Accounting Policies of Hindustan Media Ventures Ltd. Company
Mar 31, 2023
1. Corporate information
Hindustan Media Ventures Limited (âHMVLâ or âthe Companyâ) is a Public Limited Company domiciled in India & incorporated under the provision of the Companies Act, 1913. Its shares are listed on Bombay Stock Exchange (BSE) & National Stock Exchange (NSE).
HT Media Limited (âHolding Companyâ) holds 74.40% of Equity Share Capital of the Company. The Company is engaged in the business of publishing âHindustanâ, a Hindi Daily. The Company is also engaged into the business of running digital over-the-top (OTT) platform with the name âOTT Playâ. The registered office of the Company is located at Budh Marg, Patna- 800001.
Information on other related party relationships of the Company is provided in Note 34.
The financial statements of the Company for the year ended March 31, 2023 are authorised for issue in accordance with a resolution of the Board of Directors on May 16, 2023.
2. Significant accounting policies followed by company2.1 Basis of preparation
The standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (âInd ASâ) specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Companies Act 2013 (the âaccounting principles generally accepted in Indiaâ).
The accounting policies are applied consistently to all the periods presented in the financial statements.
The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:
- Derivative financial instruments measured at fair value;
- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments)
- Defined benefit plans - plan assets measured at fair value;
The standalone financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency and all values are rounded to nearest lakhs.
2.2 Summary of significant accounting policiesa) Current versus non- current classification
The Company presents assets and liabilities in the balance sheet based on current/ noncurrent classification. An asset is treated as current when it is:
⢠Expected to be realised or intended to sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
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 publishing of advertisement and circulation of newspaper and its realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
b) Foreign currenciesTransactions and Balances
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. However, for practical reasons, the Company uses monthly average rate if the average approximates the actual rate at the date of the transaction.
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 the settlement of monetary items or on restatement of the Companyâs monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or as expenses in the period in which they arise. They are deferred in equity if they relate to qualifying cash flow hedges.
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.
Exchange differences pertaining to long term foreign currency loans obtained or re-financed on or before 31 March 2016:
- Exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the assets in accordance with option available under Ind-AS 101 (first time adoption).
Exchange differences pertaining to long term foreign currency loans obtained or refinanced on or after 1 April 2016:
- The exchange differences pertaining to long term foreign currency loans obtained or re-financed on or after 1 April 2016 is charged off or credited to the statement of profit & loss account under Ind-AS.
The Company measures financial instruments, such as, derivatives and certain investments at fair value at each reporting/ 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
⢠Level 2 â Valuation techniques for which inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
⢠Level 3 â Valuation techniques for which inputs are unobservable inputs for the asset or liability
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.
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.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes :
⢠Disclosures for valuation methods, significant estimates and assumptions (Note 37)
⢠Quantitative disclosures of fair value measurement hierarchy (Note 37)
⢠Investment properties (Note 4)
⢠Financial instruments (including those carried at amortised cost) (Note 37)
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, regardless of when the payment is being made.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
Revenue excludes taxes collected from customers. 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.
Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on behalf of the government. Accordingly, it is excluded from revenue.
Contract asset and unbilled receivables
Contract asset represents the Companyâs right to consideration in exchange for services that the Company has transferred to a customer when that right is conditioned on something other than the passage of time.
When there is unconditional right to receive cash, and only passage of time is required to do invoicing, the same is presented as unbilled receivable.
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 specific recognition criteria described below must also be met before revenue is recognised:
Revenue is recognized as and when advertisement is published/ displayed and when it is âprobableâ that the Company will collect the consideration it is entitled to in exchange for the services it transfers to the customer.
Revenue from advertisement is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
Sale of News & Publications, Waste Papers and Scrap
Revenue from the sale of newspaper & publications are recognised when the newspaper and publications are delivered to the distributor. 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 the sale of goods is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
For contracts with a significant financing component, an entity adjusts the promised consideration to reflect the time value of money.
Management also extends a right to return to its customers which it believes is a form of variable consideration. Revenue recognition is limited to amounts for which it is âhighly probableâ a significant reversal will not occur (i.e. it is highly probable the goods will not be returned). A refund liability is established for the expected amount of refunds and credits to be issued to customers.
Revenue from printing job work is recognized on the stage of completion of job work as per terms of the agreement.
Revenue from job work is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
OTT Play Subscription revenue
Subscription revenue is recognized over the period of the subscription, in accordance with the established principles of accrual accounting. Unearned revenues are reported on the balance sheet as deferred revenue.
For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate (ElR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.
Dividends
Revenue is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
e) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants for purchase of property, plant and equipment, the asset and the grant are recorded at fair value amounts and released to statement of profit and loss over the expected useful life of the asset.
Current income tax
Tax expense comprises 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.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised is 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.
Appendix C to Ind AS 12, Income Taxes dealing with accounting for uncertainty over income tax treatments does not have any material impact on financial statements of the Company.
Deferred tax is provided considering temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable with convincing evidence that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
GST/ value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of GST/ value added taxes paid, except:
⢠When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable
⢠When receivables and payables are stated with the amount of tax included
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
g) Non- current assets held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
h) Property, plant and equipment
The Company has applied the one time transition option of considering the carrying cost of property, plant & equipment and intangible assets on the transition date i.e. April 1, 2015 as the deemed cost under Ind-AS.
