|920| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts before revenue is recognised. The specific recognition criteria described below must also be met before revenue is recognised. Sale of goods Revenue from sale of books is recognised at the point in time when control of the asset is transferred to the customer, i.e. at the time of handing over goods to the carrier for transportation. The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of books, the Company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any). The provision for anticipated returns is made primarily on the basis of historical return rates. The provision for turnover discount, cash discount & additional discount is made on estimated basis based on historical trends. Variable consideration If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some of the contracts with customer provide a right to customer of cash rebate/discount if payment is cleared within specified due dates. • Rights of return Certain contracts provide a customer with a right to return the goods within a specified period. The provision for anticipated returns is made primarily on the basis of historical return rates as this method best predicts the amount of variable consideration to which the Company will be entitled. The requirements in Ind AS 115 on constraining estimates of variable consideration are also applied in order to determine the amount of variable consideration that can be included in the transaction price. • Volume rebates The Company provides volume rebates to certain customers once the value of products purchased during the period exceeds a threshold specified in the contract. Rebates are offset against amounts payable by the customer. To estimate the variable consideration for the expected future rebates, the Company applies the most likely amount method for contracts with a single-volume threshold and the expected value method for contracts with more than one volume threshold. The selected method that best predicts the amount of variable consideration is primarily driven by the number of volume thresholds contained in the contract. The Company then applies the requirements on constraining estimates of variable consideration and recognises a refund liability for the expected future rebates. • Cash rebates The Company provides cash rebates to certain customers if customers make the payment within the stipulated time given in the contract. The provision for cash discount is made on estimated basis based on historical trends. The Company then applies the requirements on constraining estimates of variable consideration and recognises a refund liability for the expected future rebates. Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or 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).
|921| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Contract liabilities A contract liability is the obligation to transfer goods or 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 goods or 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. Interest income Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable for all financial instruments measured at amortised cost and other interest-bearing financial assets, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, 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 (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the statement of profit or loss. Dividends Dividend Income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend. Cross Charges for Shared Services The company provides various administrative and management services through shared resources to its subsidiary companies to facilitate day to day operations. The company recognises revenue over time, because the subsidiaries receive and consume the service provided by the company over that period. Ind AS 115 adoption Ind AS 115 supersedes Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue arising from contracts with customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures. The company adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial application of 1 April 2018. Under this method, the standard can be applied either to all contracts at the date of initial application or only to contracts that are not completed at this date. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and comparative information is not restated in the financial statements. Further there were no adjustments required to the retained earnings at April 1, 2018. The adoption of the standard did not have any material impact on the recognition and measurement of revenue and related items in the financial results. 36. SAREGAMA INDIA LIMITED Accounting Policies Revenue recognition Effective 1 April 2018, the Group has applied Ind AS 115, Revenue from Contracts with Customers, which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Group has
|922| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. 1 April 2018). The comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18. Refer note 1(b) of the Consolidated Financial Statement - Significant accounting policies - Revenue recognition in the Consolidated Financial Statement of the Group for the year ended 31 March 2018, for the revenue recognition policy as per Ind AS 18. The impact of the adoption of the standard on the consolidated financial statements of the Group is insignificant. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Group expects to receive in exchange for those products or services. - Revenue from the sale of products is recognised at the point in time when control is transferred to the customer. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. For sale of product on a bill-andhold, Group recognises revenue when it satisfies its performance obligation to transfer the control of a product to the customer. For a customer to have obtained control of a product in a bill-and-hold arrangement, Group has applied the guidance as set out in Ind AS 115. - Revenue from Music licensing where the customer obtains a “right to use” is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period. - Revenue from the sale of television software is recognised upfront at the point in time when the software is delivered to the customer. - Revenue from sale of free commercial time (net of trade discount, as applicable) are recognised when the related advertisement or commercials appears before the public, i.e. on telecast. - Revenue from theatrical distribution is recognised on exhibition of films. In case of distribution through theatres, revenue is recognised on the basis of box office reports received from various exhibitors. Contracted minimum guarantees are recognised on theatrical release. - Revenue from Sale of films rights are recognised on assignment of such rights as per terms of the sale/ licencing agreements. - Revenue from current affairs and features magazine is recognised in the period in which the magazines are published and are accounted for net of commission and discounts. Revenue from subscription to the Company’s print publications is recognised as earned, prorata on a per issue basis over the subscription period. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period. Unearned and deferred revenue (“contract liability”) is recognised when there is billings in excess of revenues. Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms. Use of significant judgements in revenue recognition: - The Group exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Group considers indicators such as how customer consumes benefits as services are rendered, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc. Judgement is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, price concessions and incentives.
|923| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Disclosures 19 REVENUE FROM OPERATIONS (Amount in Rupees lakhs unless otherwise stated) Year ended 31 March 2019 Year ended 31 March 2018 Sale of products 29,477.77 14,904.60 Sale of services Income from films and television serials Licence fees 4,764.59 5,293.10 Publication 19,475.55 14,773.87 Other operating revenue 738.84 682.52 Total revenue from operations 15.23 4.53 54,471.98 35,658.62 Disaggregation of revenue from contracts with customers In the following table, revenue from contracts with customers is disaggregated by primary geography market, major products and service lines and timing of revenue recognition. The Group believes that this disaggregation best depicts how the nature, amount, timing of our revenues and cash flows are affected by geography and other economic factors: (Amount in Rupees lakhs unless otherwise stated) Sale of products Licence fees Films/Television serials Publication Year ended 31 March 2019 Year ended 31 March 2018 Year ended 31 March 2019 Year ended 31 March 2018 Year ended 31 March 2019 Year ended 31 March 2018 Year ended 31 March 2019 Year ended 31 March 2018 Revenue by geography Domestic 28,271.34 14,575.26 12,999.07 9,013.90 4,089.34 4,940.21 733.17 675.84 International 1,206.43 329.34 6,476.48 5,759.97 675.25 352.89 5.67 6.68 29,477.77 14,904.60 19,475.55 14,773.87 4,764.59 5,293.10 738.84 682.52 Timing of Revenue Recognition Products and services transferred at a point in time 29,477.77 14,904.60 12,219.14 8,764.94 4,764.59 5,293.10 720.96 663.95 Products and services transferred over time - - 7,256.41 6,008.93 - - 17.88 18.57 Total Revenue from Contracts with customers 29,477.77 14,904.60 19,475.55 14,773.87 4,764.59 5,293.10 738.84 682.52 Relationship between disclosure of disaggregated revenue and revenue information for each reportable segment has been disclosed in Note 40 to the financial statement.
|924| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Contract Balances The following table provides information about receivables and contract liabilities from contracts with customers: (Amount in Rupees lakhs unless otherwise stated) Year ended 31 March 2019 Year ended 31 March 2018 Receivables, which are included in 'trade and other receivables’ (Refer note 9.1) 10,974.55 7,303.02 Contract liabilities (Refer note 16) 1,114.81 407.51 The contract assets primarily relate to the Group’s rights to consideration for services rendered but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group issues an invoice to the customer. A receivable is a right to consideration that is unconditional upon passage of time. Revenue from the sale of products is recognised at the point in time when control is transferred to the customer. Revenue for fixed price licence fees contracts is recognized on a straight line basis over the period of the contract. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset for these cases as right to consideration is unconditional upon passage of time. Invoicing in excess of earnings are classified as unearned revenue. Unbilled revenues are presented net of impairment in the Consolidated Balance Sheet. Changes in contract assets are as follows: (Amount in Rupees lakhs unless otherwise stated) Year ended 31 March 2019 Year ended 31 March 2018 Balance at the beginning of the year 407.51 431.75 Revenue recognised that was included in the contract liabilities at the beginning of the year Increase due to invoicing during the year, excluding amounts recognised as revenue during the year (407.51) (431.75) Balance at the end of the year 1,114.81 407.51 1,114.81 407.51 The Parent Company has entered into a few contracts where the period between the transfer of the promised goods or services to the customer and payments by the customer exceeds one year and hence, there exists a financing component included in such contracts. On evaluation of the terms of the contracts, the effects of financing have not been found to be significant and the same has been adjusted accordingly. Reconciliation of revenue recognised with the contracted price from sale of products is as follows: (Amount in Rupees lakhs unless otherwise stated) Year ended 31 March 2019 Year ended 31 March 2018 Contracted price 55,662.92 36,590.24 Reductions towards variable consideration components (1,206.17) (936.15) Revenue recognised 54,456.75 35,654.09 The reduction towards variable consideration comprises of volume discounts, incentives, etc.
