Accounting Policies of DB Corp Ltd. Company
Mar 31, 2023
1. Nature of operations:
D. B. Corp Limited (the âCompanyâ) is in the business of publishing newspapers, radio broadcasting, digital platform for news and event management. The Company is a public limited company domiciled in India. The major brands in publishing business are âDainik Bhaskarâ (Hindi daily), âDivya Bhaskarâ and âSaurashtra Samacharâ (Gujarati dailies), âDivya Marathiâ (Marathi daily) and monthly magazines such as âAha Zindagiâ, âBal Bhaskarâ, etc. Digital business includes mobile applications and websites of dainikbhaskar.com, divyabhaskar.com, dailybhaskar.com, divyamarathi. com and homeonline.com. Presently, the Companyâs radio station is on air in 30 cities under the brand name âMy FMâ. The frequency allotted to the Companyâs radio station is 94.3.
The Company derives its revenue mainly from the sale of its publications and advertisements published in the publications, displayed on websites/portal and aired on radio.
2. Summary of significant accounting policies2.1 Basis of accounting and preparation
The Standalone Financial Statements (hereinafter refer to as "Standalone Financial Statementsâ or "Financial Statementsâ) comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The Standalone Financial Statements are prepared on a going concern basis. The Standalone Financial Statements have been prepared under the historical cost basis except for derivative financial instruments and certain other financial assets and liabilities that have been measured at fair value.
New and amended standards adopted by the Company
The Ministry of Corporate Affairs had vide notification dated March 23, 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective April 1, 2022. These amendments did not have any impact on the amounts recognised in prior periods and are not significantly affect the current or future periods.
New and amended standards issued but not effective
The Ministry of Corporate Affairs has vide notification dated March 31, 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the âRulesâ) which amends certain accounting standards, and are effective April 1, 2023.
The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.
These amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions. Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12 as the Companyâs accounting policy already complies with the now mandatory treatment.
Current v/s non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified period of twelve months as its operating cycle.
2.2 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Historical costs include expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Costs of construction that relate directly to the specific asset and cost that are attributable to the construction activity in general and can be allocated to the specific assets are capitalised. Income earned during the construction period and income from trial runs is deducted from such expenditure pending allocation.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
In respect of its interests in jointly controlled assets, the Company recognises its share of the jointly controlled assets in its standalone financial statements, classifying the jointly controlled asset as per its nature.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a productâs technical feasibility and other criteria set out in Ind AS 38 - âIntangible assetsâ have been established, in which case such expenditure is capitalised.
Costs associated with maintaining software programmes are recognised as and when expenses are incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
Property that is held for capital appreciation and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.
2.5 Depreciation and amortization
The Company provides depreciation on property, plant and equipment, investment properties and intangible
assets using the straight line method based on the management estimated useful lives of the assets which are as prescribed under the Part C of Schedule II to the Act in order to reflect the actual usage of the assets, except in case of Solar Power Plant, where useful life is based on technical evaluation done by the Management taking into account the nature of the assets, their estimated period of use and the operating conditions, as useful life of Solar Power Plant is not expressly defined under the Schedule II to the Companies Act, 2013. The residual values are not more than 5% of the original cost of the assets.
Company provides amortisation of intangible asset using the straight-line method based on the management estimated useful lives of the assets.
Depreciation/ amortisation is calculated using the straight-line method to allocate the cost of the assets, net of their residual values, over their estimated useful lives as follows:
|
Category |
Useful lives (in years) |
|
Investment Properties - Building |
60 |
|
Factory buildings |
30 |
|
Office and residential buildings |
60 |
|
Plant and machineries |
15 |
|
Solar Power Plant |
22 |
|
Office equipment |
5 |
|
Vehicles |
8 |
|
Furniture and fixtures |
10 |
|
Electric Fittings, Fans and Coolers |
10 |
|
Computers and servers |
3 and 6 |
|
One time license fees for radio stations |
Over the license period i.e. 15 years |
|
Computer software including ERP |
6 |
Leasehold improvements are depreciated over the shorter of their useful life or the lease term, unless the entity expects to use the assets beyond the lease term.
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated recoverable amount.
2.6 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset/ cash generating unit is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separate identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generated units). Non- financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Provision for advance against the properties is made considering the delay in the receipt of the properties, progress of the construction work and fair value of the properties. The impairment loss is assessed at each reporting period including all assumptions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
¦ fixed payments (including in-substance fixed payments), less any lease incentives receivable, if any,
¦ variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
¦ amounts expected to be payable by the Company under residual value guarantees
Right-of-use assets are measured at cost comprising the following:
¦ the amount of the initial measurement of lease liability
¦ any lease payments made at or before the commencement date less any lease incentives received
¦ any initial direct costs, and
¦ restoration costs, if any.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are generally depreciated over the shorter of the assetâs useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying assetâs useful life.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included in the balance sheet based on their nature.
2.8 Inventories
Inventories are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis. Cost of purchased inventory is determined after deducting rebates and discounts.
Cost of raw material, stores and spares and gift/ promotional products comprises of Cost of purchases and also includes all other costs incurred in bringing the inventories to their present location and condition.
The cost of finished goods (magazines and books) includes raw materials, direct labour, other direct costs and related production overheads.
¦ the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
¦ payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lesseeâs incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company:
⢠where possible, uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by Company, which does not have recent third-party financing, and
⢠makes adjustments specific to the lease, e.g. term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
⢠The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
⢠A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
Revenue is recognized either at a point in time or over time, when (or as) the company satisfies performance obligations by transferring the promised goods or services to its customers. Revenue towards satisfaction of a performance obligation is measured at amount of transaction price allocated to that performance obligation. The Company considers terms of the contracts in determining the transaction price. The transaction price of goods sold or services rendered is net of variable consideration on account of various discounts, rebates and schemes etc. Transaction price excludes taxes and duties collected on behalf of the government.
The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the related goods or services and the Company is under an obligation to provide only the goods or services under the contract. Contract liabilities are recognised as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services to the customer).
The Company recognises unearned revenue (i.e. contract liabilities) for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the Balance Sheet. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognises as unbilled revenue (i.e. contract assets) in its Balance Sheet, depending on whether something other than the passage of time is required before the consideration is due.
The Company does not have any contract where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence the Company does not adjust any of the transaction price for the time value of money.
The specific recognition criteria described below must also be met before revenue is recognised:
Revenue is recognised as and when advertisement is published in newspaper / aired on radio / displayed on website in accordance with the terms of the contract with customer.
Revenue from barter transactions involving exchange of advertisements with non-monetary assets is recognised at the time of actual performance of the contract to the extent of performance completed by either party against its part of contract and is measured at fair value of such non-monetary assets received / to be received or fair value in reference to non-barter transactions.
The receivable relating to property barter agreements is grouped as advance for Investment properties and included under the head âOther assetsâ.
Sale of newspapers, magazines, wastage and scrap
Revenue from sale of newspaper (net of credits for unsold copies) and publications are recognized, when control of the goods is transferred.
Revenue from the sale of waste papers/scrap is recognised when the control is transferred to the buyer, usually on delivery of the waste papers/scrap.
Revenue from printing job work is recognised as and when the Company satisfies its performance obligations as per terms of agreement with the Customer.
Revenue from event management is recognised when the event management services are rendered as per the terms of agreement.
Interest income from debt instruments is recognised using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply with all attached conditions. Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current other liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
2.11 Foreign currency transactionsFunctional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The Standalone Financial Statements are presented in Indian rupee (''), which is Companyâs functional and presentation currency.
Foreign currency transactions are translated into the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the
reporting date are translated to the functional currency at the exchange rate prevailing on that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rate are generally recongised in profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within Foreign exchange gain/loss (net).
2.12 Employee benefitsi. Short term obligation
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
ii. Other long-term employee benefit obligationsCompensated Absences
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
iii. Post employment obligationsa) Defined contribution plans
A defined contribution plan is a post-employment plan under which an entity pays fixed contributions and will have no legal or constructive obligation to pay further amounts.
The Company contributes to Provident Fund, Employeeâs State Insurance Fund and Employees Deposit Linked Insurance scheme and has no further obligation beyond making its contribution. The Companyâs contributions to the above funds are charged to the Standalone Statement of Profit and Loss.
Other contribution plan is an employeeâs contingency benefit plan ("Dainik Bhaskar Karamchari Aapat Nidhiâ) under which an entity pays fixed contributions and will have no legal or constructive obligation to pay further amounts. The Companyâs contributions to the above funds are charged to the Standalone Statement of Profit and Loss.
c) Defined benefit plans Gratuity
The Company provide for gratuity, a defined benefit plan (the "Gratuity Planâ) covering eligible employees. The Company makes contributions to a trust administered and managed by insurance companies to fund the gratuity liabilities. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the respective employeesâ salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuary using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax liabilities are measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
The carrying amount of deferred tax assets are reviewed at the end of each reporting period and are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement, if any.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.
Where there is a possible obligation or a present obligation and the likelihood of the outflow of the resources is remote, no provision or disclosure for contingent liability is required.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. These exchange differences are presented in finance cost to the extent which the exchange loss does not exceed the difference between the cost of borrowing in functional currency when compared to the cost of borrowing in a foreign currency.
2.17 Earnings per equity share (âEPSâ)
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after income tax effect of interest and other financing costs associated with dilutive potential equity shares
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares
2.18 Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Companyâs unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
2.20 Employee stock compensation cost
Share-based compensation benefits are provided to employees via the DB Corp Ltd Employee stock Compensation Plan. The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using Black and Scholes valuation model. The fair value of options granted is recognised as an employee benefit expenses with a corresponding increase in equity.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of options that are expected to vest based on the nonmarket vesting and service conditions. It recognises the impact of revision to original estimates, if any, in the profit or loss, with a corresponding adjustment to equity.
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the
end of the reporting period. The mutual funds are valued using the closing NAV. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial investments.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
At initial recognition, the Company measures a financial asset (excluding trade receivables which do not contain a significant financing component) at its fair value
plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
For purposes of subsequent measurement, financial assets are classified in three categories:
⢠Financial instruments at amortised cost
⢠Derivatives and equity instruments at Fair Value through Profit or Loss (âFVTPLâ)
⢠Equity instruments measured at Fair value through Other Comprehensive Income (âFVTOCIâ)
Financial instruments at amortised cost
A âfinancial instrumentâ is measured at the amortised cost using the effective interest rate (âEIRâ) method if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (âSPPIâ) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (âEIRâ) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade receivables, deposits and loans.
Derivative financial instruments
The Company uses forward currency contracts, to hedge its foreign currency risks. Such forward currency contracts are initially recognised at fair value on the date on which a forward currency contracts is entered into and as at balance sheet date any gains or losses arising
from changes in the fair value of derivatives are taken directly to statement of profit and loss.
Equity Investment in Subsidiary
Equity investments in subsidiary are measured at historical cost.
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets
carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 44 details how the Company determines whether there has been a significant increase in credit risk.
The Company measures the loss allowance for trade receivables by applying the simplified approach at an amount equal to life-time expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used practical expedient as permitted under Ind AS -109 âFinancial instruments. This expected credit loss allowance is computed based on provision matrix which takes into account historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.
Financial liabilitiesInitial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or at amortised cost, as appropriate.