Construction in progress is stated at cost, net of accumulated impairment losses, if any. Plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
Cost comprises the purchase price, borrowing costs if capitalization criteria are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful life. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation methods, estimated useful life and residual value
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
|
Type of asset |
Useful life estimated by management (Years) |
|
Plant and Machinery |
2-21 |
|
Buildings (Factory) |
10-30 |
|
Buildings (other than factory buildings) |
3-60 |
|
Furniture and Fixtures |
2-10 |
|
Office Equipment |
2-5 |
|
Vehicles |
8 |
The Company, based on technical assessment made by the management depreciates certain assets over estimated useful life which are different from the useful life prescribed in Schedule ll to the Companies Act, 2013. The management has estimated, supported by technical assessment, the useful life of certain plant and machinery as 16 to 21 years. These useful life are higher than those indicated in schedule II to the Companies Act, 2013. The management believes that these estimated useful life are realistic and reflect a fair approximation of the period over which the assets are likely to be used.
Property, Plant and Equipment which are added/ disposed off during the year, depreciation is provided on pro-rata basis with reference to the month of addition/deletion.
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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
Subsequent expenditure can be capitalised only if it is probable that future economic benefits associated with the expenditure will flow to the Company.
Expenditure directly attributable to construction activity is capitalized. Other indirect costs incurred during the construction periods which are not directly attributable to construction activity are charged to Statement of Profit and Loss. Reinvested income earned during the construction period is adjusted against the total of indirect expenditure.
The residual values, useful life and methods of depreciation of property, pla nt and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Investment properties are properties (land and buildings) that are held for long-term rental yields and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The Company depreciates building component of investment property over 30 years from the date property is ready for possession.
Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Investment properties recognised as at 1st April 2015 measured as per the Indian GAAP and use that carrying value as the deemed cost of the Investment Properties.
Investment properties are derecognised 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 recognised in profit or loss in the period of de-recognition.
Investment properties that meet the criteria to be classified as held for sale are measured and presented in accordance with Ind AS 105.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Value for individual software license acquired from the holding company in an earlier year is allocated based on the valuation carried out by an independent expert at the time of acquisition.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangible assets recognised as at 1st April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Intangible assets.
The useful life of intangible assets is assessed as either finite or indefinite.
Intangible assets with finite life 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. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite life is recognised in the statement of profit and loss.
Intangible assets with indefinite useful life are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Intangible assets with finite life are amortized on straight line basis using the estimated useful life as follows:
|
Intangible Assets |
Useful life (in years) |
|
Software Licenses |
1 - 6 |
|
Brand |
Indefinite useful life |
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon 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 or loss.
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.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement
date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straightline method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised insubstance fixed lease payments. The Company recognises the amount of the re-measurement of
lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
As a practical expedient a lessee (the company) has elected, by class of underlying asset, not to separate lease components from any associated non-lease components. A lessee (the company) accounts for the lease component and the associated non-lease components as a single lease component.
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight- line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessorâs net investment in the lease.
|
m) Inventories Inventories are valued as follows : |
|
|
Raw materials, |
Lower of cost and net |
|
stores and |
realizable value. However, |
|
spares |
material and other items held for use in the production of inventories are not written down below cost ifthe 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- |
Lower of cost and net realizable |
|
progress and |
value. Cost includes direct |
|
finished goods |
materials and a proportion of manufacturing overheads based on normal operating capacity. Cost is determined on a weighted average basis. |
|
Scrap and waste papers |
At net realizable value |
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.
n) Impairment of non-financial assets
For assets with definite useful life, 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 unitâs (CGU) 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 groups 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.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded Companyâs or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the
Companyâs CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover 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. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs 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 or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
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 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 recognised as a finance cost.
Short term employee benefits and defined contribution plans:
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc. are recognised in the statement of profit and loss in the period in which the employee renders the related service.
Employee 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 an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity is a defined benefit scheme. The defined benefit obligation is Computed by actuaries using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
⢠The date of the plan amendment or curtailment, and
⢠The date that the Company recognises related restructuring cost
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of profit and loss:
⢠Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
⢠Net interest expense or income Termination Benefits
Termination benefits are payable when employment is terminated by the company before the normal retirement date. The Company recognises termination benefits at the earlier of the following dates: (a) when the company can no longer withdraw the offer of those benefits; and (b) when the Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
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.
Re-measurements, comprising of actuarial gains and losses, are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability 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 non- current liability.
Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The Company has availed option under Ind-AS 101, to apply intrinsic value method to the options already vested before the date of transition and applied Ind-AS 102 Share-based payment to equity instruments that remain unvested as of transition date
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting
date until the vesting date reflects the extent to which the vesting period has expired and the 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 recognised as at the beginning and end of that period and is recognised in employee benefits expense. The SBP Scheme is administered through Employee Stock Option Trust.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companyâs best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
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 assetsInitial recognition and measurement
All financial assets (Other than trade receivable which is recognised at transaction price as per Ind AS 115) are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
For purposes of subsequent measurement, financial assets are classified into two categories:
⢠Debt instruments at amortised cost
⢠Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost 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 (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) 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 and other receivables. For more information on receivables, refer to Note 10A.
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).
The net changes in fair value are recognised in the statement of profit and loss. Mutual Funds Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss as âFinance income from debt instruments at FVTPLâ under the head âOther Incomeâ.
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading recognised by an acquirer in a business combination to which Ind-AS 103 applies are Ind-AS classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income 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.
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 P&L, even on sale of investment. However, the Company may
transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpassthroughâ arrangement; 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.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind-AS 115 (referred to as âcontractual revenue receivablesâ in these financial statements)
The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
⢠Trade receivables or contract revenue receivables; and
⢠All lease receivables resulting from transactions within the scope of Ind- AS 116
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. 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.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument.