|925| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Performance obligation The following table provides information about the nature and timing of performance obligation in contracts with customers, including significant payment terms and related revenue recognition policies: Type of product Nature and timing of satisfaction of performance obligation, including significant payment terms Revenue recognition under Ind AS 115 (applicable from 1 April 2018) Physical products In case of sales of products, customer obtain control of the products when the goods are dispatched from the Company's warehouse. Invoices are generated and revenue is recognised at that point in time. For sale of product on a bill-and hold basis, for a customer to have obtained control of a product in a bill-and-hold arrangement, Group has applied the guidance as set out in Ind AS 115. Revenue from the sale of products is recognised at the point in time when control is transferred to the customer. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. Group recognises revenue when it satisfies its performance obligation to transfer the control of a product to the customer. For a customer to have obtained control of a product in a bill-and-hold arrangement, Group has applied the guidance as set out in Ind AS 115. Music Licensing The performance obligation of "right-touse" of Music Licensing contracts gets satisfied at the time of entering into agreement/ contracts with customers. In case of "right-to-access" of Music Licensing contracts, the Group undertakes activities that significantly affect the Music Licenses to which the customer has rights. In these cases, the performance obligation gets complete when the Customers accesses the music licenses. Payment is made as per the terms of the Contract. Revenue from Music licensing where the customer obtains a "right to use" is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a "right to access" is recognized over the access period. Sale of Television Software In case of sale of TV Software, customer obtain control of the TV Software when the same is delivered to them and revenue is recognised at that point in time. Revenue from the sale of television software is recognised upfront at the point in time when the software is delivered to the customer. Sale of Free Commercial Time The performance obligation gets satisfied at the time when the related advertisement or commercials appears before the public, i.e. on telecast. Revenue from sale of free commercial time (net of trade discount, as applicable) are recognised when the related advertisement or commercials appears before the public, i.e. on telecast.
|926| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Type of product Nature and timing of satisfaction of performance obligation, including significant payment terms Revenue recognition under Ind AS 115 (applicable from 1 April 2018) Theatrical Distribution of Films The performance obligation gets satisfied at the time of exhibition of films. Revenue from theatrical distribution is recognised on exhibition of films. In case of distribution through theatres, revenue is recognised on the basis of box office reports received from various exhibitors.Contracted minimum guarantees are recognised on theatrical release. Sale of Film Rights The performance obligation gets satisfied at the time of assignment of such rights as per terms of the sale/licencing agreements. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period. Revenue from Sale of films rights are recognised on assignment of such rights as per terms of the sale/ licencing agreements. Publication revenue The performance obligation gets satisfied when the magazines are published. The performance obligation gets satisfied when the publications are delivered to the subscribers over the subscription period. Revenue from current affairs and features magazine is recognised in the period in which the magazines are published and are accounted for net of commission and discounts. Revenue from subscription to the Group's print publications is recognised as earned, prorata on a per issue basis over the subscription period. 37. SHOPPERS STOP LIMITED 2.4 Revenue from contract with customer 2.4.1 In Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements except for the agency services because it typically controls the goods before transferring them to the customer and sales under sale or return basis arrangements where in the Company has during this financial year adopted modified retrospective approach in line with Ind As 115, Revenue from Contracts with customers, mandatory for reporting periods beginning on or after 1 April 2018. 2.4.2 Retail sale of Merchandise: Revenue from Retail sales is measured at the fair value of the consideration received. Revenue is reduced for discounts and rebates, and, value added tax, sales tax and Goods and Service Tax (GST). Retail sales are recognised on delivery of the merchandise to the customer, when the property in goods and control are transferred for a price and no effective ownership control is retained. Where the Company is the principal in the transaction the Sales are recorded at their gross values. Where the Company is effectively the agent in the transaction, the difference between the revenue and the cost of the merchandise is disclosed as other operating income. (Refer Note 19)
|927| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Point award schemes: The fair value of the consideration received or receivable on sale of goods that result in award credits for customers, under theGroup’s point award schemes, is allocated between the goods supplied and the award credits granted. The consideration allocated to the award credits is measured by reference to their fair value from the standpoint of the holder and is recognised as revenue on redemption and/or expected redemption after breakage. Property option revenue: The Group has acquired the rights to sell flats in a property being constructed by a third party (termed Property Options), which are initially recognised at cost and at each reporting date valued at lower of cost and net realisable value. Sale of option inventory is recognised when there is a transfer of significant risks and rewards in accordance with the terms of the sale contracts. To the extent the transactions contain a significant financing component, it is adjusted from the total consideration using the appropriate discount rate and recognised in profit or loss over the credit period. 2.4.3 Gift vouchers: The amount collected on sale of a gift voucher is recognised as a liability and transferred to revenue (sales) when redeemed or to revenue (other retail operating revenue) on expiry. 2.4.4 Other retail operating revenue: Revenue from store displays and sponsorships arerecognised based on the period for which the productsor the sponsors’ advertisements are promoted /displayed. Facility management fees are recognised pro-rata over the period of the contract. Income from services are recognized as they are rendered based on agreements/arrangements with the concerned parties and recognized net of service tax. 2.4.5 Direct Marketing income: Such income is recognisedon straight line basis over the validity of the cards. 2.4.6 Franchisee income: Such income is recognized in accordance with the rates specified in the franchisee agreements and is based on the sales recorded by the franchisees for the year. Disclosure For the year ended 31 March 2019 For the year ended 31 March 2018 19 Revenue from contracts with customers 331,554.63 363,468.12 Retail sale of merchandise Other Retail operating revenue Net proceeds from SOR (Refer note 40) 15,119.99 - Net income from concessionaire and consignment model 4,849.58 - Facility management fees 2,638.00 2,578.98 Income from store displays and sponsorship 561.71 631.69 Gift Vouchers lapsed 1,853.60 1,721.92 Direct marketing 1,013.66 1,059.72 Income from franchisees 201.98 212.00 26,238.52 6,204.31 357,793.15 369,672.43 19.1 Disaggregated revenue information Set out below is the disaggregation of the Company’s revenue from contracts with customers: Type of goods or sevice Sale of goods 372,216.73 406,004.69 Net proceeds from SOR 15,119.99 - Net income from concessionaire and consignment model 4,849.58 -
|928| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts For the year ended 31 March 2019 For the year ended 31 March 2018 Other operating income 6,268.95 6,204.31 Tax (40,662.10) (42,536.57) Total Revenue from contracts with customers 357,793.15 369,672.43 India 357,793.15 369,672.43 Outside India - - Timing of revenue recognition Goods transferred at a point in time 351,524.20 363,468.12 Services transferred over time (Other operating income) 6,268.95 6,204.31 Total Revenue from contracts with customers 357,793.15 369,672.43 19.2 Contract balances Trade receivables* 4,724.24 4,771.72 *Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. 19.3 Reconciling the amount of revenue recognised in the statement of profit and loss with the Particulars 31 March 2019 31 March 2018 Contracted price Revenue as per contracted price 482,313.83 460,914.44 Adjustments Loyalty points (4,207.69) (4,427.98) Sales return (22,430.48) (18,043.66) Discount (97,882.51) (68,770.37) Revenue from contract with customers 357,793.15 369,672.43 40 Revenue from contracts with customers The Group has applied IND AS 115 for the first time with effect from 1 April 2018. IND AS 115 supersedes IND AS 18 Revenues and it applies, with limited exceptions to all revenues arising from contracts with customers. IND AS 115 establishes a five step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. IND AS 115 requries entitles to exercise judgement, taking into consideration all the relevant facts and circumstances when applying each step of model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures. The Group adopted IND AS 115 using the modified retrospective method of adoption with the date of initial application of 1 April 2018 and there are no adjustments required to the retained earnings as at 1 April 2018. Due to the application of Ind-AS 115, revenue for the year ended 31 March 2019 is lower by ` 41,147.78 Lacs and other operating income is higher by ` 15,119.99 Lacs resulting into lower revenue from operations and cost of goods sold by ` 26,027.79 Lacs on account of impact of sales or return (SOR) basis arrangements as company is agent. However, this does not have any impact on profits/(loss) for year ended 31 March 2019. 38. SPICEJET LIMITED Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, except for the agency services below, because it typically controls the goods or