All financial liabilities are recognised initially at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another liability from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.24 Investment in Subsidiaries
The equity investments in subsidiary is carried in the standalone financial statements at historical cost except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for as Non-current assets held for sale and discontinued operations.
Investments in subsidiary carried at cost and are tested for impairment in accordance with Ind AS 36 Impairment of Assets.
Exceptional items include income or expenses that are considered to be part of ordinary activities, however, are of such significance and nature that separate disclosure enables the user of the financial statements to understand the impact in a more meaningful manner. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial performance of the Company.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest million as per the requirement of Schedule III, unless otherwise stated.
3. Significant accounting judgments, estimates and assumptions:
The preparation of the Standalone Financial Statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The areas involving critical estimates and judgements are:
(i) Impairment of trade receivables (Refer Note 14)
(ii) Impairment for investment properties and advance for properties (Refer Note 5 and 11(b))
(iii) Estimation of defined benefit obligations (Refer Note 39)
(iv) Estimated fair value of unquoted securities (Refer Note 8)
(v) Estimation of current tax expense and current tax payable (Refer Note 23)
(vi) Estimation of provisions and contingent liabilities (Refer Note 37)
Mar 31, 2021
1. Nature of operations :
D. B. Corp Limited (the âCompanyâ) is in the business of publishing newspapers, radio broadcasting, providing integrated internet and mobile interactive services and event management. The Company is a public limited company domiciled in India and was incorporated under the provisions of the Companies Act, 1956. The major brands in publishing business are âDainik Bhaskarâ (Hindi daily), âDivya Bhaskarâ and âSaurashtra Samacharâ (Gujarati dailies), âDivya Marathiâ (Marathi daily) and monthly magazines such as âAha Zindagiâ, âBal Bhaskarâ, etc.Internet business includes the websites of dainikbhaskar.com, divyabhaskar.com, dailybhaskar.com, divyamarathi.com and homeonline. com. Presently, the Companyâs radio station is on air in 30 cities under the brand name âMy FMâ. The frequency allotted to the Companyâs radio station is 94.3.
The Company derives its revenue mainly from the sale of its publications and advertisements published in the publications, displayed on websites/ portal, and aired on radio.
2. Summary of significant accounting policies2.1 Basis of accounting and preparation
The standalone financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The financial statements are prepared on a going concern basis. These are presented in INR and all values are rounded to the nearest million '' (000,000) except when otherwise indicated. The standalone financial statements have been prepared under the historical cost basis except for derivative financial instruments and certain other financial assets and liabilities that have been measured at fair value.
New and amended standards adopted by the Company
The Company has applied the following amendments to Ind AS for the first time for their annual reporting period commencing April 1,2020:
⢠Definition of Material - amendments to Ind AS 1 and Ind AS 8
⢠COVID-19 related concessions - amendments to Ind AS 116
⢠Interest Rate Benchmark Reform - Amendments to Ind AS 107, Ind AS 109 and Ind AS 39
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
Recent Accounting Pronouncement
On March 24, 2021, the Ministry of Corporate Affairs (âMCAâ) through a notification, amended Schedule III of the Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from April 1, 2021. Key amendments relating to Division II which relate to Companies whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are:
⢠Lease liabilities to be separately disclosed under the head âfinancial liabilitiesâ, duly distinguished as current or non-current.
⢠Details of all the immovable properties whose title deeds are not held in the name of the Company.
⢠Certain additional disclosures in the Statement of Changes in Equity such as changes in Equity due to prior period errors and restated balances at the beginning of the current reporting period.
⢠Specified format for disclosure of shareholding of promoters.
⢠Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under development. Completion schedule for capital work-in-progress and intangible asset under development.
⢠If a company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then disclosure of details of where it has been used.
⢠Specific disclosure under âadditional regulatory requirementâ such as compliance with approved schemes of arrangements, compliance with number of layers of companies, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc.
⢠Disclosure of Ratios: Current ratio, Debt-Equity ratio, Debt service coverage ratio, Return on equity ratio, Inventory turnover ratio, Trade receivables turnover ratio, Trade payables turnover ratio, Net capital turnover ratio, Net profit ratio, Return on Capital employed and Return on investment.
⢠Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency specified under the head âadditional informationâ in the notes forming part of the financial statements.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified period of twelve months as its operating cycle.
2.2 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Historical costs include expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Costs of construction that relate directly to the specific asset and cost that are attributable to the construction activity in general and can be allocated to the specific assets are capitalised. Income earned during the construction period and income from trial runs is deducted from such expenditure pending allocation.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
In respect of its interests in jointly controlled assets, the Company recognises its share of the jointly controlled assets in its standalone financial statements, classifying the jointly controlled asset as per its nature.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a productâs technical feasibility and other criteria set out in Ind AS 38 - âIntangible assetsâ have been established, in which case such expenditure is capitalised.
Costs associated with maintaining software programmes are recognised as and when expenses are incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
Investment properties held to earn rentals or for capital appreciation or both are stated in the balance sheet at cost, less accumulated depreciation and accumulated impairment losses if any. Subsequent expenditure is capitalised to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. Any gain or loss on disposal of investment property is determined as the difference between net disposal proceeds and the carrying amount of the property and is recognized in the statement of profit and loss. Transfer to, or from, investment property is done at the carrying amount of the property.
2.5 Depreciation and amortisation
The Company provides depreciation on property, plant and equipment, investment properties using the straight line method based on the management estimated useful lives of the assets as prescribed under the Part C of Schedule II to the Act, except in case of Solar Power Plant, where useful life is based on technical evaluation done by the Management taking into account the nature of the assets, their estimated period of use and the operating conditions, as useful life of Solar Power Plant is not expressly defined under the Schedule II to the Companies Act, 2013.
Company provides amortisation of intangible asset using the straight line method based on the management estimated useful lives of the assets.
Depreciation/ amortisation is calculated using the straight-line method to allocate the cost of the assets,
net of their residual values, over their estimated useful lives as follows:
|
Category |
Useful lives (in years) |
|
Investment Properties - Building |
60 |
|
Factory buildings |
30 to 60 |
|
Office and residential buildings |
60 |
|
Plant and machineries |
15 |
|
Solar Power Plant |
22 |
|
Office equipment |
5 |
|
Vehicles |
8 |
|
Furniture and fixtures |
10 |
|
Electric Fittings, Fans and Coolers |
10 |
|
Computers and servers |
3 and 6 |
|
One time license fees for radio stations |
Over the license period i.e. 15 years |
|
Computer software including ERP |
6 |
Leasehold improvements are depreciated over the shorter of their useful life or the lease term, unless the entity expects to use the assets beyond the lease term.
The assetsâ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated recoverable amount.
2.6 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset/ cash generating unit is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separate identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generated units). Non- financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Provision for advance against the properties is made considering the delay in the receipt of the properties,
progress of the construction work and fair value of the properties. The impairment loss is assessed at each reporting period including all assumptions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
⢠fixed payments (including in-substance fixed payments), less any lease incentives receivable, if any,
⢠variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
⢠amounts expected to be payable by the Company under residual value guarantees
⢠the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
⢠payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lesseeâs incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company:
⢠where possible, uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by Company, which does not have recent third party financing, and
⢠makes adjustments specific to the lease, e.g. term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
⢠The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
⢠A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
Right-of-use assets are measured at cost comprising the following:
⢠the amount of the initial measurement of lease liability
⢠any lease payments made at or before the commencement date less any lease incentives received
⢠any initial direct costs, and
⢠restoration costs, if any.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are generally depreciated over the shorter of the assetâs useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying assetâs useful life.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included in the balance sheet based on their nature.
Inventories are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.
Cost of raw material, stores and spares and gift/ promotional products comprises of Cost of purchases and also includes all other costs incurred in bringing the inventories to their present location and condition. The cost of finished goods includes raw materials, direct labour, other direct costs and related production overheads.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates, goods and service tax (GST) and amounts collected on behalf of third parties.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the entity and specific criteria have been met for each of the Companyâs activities as described below. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
The specific recognition criteria described below must also be met before revenue is recognised.
Revenue is recognised as and when advertisement is published in newspaper / aired on radio / displayed on website in accordance with the terms of the contract with customer.
Revenue from barter transactions involving exchange of advertisements with non-monetary assets is measured at fair value of such non-monetary assets received.
The receivable relating to property barter agreements is grouped as advance for properties and included under the head âOther assetsâ.
Sale of newspapers, magazines, wastage and scrap
Revenue is recognised when control of the goods transferred, being when the goods are delivered to customer.
Revenue from printing job work is recognised on the completion of job work as per terms of the agreement with the customer.
Revenue from event management is recognised as and when the event management services are rendered as per the terms of agreement.
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an income, it is recognised in profit and loss on a systematic basis over the periods necessary to match them with the related costs, for which it is intended to compensate and presented within other income.
2.11 Foreign currency transactions Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The standalone financial statements are presented in Indian rupee (''), which is Companyâs functional and presentation currency.
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate prevailing on that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rate are generally recongised in profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within Foreign exchange loss (net).
i) Short term obligation
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company
has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
ii) Other long-term employee benefit obligations Compensated Absences
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
iii) Post employment obligations
a) Defined contribution plans
A defined contribution plan is a postemployment plan under which an entity pays fixed contributions and will have no legal or constructive obligation to pay further amounts.
The Company contributes to Provident Fund, Employeeâs State Insurance Fund and Employees Deposit Linked Insurance scheme and has no further obligation beyond making its contribution. The Companyâs contributions to the above funds are charged to the Standalone Statement of Profit and Loss.
A other contribution plan is a employeeâs contingency benefit plan (âDainik Bhaskar Karamchari Aapat Nidhiâ) under which an entity pays fixed contributions and will have no legal or constructive obligation
to pay further amounts. The Companyâs contributions to the above funds are charged to the Standalone Statement of Profit and Loss.
c) Defined benefit plans Gratuity
The Company provide for gratuity, a defined benefit plan (the âGratuity Planâ) covering eligible employees. The Company makes contributions to a trust administered and managed by insurance companies to fund the gratuity liabilities. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeesâ salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuary using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Income tax expense comprises current and deferred tax. It is recognised in statement of profit or loss except to the extent that it relates items recognised directly in equity or in other comprehensive income (âOCIâ).
Current income tax liabilities are measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
The carrying amount of deferred tax assets are reviewed at the end of each reporting period and are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement, if any.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.
Where there is a possible obligation or a present obligation and the likelihood of the outflow of the resources is remote, no provision or disclosure for contingent liability is required.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. These exchange difference are presented in finance cost to the extent which the exchange loss does not exceed the difference between the cost of borrowing
in functional currency when compared to the cost of borrowing in a foreign currency.
2.17 Earnings per equity share (âEPSâ)
Basic âEPSâ amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted âEPSâ amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
2.18 Cash and cash equivalents
Cash and cash equivalent in the balance sheet and cash flow statement comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
2.19 Employee stock compensation cost
Share-based compensation benefits are provided to employees via the DB Corp Ltd Employee stock Compensation Plan. The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using Black and Scholes valuation model. The fair value of options granted is recognised as an employee benefit expenses with a corresponding increase in equity.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of options that are expected to vest based on the nonmarket vesting and service conditions. It recognises the impact of revision to original estimates, if any, in the profit or loss, with a corresponding adjustment to equity.
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial investments.
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For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets.