The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
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 forwardOlooking estimates. At every reporting date, the historical observed default rates are updated and changes in the forwardOlooking estimates are analysed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head âother expensesâ in the P&L. The balance sheet presentation for various financial instruments is described below:
⢠Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
For assessing increase in credit risk and impairment loss. The Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Financial liabilitiesInitial recognition and mea
Mar 31, 2018
a) Current versus non- current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
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 publishing of advertisement and circulation of newspaper and its realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
b) Foreign currencies
Transactions and Balances
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. However, for practical reasons, the Company uses monthly average rate if the average approximates the actual rate at the date of the transaction.
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 the settlement of monetary items or on restatement of the Companyâs 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.
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.
c) Fair value measurement
The Company measures financialinstruments, such as, derivatives and certain investments at fair value at each reporting/ 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.
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.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes :
- Disclosures for valuation methods, significant estimates and assumptions (Note 37)
- Quantitative disclosures of fair value measurement hierarchy (Note 37A)
- Investment properties (Note 4)
- Financial instruments (including those carried at amortised cost) (Note 37)
d) 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, regardless of when the payment is being made. 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.
Goods and Service Tax (GST)/ Service Tax is not received by the Company on its own account. Rather, it is tax collected on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised:
Advertisements
Revenue is recognized as and when advertisement is published/ displayed. Revenue from advertisement is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates.
Sale of News & Publications, Waste Paper and Scrap
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Printing Job Work
Revenue from printing job work is recognized on the stage of completion of job work as per terms of the agreement. Revenue from job work is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Interest income
For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate (ElR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the Statement of Profit and Loss.
Dividends
Revenue is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Rental Income
Rental Income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms and is included in revenue in the Statement of Profit or Loss due to its operating nature unless either:
- Another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished, even if the rentals are not on that basis, or
- The rentals are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases. If rentals vary according to factors other than inflation, then this condition is not met.
e) Taxes Current income tax
Tax expense comprises 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.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised is 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 liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
In the situations where the Company is entitled to a Tax holiday under the Income Tax Act, 1961 enacted in India or Tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognised in respect of temporary differences which reverse during the tax holiday period, to the extent the Companyâs gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
GST/ value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of GST/ value added taxes paid, except:
- When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
f) Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
- Represents a separate major line of business or geographical area of operations,
- Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations
Or
- Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the Statement of Profit and Loss.
g) Property, plant and equipment
The Company has applied the one time transition option of considering the carrying cost of property, plant and equipment on the transition date i.e. April 1, 2015 as the deemed cost under Ind-AS.
Property, plant and equipment and Capital Work-in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for longterm construction projects if the recognition criteria are met.
Cost comprises the purchase price, borrowing costs if capitalization criteria are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Recognition:
The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful life. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation methods, estimated useful life and residual value
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
The Company, based on technical assessment made by the management depreciates certain assets over estimated useful life which are different from the useful life prescribed in Schedule ll to the Companies Act, 2013. The management has estimated, supported by technical assessment, the useful life of certain plant and machinery as 16 to 21 years. These useful life are higher than those indicated in schedule II. The management believes that these estimated useful life are realistic and reflect a fair approximation of the period over which the assets are likely to be used.
Depreciation on the property, plant and equipment is provided over the useful life of assets as specified in Schedule II to the Companies Act, 2013. Property, Plant and Equipment which are added/disposed off during the year, depreciation is provided on pro-rata basis with reference to the month of addition/deletion.
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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
Modification or extension to an existing asset, which is of capital nature and which becomes an integral part thereof is depreciated prospectively over the remaining useful life of that asset.
Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as a part of indirect construction cost to the extent the expenditure is related to construction or is incidental thereto. Other indirect costs incurred during-the construction periods which are not related to construction activity nor are incidental thereto are charged to Statement of Profit and Loss. Reinvested income earned during the construction period is adjusted against the total of indirect expenditure.
The residual values, useful life and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
h) Investments in associates
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.
The Company has elected to recognize its investments in associate companies at cost in accordance with the option available in Ind-AS 27, âSeparate Financial Statementsâ. Except where investments accounted for at cost shall be accounted for in accordance with Ind-AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.
i) Investment properties
Investment properties are properties (land and buildings) that are held for long-term rental yields and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The Company depreciates building component of investment property over 30 years from the date property is ready for possession.
Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Investment properties recognised as at 1st April 2015 measured as per the Indian GAAP and use that carrying value as the deemed cost of the Investment Properties.
Investment properties are derecognised 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 recognised in profit or loss in the period of de-recognition.
j) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Value for individual software license acquired from the holding Company in an earlier year is allocated based on the valuation carried out by an independent expert at the time of acquisition.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangible assets recognised as at 1st April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Intangible assets.
The useful life of intangible assets is assessed as either finite or indefinite.
Intangible assets with finite life 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. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite life is recognised in the Statement of Profit and Loss.
Intangible assets with indefinite useful life are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Intangible assets with finite life are amortized on straight line basis using the estimated useful life as follows:
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit or Loss when the asset is derecognised.
k) 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.
l) 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 fulfilment 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.
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the Statement of
Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Companyâs general policy on the borrowing costs (See note 2.1k).
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Leasehold improvements represent expenses incurred towards civil works, interiors furnishings, etc. on the leased premises at various locations.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.
Company as a lessor
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
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 straight line basis over the term of the relevant lease.
m) Inventories
Inventories are valued as follows :
Raw materials, 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 and finished goods: Lower of cost and net realizable value. Cost includes direct materials and a proportion of manufacturing overheads based on normal operating capacity. Cost is determined on a weighted average basis.
Scrap and waste papers: At net realizable value
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.
n) 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 unitâs (CGU) 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 groups 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.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded Companyâs or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companyâs CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover 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. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs 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 or Loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Intangible assets with indefinite useful life are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
o) 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 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.
p) Retirement and other employee benefits
Short term employee benefits and defined contribution plans:
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc. are recognised in the Statement of Profit and Loss in the period in which the employee renders the related service.