|929| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers services before transferring them to the customer. The revenue is recognized net of Goods and Service Tax (if any). Rendering of services Passenger revenues and cargo revenues are recognised as and when transportation is provided i.e. when the service is rendered. Amounts received in advance towards travel bookings/ reservations are shown under current liabilities as contract liability. Fees charged for cancellations or any changes to flight tickets and towards special service requests are recognized as revenue on rendering of related services. The unutilized balances in unearned revenue is recognized as income based on past statistics, trends and management estimates, after considering the Group’s refund policy. Revenue from wet lease of aircraft is recognised as follows: a) The fixed rentals under the agreements are recognised on a straight-line basis over the lease period. b) The variable rentals in excess of the minimum guarantee hours are recognised based on actual utilisation of the aircraft during the period. Income in respect of hiring/ renting out of equipment and spare parts is recognised at rates agreed with the lessee, as and when related services are rendered. When another party is involved in providing services to its customer, the Group determines whether it is a principal or an agent in these transactions by evaluating the nature of its promise to the customer. The Group is a principal and records revenue on a gross basis if it controls the promised services before providing them to the customer. However, if the Group’s role is only to arrange for another entity to provide the services, then the Group is an agent and will need to record revenue at the net amount that it retains for its agency services. The Group has applied the practical expedient and recognised the costs of selling airline travel tickets as an expense when it is incurred. Contract assets A contract asset is the right to consideration in exchange for services transferred to the customer. If the Group 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. Sale of food and beverages Revenue from sale of food and beverages is recognised when the products are delivered or served to the customer. Revenue from such sale is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Amounts received in advance towards food and beverages are shown under current liabilities as unearned revenue. Sale of Goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Training Income Revenue from training income is recognized proportionately with the degree of completion of services, based on management estimates of the relative efforts as well as the period over which related training activities are rendered for individual employees by the Group. Interest 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. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the
|930| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss. 39. SUN PHARMACEUTICAL INDUSTRIES LIMITED Revenue Sale of goods Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, since it is the primary obligor in all of its revenue arrangement, as it has pricing latitude and is exposed to inventory and credit risks. Revenue is stated net of goods and service tax and net of returns, chargebacks, rebates and other similar allowances. These are calculated on the basis of historical experience and the specific terms in the individual contracts. In determining the transaction price, the Group considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any). The Group estimates variable consideration at contract inception until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Sales returns The Group accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a product sale. This allowance is based on the Group’s estimate of expected sales returns. With respect to established products, the Group considers its historical experience of sales returns, levels of inventory in the distribution channel, estimated shelf life, product discontinuances, price changes of competitive products, and the introduction of competitive new products, to the extent each of these factors impact the Group’s business and markets. With respect to new products introduced by the Group, such products have historically been either extensions of an existing line of product where the Group has historical experience or in therapeutic categories where established products exist and are sold either by the Company or the Company’s competitors. Contract balances Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or 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 Group’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). Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or 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 Group performs under the contract. Rendering of services Revenue from services rendered is recognised in the profit or loss as the underlying services are performed. Upfront non-refundable payments received are deferred and recognised as revenue over the expected period over which the related services are expected to be performed.
|931| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Royalties Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement (provided that it is probable that economic benefits will flow to the Group and the amount of revenue can be measured reliably). Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement. Dividend and interest income Dividend income is recognised when the Group’s right to receive the payment is established, which is generally when shareholders approve the dividend. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. 40. TATA CHEMICALS LIMITED Revenue recognition Sale of goods Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Group expects to receive in exchange for those goods. Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is usually on dispatch / delivery of goods, based on contracts with the customers. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for discounts/ incentives and returns are estimated (using the most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short nature of credit period given to customers, there is no financing component in the contract. The Group has adopted Ind AS 115 Revenue from contracts with customers, with effect from April 1, 2018. Ind AS 115 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising from the contracts with its customers and replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Group has adopted Ind AS 115 using the cumulative effect method whereby the effect of applying this standard is recognised at the date of initial application (i.e. April 1, 2018). Accordingly, the comparative information in the statement of profit and loss is not restated. The impact of the adoption of the standard on the financial statements of the Group is given in note 25. Notes: 21. Revenue from operations Particulars Year ended March 31, 2019 Year ended March 31, 2018 (a) Sales of products (footnote 'ii' to 'v') 11,217.91 10,256.63 (b) Other operating revenues (i) Liabilities no longer required-written back - 6.09 (ii) Miscellaneous income (footnote 'i') 78.42 82.64 78.42 88.73 11,296.33 10,345.36
|932| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Footnotes: (i) Miscellaneous income primarily includes sales of scrap of D48.80 crore (previous year D39.58 crore). (ii) Reconciliation of sales of products Revenue from contract with customer 11,928.51 10,858.27 Adjustments made to contract price on account of (a) Discounts / Rebates / Incentives (193.13) (190.09) (b) Sales Returns / Credits / Reversals - Agri business (517.47) (487.22) (c) Excise duty invoiced - 75.67 11,217.91 10,256.63 (i) On adoption of Ind AS 115 - Revenue from Contracts with Customers with effect from April 1, 2018, the Group has evaluated its performance obligations relating to freight arrangements on sales to customers. Consequently following the cumulative effect method, freight and forwarding charges and revenue from operations are higher by D172.54 crore for the year ended March 31, 2019 (comparatives have not been restated); however, these do not have any impact on the profit. (ii) For operating segments revenue, geographical segments revenue, revenue from major products and revenue from major customers refer note 39.1. (iii) Sales includes excise duty upto June 30, 2017 and hence figures are not comparable. 41. TATA COFFEE LIMITED (i) Revenue from contracts with customer Revenue from contract with customers is recognised when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations are satisfied at the point of time when the customer obtains controls of the asset. Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and value added tax. Transaction price is recognised based on the price specified in the contract, net of the estimated sales incentives/ discounts. Accumulated experience is used to estimate and provide for the discounts/ right of return, using the expected value method. ii) Interest and dividend income Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognised using the original effective interest rate. Dividend income is recognised when the right to receive payment is established. Income from investments are accounted on an accrual basis. 42. TATA CONSULTANCY SERVICES LIMITED Revenue recognition The Group earns revenue primarily from providing IT services, consulting and business solutions. The Group offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions. Effective April 1, 2018, the Group has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18
|933| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Revenue and Ind AS 11 Construction Contracts. The Group has adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. April 1, 2018). The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information in the consolidated statement of profit and loss is not restated – i.e. the comparative information continues to be reported under Ind AS 18 and Ind AS 11. Refer note 2(f) – Significant accounting policies – Revenue recognition in the Annual report of the Company for the year ended March 31, 2018, for revenue recognition policy as per Ind AS 18 and Ind AS 11. The impact of adoption of the standard on the financial statements of the Group is insignificant. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Group expects to receive in exchange for those products or services. • Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc. • Revenue related to fixed price maintenance and support services contracts where the Group is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance. • In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method (‘POC method’) of accounting with contract costs incurred determining the degree of completion of the performance obligation. The contract costs used in computing the revenues include cost of fulfilling warranty obligations. • Revenue from the sale of distinct internally developed software and manufactured systems and thirdparty software is recognised upfront at the point in time when the system / software is delivered to the customer. In cases where implementation and / or customisation services rendered significantly modifies or customises the software, these services and software are accounted for as a single performance obligation and revenue is recognised over time on a POC method. • Revenue from the sale of distinct third party hardware is recognised at the point in time when control is transferred to the customer. • The solutions offered by the Group may include supply of third-party equipment or software. In such cases, revenue for supply of such third party products are recorded at gross or net basis depending on whether the Group is acting as the principal or as an agent of the customer. The Group recognises revenue in the gross amount of consideration when it is acting as a principal and at net amount of consideration when it is acting as an agent. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms. Unearned and deferred revenue (“contract liability”) is recognised when there is billings in excess of revenues. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period. In accordance with Ind AS 37, the Group recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received. Contracts are subject to modification to account for changes in contract specification and requirements. The Group reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change.