For purposes of subsequent measurement, financial assets are classified in three categories:
⢠Financial instruments at amortised cost
⢠Derivatives and equity instruments at Fair Value through Profit or Loss (âFVTPLâ)
⢠Equity instruments measured at Fair value through Other Comprehensive Income (âFVTOCIâ)
Financial instruments at amortised cost
A âfinancial instrumentâ is measured at the amortised cost using the effective interest rate (âEIRâ) method if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (âSPPIâ) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (âEIRâ) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade receivables, deposits and loans.
Derivative financial instruments
The Company uses forward currency contracts, to hedge its foreign currency risks. Such forward currency contracts are initially recognised at fair value on the date on which a forward currency contracts is entered into and as at balance sheet date any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss.
Equity Investment in Subsidiary
Equity investments in subsidiary are measured at historical cost.
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset and either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (âECLâ) model for measurement and recognition of impairment loss on the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL at each reporting date, right from its initial recognition. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head âother expensesâ in the standalone statement of profit and loss.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analysed.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or at amortised cost, as appropriate.
All financial liabilities are recognised initially at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another liability from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.23 Investment in Subsidiaries
The equity investments in subsidiary is carried in the financial statements at historical cost except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for as Non-current assets held for sale and discontinued operations.
Investments in subsidiary carried at cost and are tested for impairment in accordance with Ind AS 36 Impairment of Assets.
Exceptional items include income or expenses that are considered to be part of ordinary activities, however are of such significance and nature that separate disclosure enables the user of the financial statements to understand the impact in a more meaningful manner. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial performance of the Company.
3 Significant accounting judgments, estimates and assumptions:
The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The areas involving critical estimates and judgements are:
(i) Impairment of trade receivables (Refer Note 12)
(ii) Impairment for Investment Properties and advance for properties (Refer notes 5 and 10 (b))
Mar 31, 2018
1.1 Basis of accounting and preparation
The standalone financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The financial statements are prepared on a going concern basis. These are presented in INR and all values are rounded to the nearest million â (000,000) except when otherwise indicated. The financial statements have been prepared under the historical cost basis except for derivative financial instruments and certain other financial assets and liabilities that have been measured at fair value.
Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified period of twelve months as its operating cycle.
1.2 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Historical costs include expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Costs of construction that relate directly to the specific asset and cost that are attributable to the construction activity in general and can be allocated to the specific assets are capitalised. Income earned during the construction period and income from trial runs is deducted from such expenditure pending allocation.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
In respect of its interests in jointly controlled assets, the Company recognises its share of the jointly controlled assets in its financial statements, classifying the jointly controlled asset as per its nature.
1.3 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a productâs technical feasibility and other criteria set out in Ind AS 38 - âIntangible assetsâ have been established, in which case such expenditure is capitalised.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
1.4 Investment property
Property that is held for long term rental yield or for capital appreciation or both and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repair and maintenance are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
1.5 Depreciation and amortisation
The Company provides depreciation on property, plant and equipment, investment properties using the straight line method at the rates computed based on the estimated useful lives of the assets as estimated by the management which are equal to the corresponding rates prescribed in Schedule II to the Act. Further, Company provides amortisation of intangible asset using the straight line method at the rates computed based on the estimated useful lives of the assets as estimated by the management.
The Company has used the following lives to provide depreciation and amortisation:
The residual values, useful lives and methods of depreciation and amortisation of property, plant and equipment and intangible assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
1.6 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset/cash generating unit is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separate identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generated units). Non- financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
1.7 Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Where the Company is the lessee
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
As a Lessee, lease in which significant portion of risks and rewards of ownership are not transferred to the Company are classified as operating lease. Payments made under operating leases are charged to Statement of Profit and Loss on a straight-line basis over the lease term unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
Where the Company is the lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease unless the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
1.8 Inventories
Raw materials (Newsprint and stores and spares) and finished goods (magazines) are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
1.9 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates, value added taxes, goods and service tax (GST) and amounts collected on behalf of third parties.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Companyâs activities as described below. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
The specific recognition criteria described below must also be met before revenue is recognised.
Advertisement revenue
Revenue is recognised as and when advertisement is published in newspaper / aired on radio / displayed on website in accordance with the terms of the contract with customer.
Sale of newspapers, magazines, wastage and scrap
Revenue is recognised when all the significant risks and rewards of ownership have passed on to the buyer, usually on delivery of the goods.
Printing job charges
Revenue from printing job work is recognised on the completion of job work as per terms of the agreement with the customer.
Income from event management
Revenue from event management is recognised as and when the event management services are rendered as per the terms of agreement.
Interest
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividend income
Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
1.10 Barter transactions
Revenue from barter transactions involving exchange of advertisements with non-monetary assets is measured at fair value of such nonmonetary assets received.
The receivable relating to property barter agreements is grouped as advance for properties and included under the head âOther assetsâ.
1.11 Foreign currency transactions
Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The standalone financial statements are presented in Indian rupee (â), which is Companyâs functional and presentation currency.
Transactions and balances
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate prevailing on that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rate are generally recognised in profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within Foreign exchange loss (net).
1.12 Employee benefits
i) Short term obligation
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Termination benefits are recognised as an expense as and when incurred.
ii) Other long-term employee benefit obligations
Compensated Absences
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
iii) Post employment obligations
a) Defined contribution plans
A defined contribution plan is a postemployment plan under which an entity pays fixed contributions and will have no legal or constructive obligation to pay further amounts.
The Company contributes to Provident Fund, Employeeâs State Insurance Fund and Employees Deposit Linked Insurance scheme and has no further obligation beyond making its contribution. The Companyâs contributions to the above funds are charged to the Statement of Profit and Loss.
b) Defined benefit plans Gratuity
The Company provide for gratuity, a defined benefit plan (the âGratuity Planâ) covering eligible employees. The Company makes contributions to a trust administered and managed by insurance companies to fund the gratuity liabilities. The Gratuity Plan provides a lump sum payment of vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeesâ salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuary using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
1.13 Income taxes
Income tax expense comprises current and deferred tax. It is recognised in statement of profit or loss except to the extent that it relates items recognised directly in equity or in other comprehensive income.
Current income tax
Current income tax liabilities are measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in OCI or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
The carrying amount of deferred tax assets are reviewed at the end of each reporting period and are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
1.14 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement, if any.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
1.15 Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.
Where there is a possible obligation or a present obligation and the likelihood of the outflow of the resources is remote, no provision or disclosure for contingent liability is required.
1.16 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. These exchange difference are presented in finance cost to the extent which the exchange loss does not exceed the difference between the cost of borrowing in functional currency when compared to the cost of borrowing in a foreign currency.
1.17 Earnings per equity share (âEPSâ)
Basic âEPSâ amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted âEPSâ amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
1.18 Cash and cash equivalents
Cash and cash equivalent in the balance sheet and cash flow statement comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
1.19 Employee stock compensation cost
Share-based compensation benefits are provided to employees via the DB Corp Ltd Employee stock compensation Plan. The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using Black and Scholes valuation model. The fair value of options granted is recognised as an employee benefit expenses with a corresponding increase in equity.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of revision to original estimates, if any, in the profit or loss, with a corresponding adjustment to equity.
1.20 Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- I n the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
1.21 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets.
Subsequent measurement Financial assets at amortised cost
For purposes of subsequent measurement, financial assets are classified in three categories:
- Debt instruments at amortised cost
- Derivatives and equity instruments at Fair Value Through Profit or Loss (âFVTPLâ)
- Equity instruments measured at FVTOCI
Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost using the effective interest rate (âEIRâ) method if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (âSPPIâ) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (âEIRâ) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade receivables, deposits and advances.
Derivative financial instruments
The Company uses forward currency contracts, to hedge its foreign currency risks. Such forward currency contracts are initially recognised at fair value on the date on which a forward currency contracts is entered into and as at balance sheet date any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss.
Equity Investment in Subsidiary
Equity investments in subsidiary are measured at historical cost.
Other Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (âECLâ) model for measurement and recognition of impairment loss on the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL at each reporting date, right from its initial recognition. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head âother expensesâ in the statement of profit and loss.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analysed.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives financial instruments, as appropriate.
All financial liabilities are recognised initially at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
1.22 Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Mar 31, 2017
1. NATURE OF OPERATIONS
D. B. Corp Limited (âthe Companyâ) is in the business of publishing newspapers, radio broadcasting, providing integrated internet and mobile interactive services and event management. The Company is a public limited company domiciled in India and was incorporated under the provisions of the Companies Act, 1956. The major brands in publishing business are âDainik Bhaskarâ (Hindi daily), âDivya Bhaskarâ and âSaurashtra Samacharâ (Gujarati dailies), âDivya Marathiâ (Marathi daily),and âDB Postâ (English daily), and monthly magazines such as âAha Zindagiâ, âBal Bhaskarâ, etc. Presently, the Companyâs radio station is on air in 30 cities under the brand name âMy FMâ. The frequency allotted to the Companyâs radio station is 94.3. Internet business includes the websites dainikbhaskar.com, divyabhaskar.com, dailybhaskar. com, divyamarathi.com, and homeonline.com.
The Company derives its revenue mainly from the sale of its publications and advertisements published in the publications, aired on radio, displayed on websites and portal and mobile interactive services.
The financial statements comprise the financial statements of the Company for the year ended March 31, 2017. The Companyâs registered office is at Plot No.280, Sarkhej-Gandhinagar Highway, Near YMCA Club, Makarba, Ahmedabad, Gujarat, India.
The financial statements for the year ended March 31, 2017 has been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on May 18, 2017.
2. SIGNIFICANTACCOUNTING POLICIES
2.1 Basis of accounting and preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 under the provision of the Companies Act, 2013 (the âActâ) and subsequent amendments thereof.
For all periods up to and including the year ended March 31 ,2016, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended
March 31, 2017 are the first, Ind AS financial statements that the Company has prepared in accordance with Ind AS. Refer to note 3 for information on how the Company adopted Ind AS.
The financial statements are prepared on a going concern basis are presented in INR and all values are rounded to the nearest million '' (000,000) except when otherwise indicated. The financial statements have been prepared under the historical cost basis except for derivative financial instruments and certain other financial assets and liabilities that have been measured at fair value.
Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- I t is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified period of twelve months as its operating cycle.
2.2 Property, plant and equipment
Freehold land is carried at historical cost. Plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.
Capital work in progress is stated at cost. Capital work-in-progress comprises of plant and machinery, office equipment, electrical installation which are not ready to use and expenditure incurred for construction of building.
In respect of its interests in jointly controlled assets, the Company recognizes its share of the jointly controlled assets in its financial statements, classifying the jointly controlled asset as per its nature.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognized.
Costs of construction that relate directly to the specific asset and cost that are attributable to the construction activity in general and can be allocated to the specific assets are capitalized. Income earned during the construction period and income from trial runs is deducted from such expenditure pending allocation.
2.3 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
2.4 Investment property
An investment in land or building, which is not intended to be occupied substantially for use by, or in the operations of the Company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the investment property to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Depreciation on building component of investment property is calculated on a straight-line basis using the rate arrived at based on the useful life estimated by the management which is 60 years.
Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.
2.5 Depreciation and amortisation
The Company provides depreciation on property, plant and equipment, investment properties using the straight line method at the rates computed based on the estimated useful lives of the assets as estimated by the management which are equal to the corresponding rates prescribed in Schedule II to the Act. Further, Company provides amortization of intangible asset using the straight line method at the rates computed based on the estimated useful lives of the assets as estimated by the management.
