalone financial statements are presented in INR, which is also the Company’s functional currency.
Transactions in foreign currencies entered into by the Company are initially recorded at the functional currency spot
rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates
of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on
translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on
the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in
OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
2. Foreign operations
The assets and liabilities of foreign operations (subsidiaries, associates), including goodwill and fair value adjustments
arising on acquisition, are translated into INR at the exchange rates at the reporting date. The income and expenses
of foreign operations are translated into INR at the exchange rates at the dates of the transactions or an average rate
if the average rate approximates the actual rate at the date of the transaction.
Foreign currency differences are recognised in OCI and accumulated in the equity (as exchange differences on
translating the financial statements of a foreign operation).
When a foreign operation is disposed of in its entirety or partially such that control is lost, the cumulative amount in
the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion
of the cumulative amount is reallocated to NCI. When the Group disposes of only part of an associate while retaining
significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
j) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other
than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund
scheme as expenditure, when an employee renders the related service.
The Company operates a defined benefit gratuity plan, which requires contributions to be made to a separately
administered fund.
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in
net interest on the net defined benefit liability and the return on plan assets (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 OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises
the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
• Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine
settlements; and
• Net interest expense or income.
Short term compensated absences are provided for based on estimates. Long term compensated absences are provided
based on the actuarial valuation at the year end. The actuarial valuation is done as per projected unit credit method. The
Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right
to defer its settlement for 12 months after the reporting date.
Short term employee benefits are measured on an undiscounted basis and expensed as the related service is provided. A
liability is recognised for the amount expected to be paid under short term cash bonus, if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably.
Termination:
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits
and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12
months of the reporting date, then they are discounted.
Defined benefits plans:
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net
obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future
benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value
of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present
value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions
to the plan (‘the asset ceiling’). To calculate the present value of economic benefits, consideration is given to any applicable
minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The
Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying
the discount rate determined by reference to market yields at the end of the reporting period on government bonds. This
rate is applied on the net defined benefit liability (asset), both as determined at the start of the annual reporting period,
taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and
benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss.
The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
k) Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are expensed.
l) Taxes
Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the statement of profit and
loss except to the extent it relates to items recognized directly in equity, in which case it is recognized in equity.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted,
at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in
OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets and liabilities are offset only if there is a legally enforeable right to set off the recognized amounts and
it is intended to realise the asset and settle the liability on a net basis.
Deferred tax
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.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilised.
Deferred tax is not recognised for:
• Temporary differences on the initial recognition of assets or liabilities in a transaction that :
o Is not a business combination; and
o At the time of the transaction (i) affects neither accounting nor taxable profit or loss and (ii) does not give raise
to equal taxable and deductible temporary differences.
The carrying amount of deferred tax assets is reviewed at each reporting date and written off 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 assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised 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 and the deferred taxes relate to the same taxable entity and the same taxation authority.
m) Share based payments
Employees of the Company receive remuneration in the form of share-based payments, whereby employees render services
as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over
the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative
expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which
the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately
vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period and is recognised in employee benefits expense.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number
of equity instruments that will ultimately vest.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings
per share.
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