|934| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for. The Group disaggregates revenue from contracts with customers by industry verticals, geography and nature of services. Use of significant judgements in revenue recognition • The Group’s contracts with customers could include promises to transfer multiple products and services to a customer. The Group assesses the products / services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables. • Judgement is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Group allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations. • The Group uses judgement to determine an appropriate standalone selling price for a performance obligation. The Group allocates the transaction price to each performance obligation on the basis of the relative stand-alone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Group uses the expected cost plus margin approach to allocate the transaction price to each distinct performance obligation. • The Group exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Group considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc. • Revenue for fixed-price contracts is recognised using percentage-of-completion method. The Group uses judgement to estimate the future cost-to-completion of the contracts which is used to determine the degree of the completion of the performance obligation. • Contract fulfilment costs are generally expensed as incurred except for certain software licence costs which meet the criteria for capitalisation. Such costs are amortised over the contractual period or useful life of the licence, whichever is less. The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered. • Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method.
|935| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers b) Notes to Accounts 23) Revenue Revenue consists of the following: (` crore) Year ended March 31, 2019 Year ended March 31, 2018 Consultancy services 143,935 120,128 Sale of equipment and software licences 2,528 2,976 146,463 123,104 Revenue disaggregation as per industry vertical and geography has been included in segment information (Refer note 32). While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Group has applied the practical expedient in Ind AS 115. Accordingly, the Group has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts. Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc). The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is ` 82,489 crore out of which 54.48% is expected to be recognised as revenue in the next year and the balance thereafter. No consideration from contracts with customers is excluded from the amount mentioned above. Changes in contract assets are as follows: (` crore) Year ended March 31, 2019 Balance at the beginning of the year 2,882 Revenue recognised during the year 11,404 Invoices raised during the year (10,893) Translation exchange difference 35 Balance at the end of the year 3,428 Changes in unearned and deferred revenue are as follows: (` crore) Year ended March 31, 2019 Balance at the beginning of the year 2,535 Revenue recognised that was included in the unearned and deferred revenue balance at the beginning of the year (2,376) Increase due to invoicing during the year, excluding amounts recognised as revenue during the year 2,996 Translation exchange difference 81 Balance at the end of the year 3,236
|936| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Reconciliation of revenue recognised with the contracted price is as follows: (` crore) Year ended March 31, 2019 Contracted price 148,649 Reductions towards variable consideration components (2,186) Revenue recognised 146,463 The reduction towards variable consideration comprises of volume discounts, service level credits, etc. 43. THE INDIAN HOTELS COMPANY LIMITED Revenue recognition Revenue is recognised at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring the goods or services to a customer i.e. on transfer of control of the goods or service to the customer. Revenue from sales of goods or rendering of services is net of Indirect taxes, returns and discounts. Effective April 1, 2018 the Group has applied Ind AS 115 which replaces Ind AS 18 revenue recognition. Refer note 2(d) – Significant accounting policies – Revenue recognition in the Annual report of the group for the year ended March 31, 2018, for the revenue recognition policy as per Ind AS 18. Income from operations Rooms, Food and Beverage & Banquets: Revenue is recognised at the transaction price that is allocated to the performance obligation. Revenue includes room revenue, food and beverage sale and banquet services which is recognised once the rooms are occupied, food and beverages are sold and banquet services have been provided as per the contract with the customer. Space and shop rentals: Rentals basically consists of rental revenue earned from letting of spaces for retails and office at the properties. These contracts for rentals are generally of short term in nature. Revenue is recognized in the period in which services are being rendered. Other Allied services: In relation to the, laundry income, communication income, health club income, airport transfers income and other allied services, the revenue has been recognized by reference to the time of service rendered. Management and Operating fees: Management fees earned from hotels managed by the Group are usually under long-term contracts with the hotel owner. Under Management and Operating Agreements, the Group’s performance obligation is to provide hotel management services and a license to use the Company’s trademark and other intellectual property. Management and incentive fee is earned as a percentage of revenue and profit and are recognised when earned in accordance with the terms of the contract based on the underlying revenue, when collectability is certain and when the performance criteria are met. Both are treated as variable consideration. Membership Fees: Membership fee income majorly consists of membership fees received from the loyalty program and Chamber membership fees. Income is earned when the customer enrols for membership programs. In respect of performance obligations satisfied over a period of time, revenue is recognised at the allocated transaction price on a time-proportion basis. Loyalty programme: The Group operates loyalty programme, which provides a material right to customers that they would not exercise without entering in to a contract and the eligible customers earns points based on their spending at the hotels. The points so earned by such customers are accumulated. The revenues related to award points is deferred and a contract liability is created and on redemption/ expiry of such award points, revenue is recognised at pre-determined rates.
|937| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Contract balances (effective from April 1, 2018) a) Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or 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. b) Contract liabilities A contract liability is the obligation to transfer services to a customer for which the Group has received consideration from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Group performs under the contract. Interest Interest income is accrued on a time proportion basis using the effective interest rate method. Dividend Dividend income is recognised when the Group’s right to receive the amount is established. 44. TORRENT POWER LIMITED The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 on 28th March, 2018 which include Indian Accounting Standard (Ind AS) 115 in respect of ‘Revenue from Contracts with Customers’ which has replaced inter alia, the existing Ind AS 18 ‘Revenue’ and is mandatory for reporting periods beginning on or after 1st April, 2018. Revenue is recognized, when the control of the goods or services has been transferred to consumers. Revenue is measured at the fair value of the consideration received or receivable, net of discounts and other similar allowances. (i) Revenue from power supply and transmission charges is accounted for in accordance with the principles laid down under the relevant Tariff Regulations / Tariff Orders notified by the Electricity Regulator. Revenue recognized includes amounts billed to consumers on the basis of recording of consumption of energy by installed meters based on the applicable tariff and adjustments in respect of unbilled amounts towards revenue gaps / unapproved FPPPA which are recognised considering applicable tariff regulations/ tariff orders, past trends of approval, management’s probability estimate and, when no significant uncertainty exists in such determination. These adjustments / accruals are carried forward as ‘Unbilled revenue’ under “Other current financial assets” in Note 18, which would be adjusted through future billing based on tariff determination by the regulator in accordance with the electricity regulations. (ii) Sales of cables and trading of RLNG are recognised, net of returns and rebates, on transfer of control of ownership to the buyer. Sales exclude Goods and service tax. (iii) Gross proceeds from sale of Certified Emission Reduction certificates (CERs) are recognized when all the control of CERs have been passed to the buyer, usually on delivery of the CERs. (iv) Income from Generation Based Incentive is accounted on accrual basis considering eligibility of project for availing incentive. (v) Contributions by consumers towards items of property, plant and equipment, which require an obligation to provide electricity connectivity to the consumers, are recognised as a credit to deferred revenue. Similarly, contribution by third party towards construction of overhead transmission lines are recognized as a credit to deferred revenue. Such revenue is recognised over the useful life of the property, plant and equipment.