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 an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a defined benefit scheme. The defined benefit obligation is Computed by actuaries using the projected unit credit method.
The Company recognizes termination benefit as a liability and an expense when the Company has a present obligation as a result of 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. If the termination benefits fall due more than 12 months after the balance sheet date, they are measured at present value of future cash flows using the discount rate determined by reference to market yields at the balance sheet date on government bonds.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
- The date of the plan amendment or curtailment, and
- The date that the Company recognises related restructuring cost
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and nonroutine settlements; and
- Net interest expense or income
Compensated Absences
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.
Re-measurements, comprising of actuarial gains and losses, are immediately taken to the Statement of Profit and Loss and are not deferred. The Company presents the leave as a current liability 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 non- current liability.
q) Share-based payments
Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The Company has availed option under Ind-AS 101, to apply intrinsic value method to the options already vested before the date of transition and applied Ind-AS 102 Share-based payment to equity instruments that remain unvested as of transition date
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the 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 recognised as at the beginning and end of that period and is recognised in employee benefits expense. The SBP Scheme is administered through Employee Stock Option Trust.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companyâs best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be nonvesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
r) 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
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified into two categories:
- Debt instruments at amortised cost
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost 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 (SPPI) on the principal amount outstanding.
After initialmeasurement, such financialassets are subsequently measured at amortised cost using the effective interest rate (EIR) 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 and other receivables. For more information on receivables, refer to Note 10A.
Debt instruments at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss as âFinance income from mutual fundsâ under the head âOther Incomeâ.
Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading recognised by an acquirer in a business combination to which Ind-AS 103 applies are Ind-AS classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income 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.
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 P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
De-recognition
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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; 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.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind-AS 11 and Ind-AS 18 (referred to as âcontractual revenue receivablesâ in these financial statements)
The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
- Trade receivables or contract revenue receivables; and
- All lease receivables resulting from transactions within the scope of Ind- AS 17
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. 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.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
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.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss (P&L). This amount is reflected under the head âother expensesâ in the P&L. The balance sheet presentation for various financial instruments is described below:
- Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
For assessing increase in credit risk and impairment loss. The Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initialrecognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised 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 and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the Statement of Profit or Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the ElR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
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 ElR amortisation is included as finance costs in the Statement of Profit and Loss.
This category generally applies to borrowings. For more information refer Note 15A.
De-recognition
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 de-recognition 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 or Loss.
Embedded derivatives
An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative host contract - with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss.
If the hybrid contract contains a host that is a financial asset within the scope of Ind-AS 109, the Company does not separate embedded derivatives. Rather, it applies the classification requirements contained in Ind-AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss, unless designated as effective hedging instruments.
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.
s) Derivative financial instruments
Initial recognition and subsequent measurement
The Company uses derivative financialinstruments, such as forward currency contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The purchase contracts that meet the definition of a derivative under Ind-AS 109 are recognised in the Statement of Profit and Loss.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
t) Cash and cash equivalents
Cash and cash equivalent in the balance sheet 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
u) Cash dividend and non- cash distribution to equity holders of the parent
The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the Statement of Profit and Loss.
v) 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 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. The Company does not recognize a contingent liability but discloses its existence in the financial statements. Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity.
w) Measurement of EBITDA
The Company has elected to present earnings before interest expense, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the face of profit/ (loss) from continuing operations. In the measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.
x) Earnings per Share
Basic earnings per share
Basic earnings per share are 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.
Diluted earnings per share
Diluted earnings per share adjust 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, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
Mar 31, 2017
1. CORPORATE INFORMATION
Hindustan Media Ventures Limited (âHMVLâ or âthe Companyâ) is a Public Limited Company domiciled in India & incorporated under the provision of the Companies Act, 1913. Its shares are listed on Bombay Stock Exchange (BSE) & National Stock Exchange (NSE).
HT Media Limited (âHolding Companyâ) holds 74.30% of Equity Share Capital of the Company. The Company is engaged in the business of publishing âHindustanâ, a Hindi Daily, and two monthly Hindi magazines âNandanâ and âKadambaniâ. The registered office of the Company is located at Budh Marg, Patna- 800001.
Information on other related party relationships of the Company is provided in Note 34.
The financial statements of the Company for the year ended March 31, 2017 are authorized for issue in accordance with a resolution of the Board of Directors on May 18, 2017.
2. SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY COMPANY
2.1 Basis of preparation
The Standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (âInd-ASâ) notified under the Companies (Indian Accounting Standard) Rules, 2015 and Companies (Indian Accounting Standard) (Amendment) Rules, 2016.
For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the Accounting Standards notified under the Section 133 of the Companies Act, 2013 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 the Company has prepared in accordance with Ind-AS. Refer Note 45 on information on how the Company has adopted Ind-AS.
The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind-AS Balance Sheet as at April 1, 2015 being the date of transition to Ind-AS.
The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:
- Derivative financial instruments
- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments)
- Defined benefit plans - plan assets measured at fair value;
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
The Standalone financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency.
2.2 Summary of significant accounting policies
a) Current versus non- current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
Expected to be 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 equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
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 publishing of advertisement and circulation of newspaper and its realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
b) Foreign currencies Transactions and Balances
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. However, for practical reasons, the Company uses monthly average rate if the average approximates the actual rate at the date of the transaction.
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 the settlement of monetary items or on restatement of the Companyâs 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.
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.
c) Fair value measurement
The Company measures financial instruments, such as, derivatives and certain investments at fair value at each reporting/ 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, 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 â 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.
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.