Leasehold land and buildings are depreciated on a straight line basis over the period of lease specified in agreements restricted to the expected economic useful life of asset, i.e. lease period which ranges from 30 years to 99 years in case of leasehold land and up to 60 years in case of leasehold buildings. Leasehold improvements are depreciated on a straight line basis over the shorter of the estimated useful life of the asset or the lease term, which does not exceed 10 years.
The residual values, useful lives and methods of depreciation and amortisation of property, plant and equipment and intangible assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
2.6 Impairment of non- financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating units (âCGUâ) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Company of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
I n assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Companyâs cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, wherever applicable, a long-term growth rate is calculated and applied to projected future cash flows after the fifth year.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
2.7 Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Where the Company is the lessees
Leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Where the Company is the less or
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease.
2.8 Inventories
Inventories are valued as follows:
Raw materials (Newsprint and stores and spares) -Lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.
Finished goods (Magazines) - Lower of cost and net realizable value. Cost is determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.9 Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
Sales tax/ value added tax (âVATâ) and service tax is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity / services by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognized.
Advertisement revenue
Revenue is recognized as and when advertisement is published in newspaper / aired on radio / displayed on website in accordance with the terms of the contract with customer and is disclosed net of trade discounts and service tax, wherever applicable.
Sale of newspapers, magazines, wastage and scrap
Revenue is recognized when all the significant risks and rewards of ownership have passed on to the buyer, usually on delivery of the goods and is disclosed net of sales return, trade discounts and taxes.
Printing job charges
Revenue from printing job work is recognized on the completion of job work as per terms of the agreement with the customer and is disclosed net of trade discounts and taxes.
Income from event management
Revenue from event management is recognized as and when the event management services are rendered as per the terms of agreement.
Interest
For all debt instruments measured either at amortized cost, interest income is recorded using the effective interest rate (âEIRâ). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.
Dividend Income
Revenue is recognized when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
2.10 Barter transactions
Revenue from barter transactions involving exchange of advertisements with non-monetary assets such as investment or property is measured at the fair value of the advertisements published / aired, as it is more clearly evident.
The receivable relating to property barter agreements is grouped as advance for properties and included under the head âOther assetsâ.
2.11 Foreign currency transactions
Transactions in foreign currencies are initially recorded by the Company at their respective functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized as income or expenses in the period in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
2.12 Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as expenses, when an employee renders the related service.
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation done as per projected unit credit method, carried out by an independent actuary at the end of the year. The Company makes contributions to a trust administered and managed by an insurance company to fund the gratuity liability. Under this scheme, the obligation to pay gratuity remains with the Company, although insurance company administers the scheme.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss - Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements and net interest expense or income.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end. The Company presents the leave as a short-term provision in the balance sheet to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as long term provision.
2.13 Income taxes
Current income tax
Current income tax liabilities are measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in OCI or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in OCI or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
2.14 Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement, if any.
I f the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
2.15 Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.
2.16 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. These exchange difference are presented in finance cost to the extent which the exchange loss does not exceed the difference between the cost of borrowing in functional currency when compared to the cost of borrowing in a foreign currency.
2.17 Earnings per equity share (âEPSâ)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
2.18 Cash and cash equivalents
Cash and cash equivalent in the balance sheet and cash flow statement comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
2.19 Employee stock compensation cost
The cost of equity-settled transactions for unvested tranches of grants as at April 01, 2015 is determined by the fair value at the date when the grant is made using Black and Scholes valuation model. The cost is recognized, together with a corresponding increase in âStock options outstandingâ reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is disclosed under employee benefits expense.
No expense is recognized for awards that remain unvested because service conditions have not been met. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
2.20 Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- I n the principal market for the asset or liability, or
- I n the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External values are involved for valuation of significant assets, such as properties and unquoted financial assets.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
2.21 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets.
Subsequent measurement
Financial assets at amortized cost
For purposes of subsequent measurement, financial assets are classified in three categories:
- Debt instruments at amortized cost
- Derivatives and equity instruments at Fair Value Through Profit or Loss (âFVTPLâ)
- Equity instruments measured at FVTOCI
Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost using the effective interest rate (âEIRâ) method if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (âSPPIâ) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (âEIRâ) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade receivables, deposits and advances.
Derivative financial instrument
The Company uses forward currency contracts, to hedge its foreign currency risks. Such forward currency contracts are initially recognized at fair value on the date on which a forward currency contracts is entered into and as at balance sheet date any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (âECLâ) model for measurement and recognition of impairment loss on the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL at each reporting date, right from its initial recognition. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head âother expensesâ in the statement of profit and loss.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives financial instruments, as appropriate.
All financial liabilities are recognized initially at fair value and in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.
2.22 Significant accounting judgments, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Significant judgment
Operating lease commitments - Company as lessee
The Company has entered into commercial property leases for its offices and premises. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the fair value of the asset, that it does not retain all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.
Estimates
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes.
Share-based payments
The Company initially measures the cost of equity-settled transactions with employees using Black and Scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets.
2.23 Recent accounting pronouncements
Standards issued but not yet effective
I n March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ and Ind AS 102, âShare-based payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2, âShare-based payment,â respectively. The amendments are applicable to the Company from April 1, 2017.
Amendment to Ind AS 7
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and the effect on the financial statement is being evaluated
Amendment to Ind AS 102
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the âfair valuesâ, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement.
The Company does not have any cash settled award as at March 31 2017.
Mar 31, 2016
A) Basis of preparation
The financial statements of the Company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards specified
under section 133 of the Companies Act, 2013 (the Act'') read with Rule
7 of the Companies (Accounts) Rules, 2014. The financial statements
have been prepared on an accrual basis and under the historical cost
convention. The accounting policies have been consistently applied by
the Company and are consistent with those used in previous year.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management''s best knowledge of current events and actions,
actual results could differ from these estimates.
c) Tangible fixed assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
cost attributable to bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use
The Company identifies and determines cost of each component/ part of
the asset separately, if the component/ part has a cost which is
significant to the total cost of the asset and has useful life that is
materially different from that of the remaining asset.
The Company adjusts entire exchange differences arising on translation
/ settlement of long-term foreign currency monetary items pertaining to
the acquisition of a depreciable asset to the cost of the asset and
depreciates the same over the remaining life of the asset.
In respect of its interests in jointly controlled assets, the Company
recognises its share of the jointly controlled assets in its financial
statements, classifying the jointly controlled asset as per its nature.
Expenditure on new projects
Costs of construction that relate directly to the specific asset and
cost that are attributable to the construction activity in general and
can be allocated to the specific assets are capitalised.
Income earned during the construction period and income from trial runs
is deducted from such expenditure pending allocation.
d) Depreciation
The Company provides depreciation on tangible fixed assets using the
Straight Line Method at the rates computed based on estimated useful
lives of the assets as estimated by the management, which are equal to
the corresponding rates prescribed in Schedule II to the Act. During
the previous year 2014-15, pursuant to the Act, being effective from
April 01, 2014, the management had re-estimated useful lives and
residual values of its fixed assets. The Company had revised the
depreciation rates on all its tangible fixed assets (other than land
and lease hold assets) as per the useful life specified in Part ''C of
Schedule II to the Act.
In respect of assets whose useful life was already exhausted as on
April 01, 2014, depreciation of Rs. 63,325,349 (net of deferred tax
impact of Rs. 32,607,615) was adjusted against the opening reserves in
accordance with the requirement of Schedule II of the Act.
The Company has used the following lives to provide depreciation on the
fixed assets:
Leasehold land and buildings are depreciated on a straight line basis
over the period of lease specified in agreements restricted to the
expected economic useful life of asset, i.e. lease period which ranges
from 30 years to 99 years in case of leasehold land and up to 60 years
in case of leasehold buildings. Leasehold improvements are depreciated
on a straight line basis over the shorter of the estimated useful life
of the asset or the lease term, which does not exceed 10 years.
e) Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life The Company uses a rebuttable
presumption that the useful life of an intangible asset will not exceed
ten years from the date when the asset is available for use. If the
persuasive evidence exists to the affect that useful life of an
intangible asset exceeds ten years, the Company amortizes the
intangible asset over the best estimate of its useful life. Intangible
assets are tested for impairment annually, either individually or at
the cash-generating unit level. All other intangible assets are
assessed for impairment whenever there is an indication that the
intangible asset may be impaired.
Goodwill
Goodwill is amortised on a straight-line basis over a period of five
years.
Computer software
ERP license and installation cost capitalised, is amortised on a
straight-line basis over a period of five years. Other computer
software is amortised on a straight-line basis over the estimated
useful economic life of the asset which is limited to six years.
One time license fees
One time license fees represent amount paid for acquiring licenses for
radio stations and is amortised on a straight line basis over a period
of fifteen years i.e. period as per Grant of Permission Agreement
entered into with Ministry of Information and Broadcasting for each
station, commencing from the date on which the radio station becomes
operational.
f) Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is any
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable amount
is the higher of an asset''s or cash- generating units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre- tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, wherever
applicable, a long term growth rate is calculated and applied to
projected future cash flows after the fifth year.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
g) Investments
Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired or
partly acquired by the issue of shares or other securities, the
acquisition cost is the fair value of the securities issued. If an
investment is acquired in exchange for another asset, the acquisition
is determined by reference to the fair value of the asset given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
other than temporary diminution in value is made to recognise a decline
other than temporary in the value of the long-term investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
Investment Property
An investment in land or building, which is not intended to be occupied
substantially for use by or in the operations of the Company, is
classified as investment property. Investment properties are stated at
cost, net of accumulated depreciation and accumulated impairment
losses, if any.
The cost comprises purchase price and directly attributable cost of
bringing the investment property to its working condition for the
intended use. Any trade discounts and rebates are deducted in arriving
at the purchase price.
Depreciation on building component of investment property is calculated
on a straight- line basis using the rate arrived at based on the useful
life estimated by the management which is 60 years.
On disposal of an investment property, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
h) Leases
Where the Company is the lessee
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
Where the Company is the lessor
Leases in which the Company does not transfer substantially all the
risks and benefits of ownership of the asset are classified as
operating leases. Assets subject to operating leases are included in
fixed assets. Lease income on an operating lease is recognised in the
statement of profit and loss on a straight-line basis over the lease
term. Costs, including depreciation, are recognised as expenses in the
statement of profit and loss. Initial direct costs such as legal costs,
brokerage costs, etc. are recognised immediately in the statement of
profit and loss.
i) Inventories
Inventories are valued as follows:
Raw materials Newsprint and Stores and Spares - Lower of cost and net
realisable value. However, material and other items held for use in the
production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be
sold at or above cost. Cost is determined on a weighted average basis.
Finished goods Magazines - Lower of cost and net realisable value. Cost
is determined on a weighted average basis.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
j) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following bases are adopted.
Advertisement revenue
Revenue is recognised as and when advertisement is published in
newspaper / aired on radio / displayed on website and is disclosed net
of trade discounts and service tax, wherever applicable.
Sale of newspapers, magazines, wastage and scrap
Revenue is recognised when all the significant risks and rewards of
ownership have passed on to the buyer, usually on delivery of the goods
and is disclosed net of sales return, trade discounts and taxes.
Printing job charges
Revenue from printing job work is recognised on the completion of job
work as per terms of the agreement with the customer and is disclosed
net of trade discounts and taxes.