|938| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The Group has recognised revenue (including the adjustment in respect of unapproved FPPPA claims and other true up adjustment claims) as per the applicable tariff regulations / tariff orders, management’s probability estimate and the past trends of approval. The Group has not recognized those truing up adjustment claims which are subject of dispute and for which the group is in appeal with regulatory authorities. Disclosure Notes: i) (a) During the year, APMuL got into arrangement with Gujarat Urja Vikas Nigam Limited (“GUVNL”) whereby it got amended 2000 MW Power Purchase Agreement i.e. Bid 1 and Bid 2 through Supplemental Power Purchase Agreements (“SPPAs”) for 2434 MW capacity with GUVNL which are effective from 15th October, 2018. The SPPAs have been approved by CERC vide its order dated 12th April, 2019. The amendments through SPPA is mainly on account of Energy charges, Capacity charges and additional contractual capacity of 434MW. The effect of Supplemental Agreement in terms of additional revenue of ` 711.28 crores has been accrued during the current year. (b) Revenue from operation includes income of ` 197.50 Crores pertaining to the period up to 31st March 2018, which has been recognized by APMuL based on notifications and orders received during the current year from various regulatory authorities such as CERC/APTEL relating to various claims. ii) (a) In case of APML, Maharashtra Electricity Regulatory Commission (“MERC”) vide its order dated 7th March, 2018 had given a favorable order against APML’s petition for change in law claims on account of shortage of coal supply under the New Coal Distribution Policy (“NCDP’ policy) upto 31st March, 2017 for the generation capacity tied up under Power Purchase Agreements (“PPAs”) of 1180 MW having Fuel Supply Agreements (“FSAs”) (unit 1 & 2) and for generation capacity tied up under PPAs of 1320 MW (unit 4 & 5) having MOUs. APML had accounted estimated income against such claims in previous financial years aggregating to ` 1,685.12 crores. During the year, APML has revised the revenue estimation based on the latest deliberations with Maharashtra State Electricity Distribution Company Limited (“MSEDCL”), to revised certain cost parameters and other variables and an additional income of ` 624.87 crores was recognised for the period upto 31st March, 2017 in the matter of compensation in lieu of non-availability of coal linkages / coal under FSAs. For the period subsequent to 1st April, 2017, MERC vide its order dated 7th February, 2019 has allowed APML to raise claim under change in law provisions on account of shortage of coal supplies. During the year, based on the said order, APML has recognised revenue of ` 1,157.84 crores and ` 743.32 crores pertaining to FY 2017-18 and FY 2018-19 respectively. The aforesaid claims have been recognised based on certain variables as per the methodology given in the MERC order and may be subject to final adjustments after MSEDCL reviews the claims. (b) APML under a long term Power Purchase Agreement (“the PPA”) with MSEDCL, has committed 1,320 MW capacity from Phase I & II of the APML’s Power Plants at Tiroda, Maharashtra for 25 years, with one of the sources of coal from Lohara Coal Block (in respect of 800MW capacity). However, before APML could source coal from Lohara Coal Block, the Terms of Reference (“TOR”) for Lohara Coal Block were withdrawn on 25th November, 2009 by the Ministry of Environment and Forest (“MOEF”). Subsequently, the MOEF in January 2010 confirmed that Lohara Block will not be considered for environment clearance. APML had generated power and supplied power to MSEDCL from 25th March, 2013 for unit 2 and unit 3, based on coal procured from alternative suppliers. For the losses suffered by APML due to consumption of alternative coal in the generation and supply of power to MSEDCL, APML
|939| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers is in appeal with APTEL since 2014, in this matter relating to compensation for losses suffered due to de-allocation of the Lohara Coal Block. During the year, APML has reversed revenue of ` 1,259.71 crores (including ` 1,258.54 crores pertaining to earlier years) being probable compensation for losses suffered due to consumption of alternative coal, since the matter is sub-judice and pending with APTEL for final decision, on a prudent accounting basis. (c) During the year, in case of APML revenue from operations (Power Supply) includes net income reversal of ` 567.22 crores for the period upto 31st March, 2018 (excluding amounts disclosed in note (a) and (b) above) based on notifications and orders received during current year from various regulatory authorities such as MERC / APTEL relating to various claims, including escalation / de-escalation claims. iii) (a) APRL under long term Power Purchase Agreements (“the PPAs”), has committed 1200 MW capacity with Rajasthan Discoms with a substantially fixed tariff for twenty five years. APRL had made an application to the Rajasthan Electricity Regulatory Commission (“RERC”) for evolving a mechanism for regulating and revising the power tariff on account of frustration and/or occurrence of “Force Majeure” and/or “Change in Law” events under the PPAs with Rajasthan Discoms, due to change in circumstances for the allotment of domestic coal by the Government of India and the enactment of new coal pricing regulations by Indonesian Government. In response to appeals filed by the Rajasthan Discoms against RERC order dated 30th May, 2014, APTEL vide its order dated 11th May, 2016 had set aside the order of RERC, except to the extent whether the non-availability / short supply of domestic coal as also the change in Indonesian coal regulations constitute a Force Majeure event or not, and remanded the matter to RERC. In light of the Hon’ble Supreme Court order dated 11th April, 2017 in the case of APMuL, that the change in New Coal Distribution Policy (“NCDP”) and Tariff Policy constitute Change in Law event, APRL had filed an affidavit with RERC to grant relief due to non-availability/shortage of domestic coal, as a Change in Law event. During the year, RERC vide its order dated 17th May, 2018, has granted relief as provided under clause 10 of the PPAs for the additional cost incurred on procurement of alternate coal based on the direction of Hon’ble Supreme Court of India in the case of Energy Watchdog V/s CERC and others whereby the claim receivable on account of NCDP policy of the government, for the period May 2013 to January 2018 was revised in the books on the best estimate basis. In earlier years, APRL had recognised claim receivable as unbilled revenue. The Rajasthan Discoms have filed an appeal against the aforesaid order of RERC. Meanwhile, based on the petition filed by Rajasthan Discoms against APTEL’s interim order dated 24th September, 2018 directing them to pay provisional amount equivalent to 70% of the claim amount, Hon’ble Supreme Court of India vide its order dated 29th October, 2018 directed Rajasthan Discoms to pay provisional amount equivalent to 50% of the amount claimed within the period of 2 months from the date of order. Pursuant to the said order, APRL has received ` 2,351.14 Crores from Discoms till 31st March, 2019. As per the assessment by the Management, it would not be unreasonable to expect ultimate collection of the entire amount of relief recorded in the books of accounts since financial year 2013-14. Revenue from Power Supply includes relief / compensation of ` 11.60 Crores for the year ended 31st March, 2019 (` 565.42 Crores for the year ended 31st March, 2018) and ` 2,557.93 Crores recognised by APRL up to 31st March, 2019 based on RERC order dated 17th May, 2018. (b) In case of APRL, Revenue from operations (Power Supply) includes income of ` 222.66 Crores for the period upto 31st March, 2018 recognised during the current year based on notifications and orders received during current year from various regulatory authorities such as RERC / APTEL relating to various claims including cost escalation / de-escalation claims.