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes :
Disclosures for valuation methods, significant estimates and assumptions (Note 37)
Quantitative disclosures of fair value measurement hierarchy (Note 37A)
Investment properties (Note 4)
Financial instruments (including those carried at amortized cost) (Note 37)
d) 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, regardless of when the payment is being made. 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.
Service tax, Sales tax and value added tax (VAT) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity 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
Advertisements
Revenue is recognized as and when advertisement is published/ displayed. Revenue from advertisement is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates.
Sale of News & Publications, Waste Paper and Scrap
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Printing Job Work
Revenue from printing job work is recognized on the stage of completion of job work as per terms of the agreement. Revenue from job work is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Interest income
For all debt instruments measured at amortized cost interest income is recorded using the effective interest rate (ElR). 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 (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.
Dividends
Revenue is recognized when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Rental Income
Rental Income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms and is
included in revenue in the statement of profit or loss due to its operating nature unless either:
- Another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished, even if the rentals are not on that basis, or
- The rentals are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases. If rentals vary according to factors other than inflation, then this condition is not met.
e) Taxes
Current income tax
Tax expense comprises 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.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income 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 liabilities are recognized for all taxable temporary differences.
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.
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. 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.
In the situations where the Company is entitled to a Tax holiday under the income Tax Act, 1961 enacted in India or Tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the Companyâs gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Sales/value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognized net of the amount of sales/ value added taxes paid, except:
When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable
When receivables and payables are stated with the amount of sales tax included
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
f) Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
Represents a separate major line of business or geographical area of operations,
Is part of a single co-ordinate plan to dispose of a separate major line of business or geographical area of operations
Or
Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit and loss.
Additional disclosures are provided in Note 30. All other notes to the financial statements mainly include amounts for continuing operations, unless otherwise mentioned.
g) Property, plant and equipment
The Company has applied the one time transition option of considering the carrying cost of property, plant and equipment on the transition date i.e. April 1, 2015 as the deemed cost under Ind-AS.
Property, plant and equipment and capital work-in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
Cost comprises the purchase price, borrowing costs if capitalization criteria are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Recognition:
The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
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. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation methods, estimated useful lives and residual value
The Company, based on technical assessment made by the management depreciates certain assets over estimated useful lives which are different from the useful life prescribed in Schedule ll to the Companies Act, 2013. The management has estimated, supported by technical assessment, the useful lives of certain plant and machinery as 16 to 21.06 years. These useful lives are higher than those indicated in Schedule II. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Depreciation on the property, plant and equipment is provided over the useful life of assets as specified in Schedule II to the Companies Act, 2013. Property, Plant and Equipment which are added/disposed off during the year, depreciation is provided on pro-rata basis with reference to the month of addition/deletion.
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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Modification or extension to an existing asset, which is of capital nature and which becomes an integral part thereof is depreciated prospectively over the remaining useful life of that asset.
Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as a part of indirect construction cost to the extent the expenditure is related to construction or is incidental thereto. Other indirect costs incurred during the construction periods which are not related to construction activity nor are incidental thereto are charged to Statement of Profit and Loss. Reinvested income earned during the construction period is adjusted against the total of indirect expenditure.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
h) Investments in associates
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.
The Company has elected to recognize its investments in associate companies at cost in accordance with the option available in Ind-AS 27, âSeparate Financial Statementsâ. Except where investments accounted for at cost shall be accounted for in accordance with Ind-AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.
Investments carried at cost will be tested for impairment as per Ind-AS 36.
i) Investment properties
Investment properties are properties (land and buildings) that are held for long-term rental yields and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The Company depreciates building component of investment property over 30 years from the date property is ready for possession.
Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer.
On transition to Ind-As, the Company has elected to continue with the carrying value of all of its investment properties recognized as at April 1, 2015 measured as per the Indian GAAP and use that carrying value as the deemed cost of the Investment Properties.
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 de-recognition.
j) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. 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.
Value for individual software license acquired from the holding company in an earlier year is allocated based on the valuation carried out by an independent expert at the time of acquisition.
On transition to Ind-As, the Company has elected to continue with the carrying value of all of its Intangible Assets recognized as at April 1, 2015 measured as per the Indian GAAP and use that carrying value as the deemed cost of the Intangible Assets.
The useful lives of intangible assets are assessed as either finite or indefinite.
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. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss.
Intangible assets with indefinite useful lives are not amortized , but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
k) 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.
l) 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.
For arrangements entered into prior to April 1, 2015, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Companyâs general policy on the borrowing costs (See note 2.1.k).
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Leasehold improvements represent expenses incurred towards civil works, interiors furnishings, etc. on the leased premises at various locations .
Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Company as a lessor
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
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 straight line basis over the term of the relevant lease.
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.
n) 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 unitâs (CGU) 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 groups 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.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded Companyâs or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companyâs CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover 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. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. 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 recognized for the asset in prior years. Such reversal is recognized in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
o) 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 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.
p) Retirement and other employee benefits
Short term employee benefits and defined contribution plans:
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc. are recognized in the statement of profit and loss in the period in which the employee renders the related service.
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 an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as
a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a defined benefit scheme. The defined benefit obligation is computed by actuaries using the projected unit credit method.
The Company recognizes termination benefit as a liability and an expense when the Company has a present obligation as a result of 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. If the termination benefits fall due more than 12 months after the balance sheet date, they are measured at present value of future cash flows using the discount rate determined by reference to market yields at the balance sheet date on government bonds.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of:
The date of the plan amendment or curtailment, and
The date that the Company recognizes related restructuring cost
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
Compensated Absences
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 period end. Re-measurements, comprising of actuarial gains and losses, are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability 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 noncurrent liability.
q) Share-based payments
Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The Company has availed option under Ind-AS 101 to apply intrinsic value method to the options already vested before the date of transition and applied Ind-AS 102 Share-based payment to equity instruments that remain unvested as of transition date.