Portal and wireless revenue
Revenue is recognised as and when the related services are rendered as
per the terms of agreement and are disclosed net of trade discounts.
Sale of power
Revenue from sale of power generated in the wind energy units of the
Company is recognised on the basis of supply made to Madhya Pradesh
Paschim Kshetra V.V. Co. Limited, as per the terms of agreement.
Income from event management
Revenue from event management is recognised once the related event is
completed i.e. completed contract basis.
Interest
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Dividend income
Dividend income is recognised when the shareholders'' right to receive
the payment is established by the Balance sheet date
k) Barter transactions
Revenue from barter transactions involving exchange of advertisements
with non-monetary assets such as investment or property is measured at
the fair value of the advertisements published / aired as it is more
clearly evident.
The receivable relating to property barter agreements is debited to
advance for properties and included under the head ''Loans and advances''
I) Foreign currency transactions
Initial recognition
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
The Company accounts for exchange differences arising on translation/
settlement of foreign currency monetary items as below:
Exchange differences arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalised and
depreciated over the remaining useful life of the asset.
All other exchange differences are recognised as income or as expenses
in the period in which they arise.
The Company treats a foreign currency monetary item as ''long-term
foreign currency monetary item'', if it has a term of 12 months or more
at the date of its origination. In accordance with Ministry of
Corporate Affairs'' circular dated August 09 2012, exchange differences
for this purpose, are total differences arising on long-term foreign
currency monetary items for the period. In other words, the Company
does not differentiate between exchange differences arising from long-
term foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost and other exchange difference
Forward exchange contracts entered into to hedge foreign currency risk
of an existing asset/ liability
The premium or discount arising at the inception of forward exchange
contract is amortised and recognised as an expense / income over the
life of the contract. Exchange differences on such contracts are
recognised in the statement of profit and loss in the period in which
the exchange rates change. Any profit or loss arising on cancellation
or renewal of such forward exchange contract is also recognised as
income or as expense for the period.
m) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The Company has no obligation other than the
contribution payable to the provident fund. The Company recognises
contribution payable to the provident fund scheme as expenditure, when
an employee renders the related service.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per projected unit
credit method, carried out by an independent actuary at the end of the
year.
The Company makes contributions to a trust administered and managed by
an Insurance company to fund the gratuity liability. Under this scheme,
the obligation to pay gratuity remains with the Company, although the
Insurance company administers the scheme
Accumulated leave, which is expected to be utilised within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year- end. The Company presents the leave as a short- term provision in
the balance sheet to the extent it does not have an unconditional right
to defer its settlement for 12 months after the reporting date. Where
Company has the unconditional legal and contractual right to defer the
settlement for a period beyond 12 months, the same is presented as
long-term provision.
Actuarial gains / losses relating to gratuity and leave encashment
liability are immediately taken to the statement of profit and loss and
are not deferred.
n) Income taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 Deferred income taxes reflects
the impact of current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date, unrecognised deferred tax assets of earlier
years are re-assessed and recognised to the extent that it has become
reasonably or virtually certain, as the case may be, that sufficient
future taxable income will be available against which such deferred tax
assets can be realised. The carrying amount of deferred tax assets are
reviewed at each balance sheet date. The Company writes-down the
carrying amount of a deferred tax asset to the extent that it is no
longer reasonably or virtually certain, as the case may be, that
sufficient future taxable income will be available against which
deferred tax asset can be realised. Any such write down is reversed to
the extent that it becomes reasonably or virtually certain, as the case
may be, that sufficient future taxable income will be available
o) Provisions
A provision is recognised when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
p) Borrowing costs
Borrowing costs includes interest, amortisation of term loan processing
fees over the period of loans which are incurred in connection with
arrangements of borrowings and exchange differences arising from short-
term foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as
part of cost of the respective assets. All other borrowing costs are
expensed in the period in which they occur.
q) Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue, bonus element in a rights issue
to existing shareholders, share split, and reverse share split
(consolidation of shares) (if any)
For the purpose of calculating diluted earnings per share, the net
profit for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
r) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognised
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognised because it cannot be measured reliably. The Company does not
recognise a contingent liability but discloses its existence in the
financial statements.
s) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short
term investments with an original maturity of three months or less.
t) Employee stock compensation cost
In accordance with the Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014 and the Guidance Note on
Accounting for Employee Share-based Payments, the cost of
equity-settled transactions is measured using the intrinsic value
method and recognised, together with a corresponding increase in the
Stock options outstanding'' account in reserves and surplus. The
cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Company''s best estimate of the
number of equity instruments that will ultimately vest. The expense or
credit recognised in the statement of profit and loss for the year
represents the movement in cumulative expense recognised as at the
beginning and end of that year and is recognised in employee benefit
expenses. Under this method compensation expense is recorded over the
vesting period of the option on straight line basis, if the fair market
value of the underlying stock exceeds the exercise price at the grant
date
u) Measurement of EBITDA
As permitted by the Guidance note on the Revised Schedule VI to the
CompaniesAct 1956,the Company has elected to present earnings before
interest, tax, depreciation and amortisation expense (EBITDA) as a
separate line item on the face of the statement of profit and loss. The
Company measures EBITDA on the basis of profit from continuing
operation. In this measurement, the Company does not include
depreciation and amortisation expenses, finance costs and tax expenses.
Mar 31, 2013
A) Basis of preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956 (the ''Act''). The financial
statements of the Company have been prepared in accordance with
generally accepted accounting principles in India. The financial
statements have been prepared under the historical cost convention and
on an accrual basis. The accounting policies have been consistently
applied by the Company and are consistent with those used in the
previous year.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management''s best knowledge of current events and actions,
actual results could differ from these estimates.
c) Tangible fixed assets
Fixed assets are stated at cost, less accumulated depreciation /
amortisation and impairment losses, if any. Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use. Borrowing costs relating to
acquisition of fixed assets which takes substantial period of time to
get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use.
The Company adjusts exchange differences arising on translation /
settlement of long-term foreign currency monetary items pertaining to
the acquisition of a depreciable asset to the cost of the asset and
depreciates the same over the remaining life of the asset. In
accordance with the
Ministry of Corporate Affairs circular dated August 09, 2012, exchange
differences adjusted to the cost of fixed assets are total differences,
arising on long-term foreign currency monetary items pertaining to the
acquisition of a depreciable asset, for the period. In other words,
the Company does not differentiate between exchange differences arising
from long- term foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost and other exchange
difference.
d) Depreciation
Depreciation is provided using the Straight Line Method at the rates
computed based on estimated useful lives of the assets as estimated by
the management, which are equal to the corresponding rates prescribed
in Schedule XIV to the Act.
Leasehold land and buildings are amortised on a straight line basis
over the period of lease, i.e. lease period which ranges from 30 years
to 99 years in case of leasehold land and up to 74 years in case of
leasehold buildings as perthe agreement.
Leasehold Improvements are amortised on a straight line basis over the
shorter of the estimated useful life of the asset or the lease term,
which does not exceed 10 years.
Assets individually costing up to Rs. 5,000 are fully depreciated in
the year of its acquisition.
e) Intangible assets Goodwill
Goodwill is amortised on a straight-line basis over a period of five
years.
Computer software-ERP
Computer Software, being the cost of ERP License and Installation, is
amortised on a straight-line basis over a period of five years.
One time entry fees
One time Entry fees represent amount paid for acquiring licenses for
radio stations and is amortised on a straight line basis over a period
often years i.e. period as per Grant of Permission Agreement entered
into with Ministry of Information and Broadcasting for each station,
commencing from the date on which the radio station becomes
operational.
f) Expenditure on new projects Capital work-in-progress:
Costs of construction that relate directly to the specific asset and
cost that are attributable to the construction activity in general and
can be allocated to the specific assets are capitalised.
Pre-operative expenditure:
Indirect expenditure incurred during construction period is capitalised
under the respective asset-head as part of the indirect construction
cost to the extent to which the expenditure is allocable / apportioned
to the asset-head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off in the statement of
profit and loss.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
g) Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an asset''s or cash-generating units (CGU) net
selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
fifth year.
Impairment losses of continuing operations if any, including impairment
on inventories, are recognised in the statement of profit and loss.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer
exist or may have decreased. If such indication exists, the Company
estimates the asset''s or cash-generating unit''s recoverable amount.
A previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset''s
recoverable amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is
recognised in the statement of profit and loss unless the asset is
carried at a revalued amount, in which case the reversal is treated as
a revaluation increase.
h) Investments
Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired, or
partly acquired, by the issue of shares or other securities, the
acquisition cost is the fair value of the securities issued. If an
investment is acquired in exchange for another asset, the acquisition
is determined by reference to the fair value of the asset given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
other than temporary diminution in value is made to recognise a decline
other than temporary in the value of the long-term investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
Investment Property
An investment in land or buildings, which is not intended to be
occupied substantially for use by, or in the operations of, the
Company, is classified as investment property. Investment properties
are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalisation
criteria are met and directly attributable cost of bringing the
investment property to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase
price.
Depreciation on building component of investment property is calculated
on a straight-line basis using the rate arrived at based on the useful
life estimated by the management, or that prescribed under the Schedule
XIV to the Act, whichever is higher.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
i) Leases
Where Company is the lessee
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight-line basis overthe
lease term.
j) Inventories
Inventories are valued as follows:
Raw materials - News Prints and Stores and Spares
Lower of cost and net realisable value. However, material and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Magazines - Lower of cost and net realisable value.
Cost is determined on a weighted average basis.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
k) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following bases are adopted.
Advertisements
Revenue is recognised as and when advertisement is
published/displayed/aired and is disclosed net of trade discounts and
service tax, wherever applicable.
Sale of newspaper, magazine, waste paper and scrap
Revenue is recognised when all the significant risks and rewards of
ownership have passed on to the buyer, usually on delivery of the goods
and is disclosed net of sales return, trade discounts and taxes.
Printing job work
Revenue from printing job work is recognised on the completion of job
work as per terms of the agreement with the customer and is disclosed
net of trade discounts and service tax.
Sale of power
Revenue from sale of power generated in the Wind Energy Units of the
Company is accounted on the basis of supply made to Madhya Pradesh
Paschim Kshetra V.V. Co. Limited, as per the agreement.
Event
Revenue from event management is recognised once the related event is
completed.
Interest
Revenue is recognised on a time proportion basis taking into accountthe
amount outstanding and the rate applicable.
Dividend income
Revenue is recognised when the shareholders'' right to receive the
payment is established by the Balance sheet date.
I) Foreign currency transactions Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non- monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non- monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as below:
- Exchange differences arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalised and
depreciated over the remaining useful life of the asset.
- Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortised over the remaining life
of the concerned monetary item.
- All other exchange differences are recognised as income or as
expenses in the period in which they arise.
The Company treats a foreign currency monetary item as "long-term
foreign currency monetary item", if it has a term of 12 months or
more at the date of its origination. In accordance with Ministry of
Corporate Affairs circular dated August 09, 2012, exchange differences
for this purpose, are total differences arising on long-term foreign
currency monetary items for the period. In other words, the Company
does not differentiate between exchange differences arising from
long-term foreign currency borrowings to the extent they are regarded
as an adjustment to the interest cost and otherexchange difference.