|940| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts (c) CERC issued notification dated 8th December, 2017 amending annual escalation rate of domestic coal applicable for the period October 2012 to September 2014, for determination of tariff escalation / de-escalation as per Power Purchase Agreement. APRL has filed petition against the said notification with Hon’ble Delhi High Court and the matter is yet to be decided. Meanwhile, Hon’ble Delhi High Court issued a stay order against the above referred CERC notification vide its order dated 7th February, 2018. APRL based on the reasoning given in the stay order and also based on the management assessment supported by legal opinion in the matter, believes that the said notification will be set aside and hence, it shall not have any financial impact. The respective Discoms have included equivalent receivables in the matter under reconciliation for payment / closure. iv) Revenue from Operations on account of Force Majeure / Change in Law events in terms of Power Purchase Agreements with various State Power Distribution Utilities is accounted for by the APMuL, APML and APRL based on best management estimates including orders / reports of Regulatory Authorities in some cases, which may be subject to adjustments on account of final orders of the respective Regulatory Authorities or final closure of the matter with the customers. Contract balance The following table provides information about receivables, contract assets and contract liablities from the contracts with customers. Particulars As at 31st March 2019 As at 31st March 2018 As at 1st April 2017 Trade Receivable 8,550.99 6,069.81 7,704.34 Contract Assets (unbilled revenue) 1,466.15 4,795.43 2,268.37 Contract Liabilities (advance from customers) 72.23 130.26 709.27 Set out below is the amount of revenue recognised from: As at 31st March 2019 As at 31st March 2018 Amount included in contract liabilities at the beginning of the year 130.26 709.27 Reconciliation of the amount of revenue in the statement of profit and loss with contracted price Particulars For the year ended 31st March 2019 For the year ended 31st March 2019 Revenue as per contract price 24,126.62 20,572.65 Adjustments Discount on prompt payment (218.35) (268.37) Discount under Shakti Scheme (24.09) - Revenue from contract with customers* 23,884.18 20,304.28 * The said amount is net off adjustments on account of change in estimates made during the year. 45. TRIDENT LIMITED Significant Accounting Policies Changes in accounting policies and disclosures New and amended standards and interpretations The Group & its associates applied Ind AS 115 for the first time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below:
|941| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Ind AS 115 Revenue from Contracts with Customers Ind AS 115 was issued on 28 March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures. The Group & its associates adopted Ind AS 115 using the full retrospective method of adoption. The effect of the transition on the current year has not been disclosed as the standard provides an optional practical expedient. The Group & its associates did not apply any of the other available optional practical expedients. The change did not have a material impact on profit or loss, OCI and cash flows for the year. Revenue recognition Revenue from contracts with customers is recognised when control of the goods are transferred to the customer at an amount that reflects the consideration to which the Group & its associates expect to be entitled in exchange for those goods or services. The Group & its associates have generally concluded that it is the principal in its revenue arrangements because it typically controls the goods before transferring them to the customer. Disclosure REVENUE FROM CONTRACTS WITH CUSTOMERS Particulars For the year ended March 31, 2019 For the year ended March 31, 2018 Sale of products # : Manufactured - Textiles 38,972.2 33,871.2 - Paper 9,074.7 7,978.1 - Chemical 787.7 540.0 48,834.6 42,389.3 Traded - Textiles (Towel) 236.0 23.3 236.0 23.3 - Export Incentives 2,044.3 1,884.1 - Goods and service tax subsidy 32.3 80.6 Other operating revenue: - Waste 1,327.6 1,328.9 - Others 11.2 11.3 3,415.4 3,304.9 Total 52,486.0 45,717.5
|942| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts a. Revenue from contracts with customers disaggregated based on nature of product or services Particulars For the year ended March 31, 2019 For the year ended March 31, 2018 Revenue from sale of products (including excise duty) - Textiles 38,972.2 33,871.2 - Paper 9,074.7 7,978.1 - Chemical 787.7 540.0 Traded Sales of Textiles (Towel) 236.0 23.3 Other operating revenue 1,338.8 1,340.2 50,409.4 43,752.8 Set out below is the revenue from contracts with customers and reconciliation to Statement of profit and loss Particulars For the year ended March 31, 2019 For the year ended March 31, 2018 Total revenue from contracts with customers 50,409.4 43,752.8 Add: Items not included in disaggregated revenue: - Export Incentives 2,044.3 1,884.1 - Goods and service tax subsidy 32.3 80.6 Revenue from contracts with customer as per the statement of profit and loss 52,486.0 45,717.5 b. Contract balances: The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: Particulars For the year ended March 31, 2019 For the year ended March 31, 2018 Trade receivables 6,576.5 4,604.2 Advances from customers 143.6 129.5 46. WELSPUN INDIA LIMITED Significant Accounting Policies Revenue recognition The Group’s contracts with customers include promises to transfer goods to the customers. Judgment is required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as schemes, incentives, cash discounts, rebates, chargebacks, markdowns etc. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and is reassessed at the end of each reporting period. Cost to obtain a contract are generally expensed as incurred. The assessment of these criteria requires the application of judgment, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered. Changes in accounting policies and disclosures The Group applied Ind AS 115 for the first time. The nature and effect of the changes as a result of adoption of this new accounting standard are described below.
|943| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Ind AS 115 – Revenue from Contracts with Customers Ind AS 115 was issued on March 28, 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five- step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures. The Group adopted Ind AS 115 using the modified retrospective method of adoption. The change did not have a material impact on the financial statements of the Group. Disclosure Note 15 : Revenue from operations Particulars Year ended March 31, 2019 Year ended March 31, 2018 (a) Sale of Products Finished Goods and Traded Goods 57,178.58 52,655.86 Power & Steam 974.19 646.78 Sub Total 58,152.77 53,302.64 (b) Other operating income Government Grant: VAT/ State Goods and Service Tax incentive (SGST) 1,732.45 2,249.65 [Refer Note (i) below] Export Benefits [Refer Note (ii) below] 4,044.80 4,319.44 Sale of Coal 712.09 25.64 Sale of Scrap 623.65 607.00 Job Work and Processing Charges 0.39 1.38 Sub Total 7,113.38 7,203.11 Total 65,266.15 60,505.75 Notes: (i) Value Added Tax (VAT)/State Goods and Service Tax (SGST) Concession: Reimbursement of VAT/SGST collected on end product/intermediate product to the extent of the eligible capital investments in plant and machinery for the specified period as per the Scheme. (ii) Merchandise Export Incentive Scheme (MEIS): Company is entitled for reward under MEIS computed at specified rates on FOB value of exports to specified countries.