That cost is recognized, together with a corresponding increase in share-based payment (SBP) reserves in
equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense 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 recognized in employee benefits expense.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companyâs best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be nonvoting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or nonvoting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
r) 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
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified into two categories:
Debt instruments at amortized cost
Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost 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 (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) 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 and other receivables. For more information on receivables, refer Note 10.
Debt instruments at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the 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 recognized by an acquirer in a business combination to which Ind-AS103 applies are Ind-AS classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income 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.
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 P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
De-recognition
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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; 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.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind-AS 11 and Ind-AS 18 (referred to as âcontractual revenue receivablesâ in these financial statements)
The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
Trade receivables or contract revenue receivables; and
All lease receivables resulting from transactions within the scope of Ind-AS 17
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. 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.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
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.
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. The balance sheet presentation for various financial instruments is described below:
Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
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 designated as hedging instruments in an effective hedge, 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 and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to Statement of Profit and Loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the Statement of Profit or Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the ElR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
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
ElR amortization is included as finance costs in the Statement of Profit and Loss.
This category generally applies to borrowings. For more information refer Note 15.
De-recognition
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 de-recognition 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 or Loss.
Embedded derivatives
An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative host contract - with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss.
If the hybrid contract contains a host that is a financial asset within the scope of Ind-AS 109, the Company does not separate embedded derivatives. Rather, it applies the classification requirements contained in Ind-AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes
in fair value recognized in profit or loss, unless designated as effective hedging instruments.
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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
s) Derivative financial instruments
Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The purchase contracts that meet the definition of a derivative under Ind-AS 109 are recognized in the statement of profit and loss.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
t) Cash and cash equivalents
Cash and cash equivalent in the balance sheet 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
u) Cash dividend and non- cash distribution to equity holders of the parent
The Company recognizes a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognized directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognized in the Statement of Profit and Loss.
v) 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 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. The Company does not recognize a contingent liability but discloses its existence in the financial statements. Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity.
w) Measurement of EBITDA
The Company has elected to present earnings before interest expense, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the face of profit/ (loss) from continuing operations. In the measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.
x) Earnings per Share
Basic earnings per share
Basic earnings per share are 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 and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust 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, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
Mar 31, 2016
1. CORPORATE INFORMATION
Hindustan Media Ventures Limited ("HMVL" or "the Company") is a Public Limited Company registered in India & incorporated under
the provision of the Companies Act, 1913. Its shares are listed on Bombay Stock Exchange (BSE) & National Stock Exchange (NSE).
HT Media Limited ("Holding Company") holds 74.30% of Equity Share Capital of the Company. The Company is engaged in the business
of publishing ''Hindustan'', a Hindi Daily, and two monthly Hindi magazines ''Nandan'' and ''Kadambani''.
2. BASIS OF PREPARATION
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to comply in all material aspects with the accounting
standards notified under Section 133 of the Companies Act 2013, read together with paragraph 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 adopted in the preparation of financial statements are consistent with those of previous year.
2.1 Summary of Significant accounting policies
a) Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent
liabilities, at the end of reporting period. Although these estimates are based upon management''s best knowledge of current
events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material
adjustment to the carrying amounts of assets or liabilities in future periods.
b) Tangible Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price,
borrowing costs if capitalization criteria are met and any directly attributable cost of bringing the asset to its working
condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Values of fixed assets acquired from the Parent Company in an earlier year are allocated based on valuation carried out by an
independent expert at the time of acquisition.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from
the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets,
including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of Profit and
Loss for the period during which such expenses are incurred.
Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc on the leased premises at
various locations.
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 MCA circular dated August 9, 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 foreign currency
borrowings to the extent they are regarded as an adjustment to the Interest cost and other exchange difference.
Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of Profit and Loss when the asset is derecognized.
The company identifies and determines cost of asset significant to the total cost of the asset having useful life that Is
materially different from that of the remaining life.
c) Depreciation on tangible fixed assets.
Leasehold Land is amortized on a straight-line basis over the primary period of lease ranging between 68-92 years.
Leasehold Improvements are amortized on a straight-line basis over the useful life of upto 10 years or unexpired period of lease
(whichever is lower) on a straight line basis.
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives
estimated by the management. The identified components are depreciated over their useful lives; the remaining asset is
depreciated over the life of the principal asset. The company has used the following rates to provide depreciation on its fixed
assets:
The management has estimated, supported by technical assessment, the useful lives of certain plant and machinery as 16 to 21.06
years. These lives are higher than those indicated in schedule II.
d) Intangible assets and Amortization
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.
Value for individual software license acquired from the holding company in an earlier year is allocated based on the valuation
carried out by an independent expert at the time of acquisition.
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. Such intangible assets and intangible assets not yet
available for use 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.
Software licenses acquired from the holding company, which are estimated to have lower residual lives than that envisaged above,
are amortised over such estimated lower residual lives.
Intangible assets not yet available for use 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.
The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life
of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has
been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to
reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior
Period Items and Changes in Accounting Policies.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of Profit and Loss when the asset is
derecognized.
The summary of amortization policies applied by the Company on its intangible assets is as below:
e) Leases
Where the Company is the lessee
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the
leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present
value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized
as finance cost in the statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of
lease are capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable
certainty that the Company will obtain the ownership by the end of the lease term, the capitalized leased assets are depreciated
on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
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 statement of profit and loss on a
straight-line basis over the lease term.
Where the Company is lessor
Leases in which the company transfers substantially all the risks and benefits of ownership of the asset are classified as
finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the
lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as
to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest
income is recognized in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are
recognized immediately in the statement of profit and loss.