Forward exchange contracts entered into to hedge foreign currency risk
of an existing asset/ liability
The premium or discount arising at the inception of forward exchange
contract is amortised and recognised as an expense / income over the
life of the contract. Exchange differences on such contracts are
recognised in the statement of profit and loss in the period in which
the exchange rates change. Any profit or loss arising on cancellation
or renewal of such forward exchange contract is also recognised as
income or as expense for the period.
m) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The Company has no obligation, other than the
contribution payable to the provident fund. The Company recognises
contribution payable to the provident fund scheme as expenditure, when
an employee renders the related service.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per projected unit
credit method, carried out by an independent actuary at the end of the
year.
The Company makes contributions to a trust administered and managed by
the Insurance Company to fund the gratuity liability. Under this
scheme, the obligation to pay gratuity remains with the Company,
although the insurance company administerthe scheme.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long- term compensated absences are provided for based
on the actuarial valuation using the projected unit credit method at
the year-end. The Company presents the leave as a short- term provision
in the balance sheet; to the extent it does not have an unconditional
right to defer its settlement for 12 months after the reporting date.
Where Company has the unconditional legal and contractual right to
defer the settlement for a period beyond 12 months, the same is
presented as long-term provision.
Actuarial gains / losses are immediately taken to the statement of
profit and loss both for gratuity and leave encashment and are not
deferred.
n) Income taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961. Deferred income taxes
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date, unrecognised deferred tax assets of earlier
years are re-assessed and recognised to the extent that it has become
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which such
deferred tax assets can be realised. The carrying amount of deferred
tax assets are reviewed at each balance sheet date. The Company
writes-down the carrying amount of a deferred tax asset to the extent
that it is no longer reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available
against which deferred tax asset can be realised. Any such writedown is
reversed to the extent that it becomes reasonably or virtually certain,
as the case may be, that sufficient future taxable income will be
available.
o) Provisions
A provision is recognised when the Company has a present obligation as
a result of past event; it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
p) Borrowing costs
Borrowing costs includes interest and amortisation of term loan
processing fees over the period of loans which are incurred in
connection with arrangements of borrowings and exchange differences
arising from short- term foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as
part of cost of the respective assets. All other borrowing costs are
expensed in the period in which they occur.
q) Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares) (if any).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
r) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognised
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognised because it cannot be measured reliably. The Company does not
recognise a contingent liability but discloses its existence in the
financial statements.
s) Cash and cash equivalents
Cash and Cash equivalents comprise cash at bank and in hand and short
term investments with an original maturity of three months or less.
t) Employee stock compensation cost
In accordance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 and the Guidance Note on Accounting for Employee Share-based
Payments, the cost of equity-settled transactions is measured using the
intrinsic value method and recognised, together with a corresponding
increase in the "Stock option outstanding" account in reserves. The
cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Company''s best estimate of the
number of equity instruments that will ultimately vest. The expense or
credit recognised in the statement of profit and loss for the year
represents the movement in cumulative expense recognised as at the
beginning and end of that year and is recognised in employee benefit
expenses. Under this method compensation expense is recorded over the
vesting period of the option on straight line basis, if the fair market
value of the underlying stock exceeds the exercise price at the grant
date.
u) Measurement of EBITDA
As permitted by the Guidance note on the Revised Schedule VI to the
Act, the Company has elected to present earnings before interest, tax,
depreciation and amortisation (EBITDA) as a separate line item on the
face of the statement of profit and loss. The Company measures EBIDTA
on the basis of profit / (loss) from continuing operation. In this
measurement, the Company does not include depreciation and amortisation
expenses, finance costs and tax expenses.
Mar 31, 2012
A) Basis of preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements of the
Company have been prepared in accordance with generally accepted
accounting principles in India. The financial statements have been
prepared under the historical cost convention on an accrual basis. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
b) Presentation and disclosure
During the year ended March 31, 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the Company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirement applicable in the
current year.
c) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management's best knowledge of current events and actions,
actual results could differ from these estimates.
d) Tangible fixed assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. Borrowing costs relating
to acquisition of fixed assets which takes substantial period of time
to get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use.
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset.
e) Depreciation
Depreciation is provided using the Straight Line Method at the rates
computed based on estimated useful life of the assets as estimated by
the management, which are equal to the corresponding rates prescribed
in Schedule XIV to the Companies Act, 1956.
Leasehold land and buildings are amortised on a straight line basis
over the period of lease, i.e. lease period as per the agreement.
Leasehold Improvements are amortised on a straight line basis over the
shorter of the estimated useful life of the asset or the lease term
which is 10 years.
Assets individually costing below Rs. 5,000 are fully depreciated in the
year of its acquisition.
f) Intangible assets
Goodwill
Goodwill is amortised on a straight-line basis over a period of five
years.
Computer software- ERP
Computer Software, being the cost of ERP License and Installation, is
amortised on a straight-line basis over a period of five years.
One time entry fees
One time Entry fees represent amount paid for acquiring licenses for
new radio stations and is amortised on a straight line basis over a
period of ten years i.e. period of Grant of Permission Agreement
entered into with Ministry of Information and Broadcasting for each
station, commencing from the date on which the radio station becomes
operational.
g) Expenditure on new projects
Capital work-in-progress:
Expenditure directly relating to construction activity is capitalised.
Pre-operative expenditure:
Indirect expenditure incurred during construction period is capitalised
under the respective asset-head as part of the indirect construction
cost, to the extent to which the expenditure is allocable/ apportioned
to the asset-head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off in the statement of
profit and loss.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
h) Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognised wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing the value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
risks specific to the asset.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
i) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value, if any, is made to
recognise a decline other than temporary in the value of the
investments.
j) Leases
Where the Company is the lessee
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight- line basis over the
lease term.
k) Inventories
Inventories are valued as follows:
Raw materials- News Prints and Stores and Spares
Lower of cost and net realizable value. However, material and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Magazines and Gifts / Promotional Products
Lower of cost and net realizable value. Cost is determined on a
weighted average basis.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
l) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following bases are adopted.
Advertisements
Revenue is recognised as and when advertisement is
published/displayed/aired and is disclosed net of trade discounts and
service tax.
Sale of newspaper, magazine, waste Paper and scrap
Revenue is recognised when the significant risks and rewards of
ownership have passed on to the buyer and is disclosed net of sales
return and discounts.
Printing job work
Revenue from printing job work is recognised on the completion of job
work as per terms of the agreement with the customer, and is disclosed
net of discounts and service tax.
Sale of power
Revenue from sale of power generated in the Wind Energy Unit of the
Company is accounted on the basis of supply made to Madhya Pradesh
Paschim Kshetra V.V. Co. Limited, as per the agreement.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividend income
Revenue is recognised when the shareholders' right to receive the
payment is established by the Balance sheet date.
m) Foreign currency transactions
Initial recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupees and the foreign currency prevailing at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange differences
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset.
Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items at rates different
from those at which they were initially recorded during the year, or
reported in previous financial statements, are recognised as income or
as expense in the year in which they arise.
Forward exchange contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as an expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
n) Retirement and other employee benefits
Retirement benefits in the form of Provident Fund are a defined
contribution scheme and the contributions are charged to the statement
of profit and loss of the year when the contributions to the respective
funds are due. There are no other obligations other than the
contribution payable to the respective funds.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per projected unit
credit method, carried out by an independent actuary at the end of the
year.
The Company makes contributions to a trust administered and managed by
the insurance Company to fund the gratuity liability. Under this
scheme, the obligation to pay gratuity remains with the Company,
although the insurance company administer the scheme.
Short term compensated absences are provided for based on estimates.
Long term compensated absences are provided based on actuarial
valuation carried out by an independent actuary at the end of the year.
The actuarial valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to the statement of profit
and loss both for gratuity and leave encashment and are not deferred.
o) Income taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India. Deferred
income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. In
situations where the Company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they
can be realised against future taxable profits.
At each balance sheet date, unrecognised deferred tax assets of earlier
years are re-assessed and recognised to the extent that it has become
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. The carrying amount of deferred
tax assets are reviewed at each balance sheet date. The Company
writes-down the carrying amount of a deferred tax asset to the extent
that it is no longer reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available
against which deferred tax asset can be realised. Any such write down
is reversed to the extent that it becomes reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available.
p) Provisions
A provision is recognised when the Company has a present obligation as
a result of past event; it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
q) Borrowing costs
Borrowing costs includes interest and amortisation of term loan
processing fees over the period of loans which are incurred in
connection with arrangements of borrowings and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of cost of the respective assets. All other borrowing costs are
expensed in the period they occur.
r) Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares) (if any).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
s) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognised
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognised because it cannot be measured reliably. The Company does not
recognise a contingent liability but discloses its existence in the
financial statements.
t) Cash and cash equivalents
Cash and Cash equivalents comprise cash at bank and in hand and short
term investments with an original maturity of three months or less.
u) Segment information Identification of segments
The Company's operating businesses are organised and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. There are no geographical
reportable segments since the Company caters to the Indian market only
and does not distinguish any reportable regions within India.
Inter segment Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
v) Employee stock compensation cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 and Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India. The Company measures compensation cost relating to employee
stock options using the intrinsic value method. Compensation expense
is amortised over the vesting period of the option on a straight line
basis.
w) Measurement of EBITDA
As permitted by the Guidance note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortisation (EBITDA) as a separate
line item on the face of the statement of profit and loss. The Company
measures EBIDTA on the basis of profit/(loss) from continuing
operation. In this measurement, the Company does not include
depreciation and amortisation expenses, finance cost and tax expenses.
Mar 31, 2011
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial state- ments and the results of operations during the
reporting period. Although these estimates are based upon managements
best knowledge of cur- rent events and actions, actual results could
differ from these estimates.
c) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation/amor-
tization and impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets which takes substantial period of time to get ready for
its intended use are also included to the extent they relate to the
period till such assets are ready to be put to use. Exchange
differences, in respect of accounting periods commencing on or after
December 7, 2006, arising on reporting of long-term foreign currency
monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial
statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset.
d) Depreciation
Depreciation is provided using the Straight Line Method at the rates
computed based on estimated useful life of the assets as estimated by
the management, which are equal to the corresponding rates pre- scribed
in Schedule XIV to the Companies Act, 1956. Leasehold Improvements are
amortised on a straight line basis over the shorter of the estimated
useful life of the asset or the lease term which is 10 years. Assets
individually costing below Rs. 5,000 are fully depreciated in the year
of its acquisition.
e) Intangibles Goodwill:
Goodwill is amortized on a straight-line basis over a period of five
years.
Computer Software
Computer Software, being the cost of ERP License and Installation, is
amortised on a straight-line basis over a period of five years.
One time Entry Fees
One time Entry fees represent amount paid for acquiring licenses for
new radio stations and is amortized on a straight line basis over a
period of ten years i.e. period of Grant of Permission Agreement
entered into with Ministry of Information and Broadcasting for each
station, com- mencing from the date on which the radio station becomes
operational.
f) Expenditure on new projects Capital Work-in-Progress:
Expenditure directly relating to construction activity is capitalized.