|944| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts (iii) Revenue from contracts with customers 1) Disaggregated revenue information Set out below is the disaggregation of the Company’s revenue from contracts with customers: ` in Million Revenue Year ended March 31, 2019 Year ended March 31, 2018 India 6,299.81 4,164.71 Outside India 53,189.09 49,771.95 Total revenue from contracts with customers 59,488.90 53,936.66 2) Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers ` in Million Particulars As At March 31, 2019 As At March 31, 2018 Trade receivables* 10,768.06 9,309.90 Contract liabilities (advances from customers) 96.88 74.84 Refund liabilities (Rebates, discounts, chargebacks, markdowns, etc.) 720.57 519.71 * Trade receivables are non-interest bearing and are generally on terms of 0 to 120 days. 3) Reconciliation of revenue recognised in the statement of profit and loss with the contracted price Set out below is the disaggregation of the Company’s revenue from contracts with customers: ` in Million Particulars Year ended March 31, 2019 Year ended March 31, 2018 Revenue as per contracted price 62,630.12 56,146.74 Less: Rebates, discounts, chargebacks, markdowns, etc. 3,141.22 2,210.08 Revenue from contracts with customers 59,488.90 53,936.66 4) Reconciliation of revenue from operations with revenue from contracts with customers Particulars As At March 31, 2019 As At March 31, 2018 Revenue from operations 65,266.15 60,505.75 Less: VAT/State Goods and Service Tax Incentive 1,732.45 2,249.65 Export Benefits 4,044.80 4,319.44 Revenue from contracts with customers 59,488.90 53,936.66
|945| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers 47. WIPRO LIMITED a) Significant Accounting Policies Revenue The Company derives revenue primarily from software development, maintenance of software/hardware and related services, business process services, sale of IT and other products. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To recognise revenues, the Company apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognise revenues when a performance obligation is satisfied. At contract inception, the Company assesses its promise to transfer products or services to a customer to identify separate performance obligations. The Company applies judgement to determine whether each product or services promised to a customer are capable of being distinct, and are distinct in the context of the contract, if not, the promised product or services are combined and accounted as a single performance obligation. The Company allocates the arrangement consideration to separately identifiable performance obligation based on their relative stand-alone selling price or residual method. Stand-alone selling prices are determined based on sale prices for the components when it is regularly sold separately, in cases where the Company is unable to determine the stand-alone selling price the Company uses third-party prices for similar deliverables or the company uses expected cost-plus margin approach in estimating the stand-alone selling price. For performance obligations where control is transferred over time, revenues are recognised by measuring progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the promised products or services to be provided. The method for recognising revenues and costs depends on the nature of the services rendered: Time and materials contracts Revenues and costs relating to time and materials are recognised as the related services are rendered. Fixed-price contracts I. Fixed-price development contracts Revenues from fixed-price contracts, including software development, and integration contracts, where the performance obligations are satisfied over time, are recognised using the “percentage-of-completion” method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. The cost expended (or input) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. If the Company is not able to reasonably measure the progress of completion, revenue is recognised only to the extent of costs incurred for which recoverability is probable. When total cost estimates exceed revenues in an arrangement, the estimated losses are recognised in the consolidated statement of profit and loss in the period in which such losses become probable based on the current contract estimates as an onerous contract provision. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on fixed-price development contracts and are classified as non-financial asset as the contractual right to consideration is dependent on completion of contractual milestones. A contract liability is an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer.
|946| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Unbilled revenue on other than fixed price development contracts are classified as a financial asset where the right to consideration is unconditional upon passage of time II. Maintenance contracts Revenues related to fixed-price maintenance, testing and business process services are recognised based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with value delivered, revenues are recognised as the service is performed using the percentage of completion method. When services are performed through an indefinite number of repetitive acts over a specified period, revenue is recognised on a straight-line basis over the specified period unless some other method better represents the stage of completion. In certain projects, a fixed quantum of service or output units is agreed at a fixed price for a fixed term. In such contracts, revenue is recognised with respect to the actual output achieved till date as a percentage of total contractual output. Any residual service unutilised by the customer is recognised as revenue on completion of the term. III. Volume based contracts Revenues and costs are recognised as the related services are rendered. Products Revenue on product sales are recognised when the customer obtains control of the specified asset. Others Any change in scope or price is considered as a contract modification. The Company accounts for modifications to existing contracts by assessing whether the services added are distinct and whether the pricing is at the stand-alone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the stand-alone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the stand-alone selling price. The Company accounts for variable considerations like, volume discounts, rebates and pricing incentives to customers as reduction of revenue on a systematic and rational basis over the period of the contract. The Company estimates an amount of such variable consideration using expected value method or the single most likelyamount in a range of possible consideration depending on which method better predicts the amount of consideration to which the Company may be entitled. Revenues are shown net of allowances/ returns sales tax, value added tax, goods and services tax and applicable discounts and allowances. The Company accrues the estimated cost of warranties at the time when the revenue is recognised. The accruals are based on the Company’s historical experience of material usage and service delivery costs. Incremental costs that relate directly to a contract and incurred in securing a contract with a customer are recognised as an asset when the Company expects to recover these costs and amortised over the contract term. The Company recognises contract fulfilment cost as an asset if those costs specifically relate to a contract or to an anticipated contract, the costs generate or enhance resources that will be used in satisfying performance obligations in future; and the costs are expected to be recovered. The asset so recognised is amortised on a systematic basis consistent with the transfer of goods or services to customer to which the asset relates. The Company assesses the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist.
|947| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers The Company may enter into arrangements with third party suppliers to resell products or services. In such cases, the Company evaluates whether the Company is the principal (i.e. report revenues on a gross basis) or agent (i.e. report revenues on a net basis). In doing so, the Company first evaluates whether the Company controls the good or service before it is transferred to the customer. If Company controls the good or service before it is transferred to the customer, Company is the principal; if not, the Company is the agent. Finance and other income Finance and other income comprise interest income on deposits, dividend income and gains / (losses) on disposal of investments. Interest income is recognised using the effective interest method. Dividend income is recognised when the right to receive payment is established. b) New Accounting standards adopted by the Company: Ind AS 115- Revenue from Contract with Customers On April 1, 2018, the Company adopted Ind AS 115, “Revenue from Contracts with Customers” using the cumulative catch-up transition method applied to contracts that were not completed as at April 1, 2018. In accordance with the cumulative catch-up transition method, the comparatives have not been retrospectively adjusted. The adoption of the new standard has resulted in a reduction of ` 2,279 in opening retained earnings, primarily relating to certain contract costs because these do not meet the criteria for recognition as costs to fulfil a contract. On account of adoption of Ind AS 115, unbilled revenues pertaining to fixed price development contracts of ` 15,038 as at March 31, 2019, has been considered as non-financial Contract assets, which are billable on completion of milestones specified in the contracts. Unbilled revenues ` 22,880 which are billable based on passage of time has been classified as unbilledreceivables. The adoption of Ind AS 115, did not have any material impact on the consolidated statement of profit and loss and earnings per share for year ended March 31, 2019. Contract Asset and Liabilities The Company classifies its right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. For example, the company recognises a receivable for revenues related to time and materials contracts or volume-based contracts. The Company present such receivables as part of unbilled receivables at their net estimated realisable value. Contract liabilities: During the year ended March 31, 2019, the Company recognised revenue of ` 14,570 arising from opening unearned revenue as at April 1, 2018. Contract Assets: During the year ended March 31, 2019, ` 13,558 of unbilled revenue pertaining to fixedprice development contracts (balance as at April 1, 2018: ` 17,469), has been reclassified to trade receivables on completion of milestones. Contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognised which includes unearned revenue and amounts that will be invoiced and recognised as revenue in future periods. Applying the practical expedient, the Company has not disclosed its right to consideration from customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date which are, contracts invoiced on time and material basis and volume based. As at March 31, 2019, the aggregate amount of transaction price allocated to remaining performance
|948| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts obligations, other than those meeting the exclusion criteria above, was ` 373,879 of which approximately 59% is expected to be recognised as revenues within 2 years, and the remainder thereafter. This includes contracts that can be terminated for convenience without a substantive penalty since, based on current assessment, the occurrence of the same is expected to be remote. Disaggregation of Revenues The table below presents disaggregated revenues from contracts with customers by business segment, customer location and contract-type. The Company believes that the below disaggregation best depicts the nature, amount, timing and uncertainty of revenue and cash flows from economic factors. (Amount in ` ) IT Services Products ISRE Total BFSI Health BU CBU ENU TECH MFG COMM Total A. Revenue Sale of services 173,516 73,942 88,797 72,329 76,108 46,155 32,489 563,336 - 7,965 571,301 Sales of products - - - - - - - - 14,544 - 14,544 173,516 73,942 88,797 72,329 76,108 46,155 32,489 563,336 14,544 7,965 585,845 B. Revenue by geography India 3,868 2,295 1,006 1,690 1,392 1,534 3,095 14,880 8,154 7,965 30,999 Americas 98,428 57,204 59,262 22,739 54,679 21,541 7,694 321,547 2,112 - 323,659 Europe 46,856 7,591 17,636 29,795 16,441 18,211 7,420 143,950 2,240 - 146,190 Rest of World 24,364 6,852 10,893 18,105 3,596 4,869 14,280 82,959 2,038 - 84,997 173,516 73,942 88,797 72,329 76,108 46,155 32,489 563,336 14,544 7,965 585,845 C. Revenue by nature of contract Fixed price and volume 89,378 53,462 50,425 51,799 47,055 31,843 19,847 343,809 - 6,176 349,985 based Time and materials 84,138 20,480 38,372 20,530 29,053 14,312 12,642 219,527 - 1,789 221,316 Products - - - - - - - - 14,544 - 14,544 173,516 73,942 88,797 72,329 76,108 46,155 32,489 563,336 14,544 7,965 585,845 Notes to Accounts 20. Revenue from operations Year ended March 31, 2019 March 31, 2018 Sale of Services ` 571,301 ` 524,543 Sales of Products 14,544 20,328 ` 585,845 ` 544,871 21. Other operating income Sale of hosted data center services business: During the year ended March 31, 2019, the Company has concluded the divestment of its hosted data center services business.