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 plant, property and equipment. Lease income on an
operating lease is recognized in the statement of profit and loss on a straight- line basis over the lease term. Costs, including
depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs,
brokerage costs, etc. are recognized immediately in the statement of profit and loss.
f) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and
exchange differences arising from foreign currency borrowings, other than arising on long term foreign currency monetary items,
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 the cost of the respective asset.
All other borrowing costs are expensed in the period they occur.
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 the cash-generating unit''s
(CGU) net selling price and 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.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of Profit and
Loss.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
h) Investments
Investments, which are readily realizable 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 diminution in value is made to recognize a
decline other than temporary in the value of the 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.
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.
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. The following specific recognition criteria must also be met before revenue is recognized:
Advertisements
Revenue is recognized as and when advertisement is published / displayed and is disclosed net of discounts.
Sale of News & 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/ Income from investments
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Income on
investments made in the units of mutual funds is recognized based on the yield earned and to the extent of its reasonable
certainty. Interest Income is included under the head "Other Income" in the statement of profit and loss.
Commission Income
Commission income from sourcing of advertisement orders on behalf of other entities'' publications is recognized on printing of
the advertisement in those publications.
Dividend Income
Dividend income is recognized when the Company''s right to receive the dividend is established by the reporting date.
k) Foreign currency translation
(i) 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 prevailing at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. 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. 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.
(iii) Exchange Differences
The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:
1. Exchange differences arising on long- term foreign currency monetary items related to acquisition of a Axed asset are
capitalized and depreciated over the remaining useful life ofthe asset.
2. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency
Monetary Item Translation Difference Account" and amortized over the remaining life ofthe concerned monetary item.
3. All other exchange differences are recognized as income or as expenses in the period in which they arise.
For the purpose of 1 and 2 above, the company treats a foreign 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 MCA circular dated August 9, 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 foreign currency borrowings to the
extent they are regarded as an adjustment to the interest cost and other exchange difference.
(iv) 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 amortized and recognized as an expense/ income
over the life of the contract. Exchange differences on such contracts, except the contracts which are long- term foreign
currency monetary items, are recognized 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 recognized as income or as expense
for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in
accordance with paragraph (iii)(1) and (iii)(2).
I) Retirement and other employee benefits
(i) Retirement benefits in the form of Provident Fund and Pension Schemes are defined contribution schemes and the contributions
are charged to the statement of Profit and Loss for the year when an employee renders the related service. There are no other
obligations other than the contribution payable to the respective funds. If the contribution payable to the scheme for service
received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as
a liability after deducting the contribution a I ready paid. If the contribution already paid exceeds the contribution due for
services received before the balance sheet date, then excess is recognized as an asset to the extent that the prepayment will
lead to, for example, a reduction in future payment or a cash refund.
(ii) Gratuity is a defined benefit plan. The cost of providing benefits under the plan is determined on the basis of actuarial
valuation at eachyear-end using the projected unit credit method and is contributed to Gratuity Fund created by the Company.
Actuarial gains and losses are recognized in full in the period in which they occur in the statement of Profit and Loss.
(iii) 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. Actuarial gains/losses are immediately taken to the statement of Profit and Loss and are not
deferred. The Company presents the entire leave as current liability in the balance sheet, since it does not have an
unconditional right to defer its settlement for 12 months after the reporting date.
m) Provisions
A provision is recognized when the Company has a present obligation as a result of past event and 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. Provisions are not discounted to their present value and are determined based on best estimate
required to settle the obligation at the reporting date. These are reviewed at each reporting date and are adjusted to reflect
the current best estimates.
n) Income Taxes
Tax expense comprises 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 and tax laws prevailing in the respective tax
jurisdictions, where the company operates. The tax rates and the tax laws used to compute the amount are those that are enacted
or substantively enacted at the reporting date.
Deferred Income-taxes reflects the impact of timing differences between taxable income and accounting income originating during
the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the
tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible
timing differences 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 realized. In situations where the Company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
In the situations where the company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws
prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect
of timing differences which reverse during the tax holiday period, to the extent the company''s gross total income is subject to
the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday
period is recognized in the year in which the timing differences originate. However, the company restricts recognition of
deferred tax assets 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. For recognition of deferred
taxes, the timing differences which originate first are considered to reverse first.
At each reporting date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets
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 realized. 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.
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 tax assets and deferred tax liabilities relate to the same taxable entity and
same taxation authority.
o) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the reporting period attributable to equity
shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the
reporting period. The weighted average numbers of equity shares outstanding during the reporting 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) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the reporting period attributable to equity
shareholders and the weighted average number of shares outstanding during the reporting period are adjusted for the effects of
all dilutive potential equity shares.
p) Employee Stock Compensation Cost
Employees (including senior executives) of the company receive remuneration in the form of share based payment transactions,
whereby employees render services as consideration for equity instruments (equity-settled transactions).
Measurement and disclosure of the employee share- based payment plans is done 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, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee
stock options using the intrinsic value method. 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 Company''s best estimate
of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and
loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is
recognized in employee benefit scheme. Compensation cost is amortized over the vesting period of the option on a straight line
basis.
q) Cash and Cash equivalents
Cash and Cash equivalents for the purposes of cash flow statement comprise cash in hand and at bank, cheques-in-hand and
short-term investments with an original maturity of three months or less.
r) Expenses incurred on Initial Public Offer (IPO) Expenses incurred in Initial Public Offer are adjusted against the securities
premium account.
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
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. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
t) Derivatives instruments
The Company uses derivative financial instruments, such as, foreign currency forward contracts to hedge foreign currency risk
arising from future transactions in respect of which Arm commitments are made or which are highly probable forecast transactions.