Pre-operative Expenditure:
Indirect expenditure incurred during construction period is capitalized
under the respective asset-head as part of the indirect construction
cost, to the extent to which the expenditure is indirectly related to
the asset-head. Other indirect expenditure incurred during the
construc- tion period, which is not related to the construction
activity or which is not incidental thereto is written off in the
profit and loss account. Income earned during the construction period
and income from trial runs is deducted from preoperative expenditure
pending allocation.
g) Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date if
there is any indication of impairment based on internal/external fac-
tors. An impairment loss is recognized wherever the carrying amount of
an asset exceeds its recoverable amount. The recoverable amount is the
greater of the assets net selling price and value in use. In assessing
the value in use, the estimated future cash flows are dis- counted to
their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and risks specific to the
asset.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
invest- ments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value, if any, is made to
recognise a decline other than temporary in the value of the
investments.
i) Leases
Where the Company is the lessee
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item are classified as
operating leases. Operating lease payments are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
j) Inventories
Inventories are valued as follows:
Raw materials- News Prints and Lower of cost and net realizable
Stores and Spares value. However, material and
other items held for use in the
production of inventories are not
written down below cost if the
finished products in which they
will be incorporated are expected
to be sold at or above cost. Cost
is determined on a weight- ed
average basis.
Magazines and Gift / Promotional Lower of cost and net realizable
Products value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the eco-
nomic benefits will flow to the Company and the revenue can be reli-
ably measured. Specifically, the following bases are adopted.
Advertisements
Revenue is recognized as and when advertisement is published/dis-
played/aired and is disclosed net of discounts and service tax.
Sale of Newspaper, Magazine, Waste Paper and Scrap
Revenue is recognized when the significant risks and rewards of own-
ership have passed on to the buyer and is disclosed net of sales return
and discounts.
Printing Job Work
Revenue from printing job work is recognized on the completion of job
work as per terms of the agreement with the customer.
Sale of power
Revenue from sale of power generated in the Wind Energy Unit of the
Company is accounted on the basis of supply made to Madhya Pradesh
Paschim Kshetra V.V. Co. Limited, as per the agreement.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividend Income
Revenue is recognised when the shareholders right to receive the
payment is established by the Balance sheet date.
l) Foreign currency transactions
Initial recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupee and the foreign currency prevailing at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
Exchange differences
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset..
Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items at rates different
from those at which they were initially recorded during the year, or
reported in previous financial statements, are recognized as income or
as expense in the year in which they arise.
Forward exchange contracts not intended for trading or specula- tion
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as an expense or income over the life of the
con- tract. Exchange differences on such contracts are recognised in
the statement of profit and loss in the year in which the exchange
rates change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
m) Retirement and other employee benefits
Retirement benefits in the form of Provident Fund are a defined con-
tribution scheme and the contributions are charged to the profit and
loss account of the year when the contributions to the respective funds
are due. There are no other obligations other than the contribution
payable to the respective funds.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per projected unit
credit method, carried out by an independent actuary at the end of the
year.
The Company makes contributions to a trust administered and man- aged
by the insurance company to fund the gratuity liability. Under this
scheme, the obligation to pay gratuity remains with the Company,
although the insurance company administer the scheme. Short term
compensated absences are provided for based on esti- mates. Long term
compensated absences are provided based on actuarial valuation carried
out by an independent actuary at the end of the year. The actuarial
valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred
n) Income Taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authori- ties
in accordance with the Income Tax Act, 1961 enacted in India. Deferred
income taxes reflects the impact of current year timing differ- ences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognised only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised. In situations where the Company has unabsorbed
depreciation or carry forward tax loss- es, all deferred tax assets are
recognised only if there is virtual cer- tainty supported by convincing
evidence that they can be realised against future taxable profits.
At each balance sheet date, unrecognized deferred tax assets of ear-
lier years are re-assessed and recognized to the extent that it has
become reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. The carrying amount of
deferred tax assets are reviewed at each balance sheet date. The
Company writes-down the carrying amount of a deferred tax asset to the
extent that it is no longer reasonably certain or virtually certain, as
the case may be, that sufficient future taxable income will be
available against which deferred tax asset can be realised. Any such
write down is reversed to the extent that it becomes reasonably certain
or virtu- ally certain, as the case may be, that sufficient future
taxable income will be available.
o) Provision
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best esti-
mates.
p) Deferred Revenue Expenditure
Term loan processing fees incurred for raising loan funds are amor-
tised equally over the period of the loan.
q) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares) (if any).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
r) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand and short term investments with an original matu- rity
of three months or less.
s) Segment Information Identification of segments
The Companys operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. There are no geo- graphical
reportable segments since the Company caters to the Indian market only
and does not distinguish any reportable regions within India.
Inter segment Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
t) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 and Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India. The Company measures compensa- tion cost relating to employee
stock options using the intrinsic value method. Compensation expense is
amortized over the vesting period of the option on a straight line
basis.
Mar 31, 2010
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortization and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. Borrowing costs relating
to acquisition of fixed assets which takes substantial period of time
to get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use.
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset.
d) Depreciation
Depreciation is provided using the Straight Line Method at the rates
computed based on estimated useful life of the assets as estimated by
the management, which are equal to the corresponding rates prescribed
in Schedule XIV to the Companies Act, 1956.
Leasehold Improvements are amortised on a straight line basis over the
shorter of the estimated useful life of the asset or the lease term.
Assets individually costing below Rs. 5,000 are fully depreciated in
the year of its acquisition.
e) Intangibles
Goodwill
Goodwill is amortized on a straight-line basis over a period of five
years.
Goodwill on consolidation is amortized on a straight line basis over
a pariod of five years.
One time Entry Fees
One time Entry fees represent amount paid for acquiring licenses
for new radio stations and is amortized on a straight line basis over
a period of ten years i.e. period of Grant of of Permission Agreement
entered into with Ministry of information and Broadcasting for each
station. commencing from the date on which the radio station becomes
operational.
Computer Software
Computer Software, being the cost of ERP License and Installation, is
amortised on a straight-line basis over a period of five years.
f) Expenditure on new projects
Capital Work-in-Progress:
Expenditure directly relating to construction activity is capitalized.
Pre-operative Expenditure:
Indirect expenditure incurred during construction period is capitalized
under the respective asset-head as part of the indirect construction
cost, to the extent to which the expenditure is indirectly related to
the asset-head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off in the profit and
loss account.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
g) Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date if
there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing the value in use, the estimated future cash flows are
discounted to their present value at the weighted average cost of
capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long- term investments are carried at
cost. However, provision for diminution in value, if any, is made to
recognise a decline other than temporary in the value of the
investments.
i) Leases
Where the Company is the lessee
Leases where the lessor^effectively retains substantially all
the risks and benefits of ownership of the leased item, are classified
as operating leases. Operating lease payments are recognized as an
expense in the profit and loss account on a straight-line basis over
the lease term.
j) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following bases are adopted.
Advertisements Revenue is recognized as and when advertisement
is published/displayed and is disclosed net of discounts. Sale
of Newspaper, Magazine, Waste Paper and Scrap Revenue is
recognized when the significant risks and rewards of ownership
have passed on to the buyer and is disclosed net of sales return
and discounts. Printing Job Work Revenue from printing job work
is recognized on the completion of job work as per terms of the
agreement with the customer. Sale of power Revenue from sale of
power generated in the Wind Energy Unit of the Company is
accounted on the basis supply made to Madhya Pradesh Paschim shetra
V.V. Co. Limited, as per the agreement. Interest Revenue is
recognized on a time proportion basis taking into account the
amount outstanding and the rate applicable.
k) Foreign currency transactions Initial recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupee and the foreign currency prevailing at the date of the
transaction. Conversion Foreign currency monetary items are reported
using the closing rate. Non-monetary items which are carried in terms
of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction; and non-
monetary items which are carried at fair value or other similar
valuation denominated in a foreign currency are reported using the
exchange rates that existed when the values were determined.
Exchange differences
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable fixed asset, are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, and in
other cases, are accumulated in a" Foreign Currency Monetary Item
Translation Difference Account" Exchange differences arising on the
settlement of monetary items not covered above, or on reporting such
monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial
statements, are recognized as income or as expenses in the year in
which they arise.
Forward exchange contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as an expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
l) Retirement and other employee benefits
Retirement benefits in the form of Provident Fund are a defined
contribution scheme and the contributions are charged to the profit and
loss account of the year when the contributions to the respective funds
are due. There are no other obligations other than the contribution
payable to the respective funds.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per projected unit
credit method, carried out by an independent actuary at the end of the
year. Actuarial gains/losses are immediately taken to profit and loss
account and are not deferred. The Company makes contributions to a
trust administered and managed by the insurance company to fund the
gratuity liability. Under this scheme, the obligation to pay gratuity
remains with the Company, although the insurance company administer the
scheme.
Short term compensated absences are provided for based on estimates.
Long term compensated absences are provided based on actuarial
valuation carried out by an independent actuary at the end of the year.
The actuarial valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred
m) Income Taxes
Tax expense comprjses of current, deferred and fringe benefit
tax. Current income tax and fringe benefit tax is measured at the
amount expected to be paid to the tax authorities in accordance with
the Indian Income Tax Act, 1961. Deferred income taxes reflects the
impact of current year timing differences between taxable income and
accounting income for the year and reversal of timing differences of
earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits. At each balance sheet date,
unrecognized deferred tax assets of earlier years are re-assessed and
recognized to the extent that it has become reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. The carrying amount of deferred tax assets are reviewed at
each balance sheet date. The Company writes-down the carrying amount of
a deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient
future taxable income will be available against which deferred tax
asset can be realised.
n) Provision
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
o) Deferred Revenue Expenditure
Term loan processing fees incurred for raising loan funds are amortised
equally over the period of the loan.
p) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares) (if any).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
q) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
r) Segment Information Identification of segments
The Companys operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. There are no geographical
reportable segments since the Company caters to the Indian market only
and does not distinguish any reportable regions within India.
Inter segment Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Includes general corporate income and expense items which
are not allocated to any business segment.
Segment Policies
The Company prepares its segment information in conformity
with the accounting policies adopted for preparing and
presenting the financial statements of the Company as a whole.
s) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines 1999 and Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India. The Company measures compensation cost relating to employee
stock options using the intrinsic value method. Compensation expense
is amortized over the vesting period of the option on a straight line
basis.
Mar 31, 2009
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Notified Accounting Standards by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accountings policies have been consistently applied by the Company
and except for change in accounting policy discussed more fully below,
are consistent with those used in the previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use. Borrowing costs
relating to acquisition of fixed assets which takes substantial period
of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to be put
to use.
d) Depreciation
Depreciation is provided on Straight Line Method at the rates computed
based on estimated useful life of the assets, which are equal to the
corresponding rates prescribed in Schedule XIV to the Companies Act,
1956.
Leasehold Improvements are amortised over the shorter of the estimated
useful life of the asset or the lease term.
Assets individually costing below Rs. 5,000 are fully depreciated in
the year of acquisition.
e) Intangibles
Goodwill
Goodwill is amortized on a straight-line basis over five years.
Computer Software
Computer Software, being the cost of ERP License and Installation, is
amortised over five years.
f) Expenditure on new projects Capital Work-in-Progress:
Expenditure directly relating to construction activity is capitalized.
Pre-operative Expenditure:
Indirect expenditure incurred during construction period is capitalized
under the respective asset-head as part of the indirect construction
cost, to the extent to which the expenditure is indirectly related to
the asset- head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off in the profit and
loss account.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
g) Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value, if any, is made to
recognise a decline other than temporary in the value of the
investments.
i) Leases (Where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
j) Inventories
Inventories are valued as follows:
Raw materials - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Stores and spares - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Magazines - Lower of cost and net realizable value. Gifts /
Promotional Products At net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following basis is adopted.