|949| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers The calculation of the gain on sale is shown below: Particulars Total Cash considerations (net of disposal costs ` 660) ` 25,432 Less: Carrying amount of net assets disposed (including goodwill of ` 13,009) Add: Reclassification of exchange difference on foreign currency translation (26,455) Gain on sale ` 3,108 In accordance with the sale agreement, total cash consideration is ` 28,124 and the Company paid ` 3,766 to subscribe for units issued by the buyer. Units amounting to ` 2,032 are callable by the buyer if certain business targets committed by the Company are not met over a period of three years. The fair value of these callable units is estimated to be insignificant as at reporting date. Consequently, the sale consideration accounted of ` 24,358 and units amounting to ` 1,734 units issued by the buyer. Loss of control in subsidiary: During the year ended March 31, 2019, the Company has reduced its equity holding from 74% to 11% in Wipro Airport IT Services Limited. The loss/ gain on this transaction is insignificant. The assets and liabilities associated with these transactions were classified as assets held for sale and liabilities directly associated with assets held for sale amounting to ` 27,201 and ` 6,212 respectively as at March 31, 2018. Sale of Workday and Cornerstone OnDemand business: During the year ended March 31, 2019, the Company has concluded the Sale of Workday and Cornerstone OnDemand business except in Portugal, France and Sweden. The calculation of the gain is as shown below: Particulars Total Cash considerations ` 6,645 Less: Carrying amount of net assets disposed (includes goodwill of ` 4,893 and intangible assets of ` 740) 5,475 Add: Reclassification of exchange difference on foreign currency translation 79 Gain on sale ` 1,249 Assets pertaining to Portugal, France and Sweden are classified as Assets held for sale amounting to ` 240 as at March 31, 2019, which was concluded on May 31, 2019. These disposal groups do not constitute a major component of the Company and hence were not classified as discontinued operations. 48. ZOMATO MEDIA PRIVATE LIMITED Revenue recognition The Group generates revenue from advertisings, subscriptions, online ordering transactions and other services. Revenue is recognized to depict the transfer of control of promised goods or services to customers upon the satisfaction of performance obligation under the contract in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Consideration includes goods or services contributed by the customer, as non-cash consideration, over which Group has control. The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note 22 and 32. Where performance obligation is satisfied over time, Group recognizes revenue using input/ output method based on performance completion till reporting date. Where performance obligation is satisfied at a point
|950| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts in time, Group recognizes revenue when customer obtains control of promised goods and services in the contract. Revenue is recognized net of any taxes collected from customers, which are remitted to governmental authorities. Advertisement revenue Advertising revenue is derived principally from the sale of online advertisements based on “clicks” (which are generated each time users on our platforms click through our advertisements to an advertiser’s designated website) delivered to advertisers. Group uses the output method and recognize advertising revenue on the basis of number of clicks. Subscription revenue Revenues from subscription contracts are recognized over the subscription period in accordance with terms of agreement entered into with customer. Online Ordering Revenues from Online Ordering are recognized in the form of commission income upon fulfilment of performance obligation in accordance with the terms of agreement entered into with customers. Incentives The company provides various types of incentives to transacting users including credits and direct payment discounts to promote the traffic on its site. The major accounting policy for incentives is described as follows: Delivery services Since the Group identified the transacting users as one of its’ customers for delivery services when the Group is responsible for the delivery services, the incentives offered to transacting users are considered as payment to customers and recorded as reduction of revenue on a transaction by transaction basis. The amount of incentive in excess of the revenue earned from the transacting users is recorded as Advertisement and sales promotion expenses. When incentives are provided to transacting users where the Group is not responsible for delivery, the transacting users are not considered customers of the Group, and such incentives are recorded as Advertisement and sales promotion expenses. Contract balances Contract assets A contract asset is the right to consideration in exchange for services transferred to the customer (which consist of unbilled revenue). If the Group 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 Group’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 financial instruments – initial recognition and subsequent measurement. Contract liabilities A contract liability is the obligation to transfer services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group 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 Group performs under the contract.
|951| Chap. 33 – Ind AS 115 – Revenue from Contracts with Customers Disclosure 22. Revenue from operations 31-Mar-19 (` Mn) 31-Mar-18 (` Mn) Sale of services Revenue from Services 12,962.90 4,652.98 Royalty income 0.1010.65 0.10 10.65 Other Operating Revenue Income from provision of platform and food delivery services 162.86 13,125.86 4,663.63 Impact of application of Ind AS 115 Revenue from Contracts with Customers The Group has adopted Ind AS 115 on Revenue from Contracts with Customers, using the modified retrospective approach. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and comparative information is not restated in the statement of profit and loss. The adoption of the standard did not have any material impact on the recognition and measurement of revenue and related items in the financial statements/results. Timing of rendering of services March 31, 2019 Revenue from Services Royalty Income Others Total Services rendered at a point in time 8,966.33 - 162.86 9,129.19 Services rendered over time 3,996.57 0.10 3,996.67 Total Revenue from Contract with customers 12,962.90 0.10 162.86 13,125.86 Contract Balances The following table provides information about receivables, contracts assets, and contract liabilities from contracts with customers. Particulars 31-Mar-19 31-Mar-18 Trade Receivables (Unconditional right to consideration) 703.37 260.84 Contract assets (Refer note 1 below) 3.77 3.87 Contract liabilities (Refer note 2 below) 1,968.71 400 Notes: 1. The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to the receivables when the rights become unconditional. 2. Contract liability relates to payments received in advance of performance and deferred sales revenue against which amount has been received from customer but services are yet to be rendered on the reporting date either in full or in parts. Contract liabilities are recognized evenly over the period of service, being performance obligation of the Group. The allowance for doubtful accounts as of March 31, 2019, and changes in the allowance for doubtful accounts during the 12 months ended on March 31, 2019, were as follows: Particulars 31-Mar-19 31-Mar-18 Opening balance 96.68 35.12 Add: Bad Debt expenses 107.86 71.38 Less: write offs, net of recoveries -27.57 -9.82
|952| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Particulars 31-Mar-19 31-Mar-18 Closing balance 176.97 96.68 Contract liabilities consist of deferred revenue, which is recorded when the company has received consideration in advance of transferring the performance obligations under the contract to the customer. Changes in deferred revenue during the years ended March 31, 2019 were as follows: Particulars 31-Mar-19 31-Mar-18 Opening ba1ance 308.25 201.82 Add: Revenue deferred 1,497.66 308.25 Less: Revenue recognized 303.32 189.98 Less : Cumulative catch-up adjustments to revenue due to a contract modification or foreign exchange difference 4.93 11.84 Closing balance 1497.66 308.25 The following table shows the estimated revenue from deferred revenue included in our contract liability balances expected to be recognized in future period: Particulars 31-Mar-19 To be recognised in Financial Year 2019-20 1,008.06 To be recognised in Financial Year 2020-21 237.56 To be recognised in Financial Year 2021-2022 and after 252.04 Closing Balance 1497.66 ll
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