Advertisements
Revenue is recognized as and when advertisement is published/displayed
and is disclosed net of discounts.
Sale of Newspaper, Magazine, Waste Paper and Scrap
Revenue is recognized when the significant risks and rewards of
ownership have passed on to the buyer and is disclosed net of sales
return and discounts.
Printing Job Work
Revenue from printing job work is recognized on the completion of job
work as per terms of the agreement.
Sale of power
Revenue from generation of power in the Wind Energy Unit of the Company
is accounted on the basis of billing to Madhya Pradesh Paschim Kshetra
V.V. Co. Ltd.
Billing is done on the basis of supply of power to the Grid as recorded
in the installed meters.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable
l) Foreign Currency Transaction
Initial Recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupee and the foreign currency prevailing at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
Exchange Differences
Exchange differences, in respect of accounting periods commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable capital asset, are added to or deducted from the cost of
the asset and are depreciated over the balance life of the asset.
Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.
Forward Exchange Contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
m) Retirement and other Employee Benefits
Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the profit and
loss account of the year when the contributions to the respective funds
are due. There are no other obligations other than the contribution
payable to the respective trusts.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per Projected Unit
Credit method, carried out by an independent actuary at the end of the
year and is contributed to Gratuity Fund created by the Company.
Short term compensated absences are provided for based on estimates.
Long term compensated absences are provided based on actuarial
valuation carried out by an independent actuary at the end of the year.
The actuarial valuation is done as per Projected Unit Credit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
n) Income Taxes
Tax expense comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Indian Income Tax Act 1961. Deferred income taxes reflects the impact
of current year timing differences between taxable income and
accounting income for the year and reversal of timing differences of
earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each Balance Sheet date, Unrecognized Deferred Tax Assets of earlier
years are re-assessed and recognized to the extent that it has become
reasonably certain or virtually certain, as the case may be, that
future taxable income will be available against which such Deferred Tax
Assets can be realized. The carrying amount of deferred tax assets are
reviewed at each balance sheet date. The company writes-down the
carrying amount of a deferred tax asset to the extent that it is no
longer reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available against which
deferred tax asset can be realised.
MAT credit is recognized as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
o) Provision
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
p) Deferred Revenue Expenditure
Term Loan Processing fees incurred for raising loan funds are amortised
equally over the period of the loan.
q) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
r) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
s) Segment Information
The Company is exclusively engaged in the business of publishing
newspapers and magazines which is considered to constitute one single
primary segment in the context of Accounting Standard 17 on Segmental
Reporting issued by the Institute of Chartered Accountants of India.
There are no geographical reportable segments since the Company caters
to the Indian market only and does not distinguish any reportable
regions within India.
t) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines 1999 and Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period of
the option on a straight line basis.
Mar 31, 2008
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Notified Accounting Standards by Companies Accounting
Standards Rules, 2006 and the relevant provisions of the Companies Act,
1956. The financial statements have been prepared under the historical
cost convention on an accrual basis. The accounting policies have been
consistently applied by the Company and except for change in accounting
policy discussed more fully below, are consistent with those used in
the previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use. Borrowing costs
relating to acquisition of fixed assets which takes substantial period
of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to be put
to use.
d) Depreciation
Depreciation is provided on Straight Line Method at the rates computed
based on estimated useful life of the assets, which are equal to the
corresponding rates prescribed in Schedule XIV to the Companies Act,
1956.
Leasehold Improvement is amortized over a period of 10 years.
Assets costing below Rs. 5,000 are fully depreciated in the year of
acquisition.
e) Intangibles
Goodwill
Goodwill is amortized on a straight-line basis over five years.
Computer Software
Computer Software, being the cost of ERP License and Installation, is
amortised over five years.
f) Expenditure on new projects Capital Work-in-Progress:
Expenditure directly relating to construction activity is capitalized.
Pre-operative Expenditure:
Indirect expenditure incurred during construction period is capitalized
under the respective asset-head as part of the indirect construction
cost, to the extent to which the expenditure is indirectly related to
the asset- head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off in the profit and
loss account.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
g) Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value, if any, is made to
recognise a decline other than temporary in the value of the
investments.
i) Leases (Where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
j) Inventories
Inventories are valued as follows :
Raw materials - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Stores and spares - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Magazines - Lower of cost and net realizable value. Gifts /
Promotional Products At net realizable value.
Scrap and Waste papers - At net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following basis is adopted.
Advertisements
Revenue is recognized as and when advertisement is published/displayed
and is disclosed net of discounts.
Sale of Publications, Waste Paper and Scrap
Revenue is recognized when the significant risks and rewards of
ownership have passed on to the buyer and is disclosed net of sales
return and discounts.
Printing Job Work
Revenue from printing job work is recognized on the completion of job
work as per terms of the agreement.
Sale of power
Revenue from generation of power in the Wind Energy Unit of the Company
is accounted on the basis of billing to Madhya Pradesh Paschim Kshetra
V.V. Co. Ltd.
Billing is done on the basis of supply of power to the Grid as recorded
in the installed meters.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
l) Foreign Currency Transaction
Initial Recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupee and the foreign currency prevailing at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency, are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
Exchange Differences
Exchange differences arising on the settlement of monetary and
non-monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial
statements, are recognized as income or as expense in the year in which
they arise.
Forward Exchange Contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
m) Retirement and other Employee Benefits
Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the profit and
loss account of the year when the contributions to the respective funds
are due. There are no other obligations other than the contribution
payable to the respective trusts.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation done as per Projected Unit
Credit method, carried out by an independent actuary at the end of the
year / period and is contributed to Gratuity Fund created by the
Company.
Short term compensated absences are provided for based on estimates.
Long term compensated absences are provided based on actuarial
valuation carried out by an independent actuary at the end of the year
/ period. The actuarial valuation is done as per projected unit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
n) Income Taxes
Tax expense comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Indian Income Tax Act. Deferred income taxes reflects the impact of
current year timing differences between taxable income and accounting
income for the year and reversal of timing differences of earlier
years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
Unrecognized Deferred Tax Assets of earlier years are re-assessed and
recognized to the extent that it has become reasonably certain or
virtually certain, as the case may be, that future taxable income will
be available against which such Deferred Tax Assets can be realized.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised.
MAT credit is recognized as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
o) Provision
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
p) Deferred Revenue Expenditure
Deferred Revenue Expenditure incurred prior to April 1, 2003 is written
off over a period of five years.
q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes, if any) by the
weighted average number of equity shares outstanding during the period.
The weighted average number of equity shares outstanding during the
period are adjusted for events of bonus issue; bonus element in a
rights issue to existing shareholders; share split; and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
r) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
s) Segment Information
i. Identification of Segments:
The Companys operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The Company sells its products
and services within India with insignificant export income and does not
have any operations in economic environments with different risks and
returns, hence, it is considered operating in a single geographical
segment.
ii. Allocation of costs:
Revenues and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenues
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
ÃUnallocated corporate expenses/ incomeÃ.
iii. Inter segmental Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
t) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India. The Company measures compensation cost relating to employee
stock options using the intrinsic value method. Compensation expense is
amortized over the vesting period of the option on a straight line
basis.
Mar 31, 2007
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the mandatory Accounting Standards issued by the
Institute of Chartered Accountants of India and the relevant provisions
of the Companies Act, 1956. The financial statements have been prepared
under the historical cost convention on an accrual basis. The
accounting policies have been consistently applied by the Company and
except for the changes in accounting policy discussed more fully below,
are consistent with those used in the previous year..
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates
c) Fixed Assets:
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation. Cost comprises the purchase price
and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets which takes substantial period of time to get ready for
its intended use are also included to the extent they relate to the
period till such assets are ready to be put to use
d) Depreciation:
Depreciation is provided on Straight Line Method at the rates computed
based on estimated useful life of the assets, which are equal to the
corresponding rates prescribed in Schedule XIV to the Companies Act,
1956.
Assets costing below Rs. 5,000 are fully depreciated in the year of
acquisition.
e) Intangibles
Goodwill
Goodwill is amortized on a straight-line basis over five years.
f) Expenditure on new projects
Capital Work-in-Progress:
Expenditure directly relating to construction activity is capitalized.
Pre-operative Expenditure:
Indirect expenditure incurred during construction period is capitalized
under the respective asset-head as part of the indirect construction
cost to the extent to which the expenditure is indirectly related to
the asset- head. Other indirect expenditure incurred during the
construction period, which is not related to the construction activity
or which is not incidental thereto is written off to revenue.
Income earned during the construction period and income from trial runs
is deducted from preoperative expenditure pending allocation.
g) Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments
i) Leases (Where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss Account on a straight-line basis over the lease
term.
j) Inventories:
Inventories are valued as follows :
Raw materials - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a FIFO basis
Stores and spares - Lower of cost and net realizable value. However,
material and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis
Work-in-progress - Lower of cost and net realizable value. Cost
represents direct materials cost
Scrap and Waste papers - At net realizable value
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale
k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Specifically, the following basis is adopted:
Advertisements
Revenue is recognized as and when advertisement is published /displayed
and is disclosed net of discounts.
Sale of Publications, Waste Paper and Scrap
Revenue is recognized when the significant risks and rewards of
ownership have passed on to the buyer and is disclosed net of sales
return and discounts.
Printing Job Work
Revenue from printing job work is recognized on the completion of job
work as per terms of the agreement.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
l) Foreign Currency Transaction:
Initial Recognition
Foreign currency transactions are recorded in Indian Rupees by applying
to the foreign currency amount, the exchange rate between the Indian
Rupee and the foreign currency prevailing at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency, are reported using the exchange rate
at the date of the transaction; and non- monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
Exchange Differences
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized
as income or as expense in the year in which they arise except gain or
loss on transactions relating to acquisition of Fixed
Assets/Intangibles from outside India, which is adjusted to the
carrying amount of the Fixed Assets/Intangibles.
m) Retirement and other Employee Benefits
Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the respective funds
are due. There are no other obligations other than the contribution
payable to the respective trusts.
Gratuity liability, a defined benefit obligation, is provided for on
the basis of an actuarial valuation made at the end of each financial
year and is contributed to Gratuity Fund created by the Company.
Provision for leave encashment is accrued and made on the basis of an
actuarial valuation carried out by an independent actuary at the year
end.
n) Income Taxes
Tax expense comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Indian Income Tax Act. Deferred income taxes reflects the impact of
current year timing differences between taxable income and accounting
income for the year and reversal of timing differences of earlier
years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
Unrecognized Deferred Tax Assets of earlier years are re-assessed and
recognized to the extent that it has become reasonably certain that
future taxable income will be available against which such Deferred Tax
Assets can be realized
MAT credit is recognized as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
o) Provision
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
p) Deferred Revenue Expenditure
Deferred Revenue Expenditure incurred prior to April 1, 2003 is written
off over a period of five years.
q) Earning Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares
r) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
s) Segment Information
The Company is engaged in the Printing and Publication of Newspapers
and Periodicals. The entire operations are governed by the same set of
risk and returns, hence, the same has been considered as representing a
single primary segment. The said treatment is in accordance with the
guiding principles enunciated in the Accounting Standard à 17 on
Segment Reporting.
The Company sells its products mostly within India with insignificant
export income and does not have any operations in economic environments
with different risks and returns, hence, it is considered operating in
a single geographical segment.
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