It also uses interest rate swaps to hedge interest rate risk arising from variable rate loans. As per the ICAI Announcement,
derivative contracts, other than those covered under Accounting Standard-11, are accounted on the basis of hedging principles to
the extent that the same does not conflict with the existing mandatory accounting standards, other Authoritative pronouncements
and other regulatory requirements.
u) Measurement of EBITDA
The Company has elected to present earnings before interest expense, tax, depreciation and amortization (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/ (loss) from
continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and
tax expense.
Mar 31, 2015
A) Change in accounting policy:
Depreciation on fixed assets
Till the year ended 31 March 2014, Schedule XIV to the Companies Act,
1956, prescribed requirements concerning depreciation of fixed assets.
From the current year, Schedule XIV has been replaced by Schedule II to
the Companies Act, 2013. The applicability of Schedule II has resulted
in the following changes related to depreciation of fixed assets.
Useful lives/ depreciation rates
Till the year ended 31 March 2014, depreciation rates prescribed under
Schedule XIV were treated as minimum rates and the company was not
allowed to charge depreciation at lower rates even if such lower rates
were justified by the estimated useful life of the asset.Schedule II to
the Companies Act 2013 prescribes useful lives for fixed assets which,
in many cases, are different from lives prescribed under the erstwhile
Schedule XIV. However, Schedule II allows companies to use higher/lower
useful lives and residual values if such useful lives and residual
values can be technically supported and justification for difference is
disclosed in the financial statements.
Considering the applicability of Schedule II, the management has
re-estimated useful lives and residual values of all its fixed assets.
Accordingly, the management based on technical assessment of the life
of the existing assets has revised the useful lives of certain fixed
assets. The company has used transitional provisions of Schedule II to
adjust the impact of change in remaining useful life of the asset
arising on its first application. If an asset has zero remaining useful
life on the date of Schedule II becoming effective, i.e., 1 April 2014,
its carrying amount, after retaining any residual value, net of
deferred tax impact, is charged to the opening balance of retained
earnings. The carrying amount of other assets, i.e., assets whose
remaining useful life is not nil on 1 April 2014, is depreciated over
their remaining useful life. Accordingly, the Company has charged Rs.
77.28 lacs to the opening balance of retained earnings.
The management believes that depreciation rates currently used with
respect to the fixed assets except for those mentioned above, fairly
reflect its estimate of the useful lives and residual values of fixed
assets, though these rates in certain cases are different from lives
prescribed under Schedule II.
Had the company continued to use the earlier policy of depreciating
fixed asset, the profit after tax for the current period would have
been higher by Rs. 127.94 lacs (net of tax impact of Rs. 67.71 lacs),
retained earnings at the beginning of the current period would have
been higher by Rs. 77.28 lacs (net of tax impact of Rs. 39.79 lacs)
and the written down value of fixed asset would correspondingly have
been higher by Rs. 312.72 lacs.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities, at the end of reporting period.
Although these estimates are based upon management''s best knowledge of
current events and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
c) Tangible Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price, borrowing
costs if capitalization criteria are met and any directly attributable
cost of bringing the asset to its working condition for the intended
use. Any trade discounts and rebates are deducted in arriving at the
purchase price.
Values of fixed assets acquired from the Parent Company in an earlier
year are allocated based on valuation carried out by an independent
expert at the time of acquisition.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of Profit and Loss for the period during which
such expenses are incurred.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
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 MCA circular dated 09 August 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
foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost and other exchange difference.
Gains or losses arising from derecognition of fixed assets 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.
d) Depreciation on tangible fixed assets
Leasehold Land is amortized on a straight-line basis over the primary
period of lease ranging between 68- 92 years.
Leasehold Improvements are amortized on a straight- line basis over the
useful life of upto 10 years or unexpired period of lease (whichever is
lower) on a straight line basis.
Depreciation on fixed assets is calculated on straight-line basis using
the rates arrived at based on the useful lives estimated by the
management.
The company has used the following rates to provide depreciation on its
fixed assets.
Type of asset Useful lives
estimated by the
management
(years)
Plant and Machinery 2-20
Buildings (Factory) 16-30
Buildings 60
(other than factory buildings)
Furniture and Fittings 2-10
IT Equipments 2-6
Office Equipment 2-5
Vehicles 8
The management has estimated, supported by technical assessment, the
useful lives of certain plant and machinery as 16 to 20 Years. These
lives are higher than those indicated in schedule II.
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.
Value for individual software license acquired from the holding company
in an earlier year is allocated based on the valuation carried out by
an independent expert at the time of acquisition.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. A summary of amortization policies
applied by the Company on its intangible assets is as below:
Intangible Assets Useful life (in years)
Website Development 6
Software Licenses 5-6
Software licenses acquired from the holding company, which are
estimated to have lower residual lives than that envisaged above, are
amortised over such estimated lower residual lives.
Intangible assets not yet available for use 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.
The amortization period and the amortization method are reviewed at
least at each financial year end. If the expected useful life of the
asset is significantly different from previous estimates, the
amortization period is changed accordingly. If there has been a
significant change in the expected pattern of economic benefits from
the asset, the amortization method is changed to reflect the changed
pattern. Such changes are accounted for in accordance with AS 5 Net
Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies.
Gains or losses arising from de-recognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
Profit and Loss when the asset is derecognized.
f) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is directly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which is not related to the
construction activity nor is incidental thereto is charged to the
statement of Profit and Loss. Income earned during construction period
is adjusted against the total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originally assessed standard of performance.
g) Leases ( Where the Company is the lessee) Finance leases, which
effectively transfer to the Company substantially all the risks and
benefits incidental to ownership of the leased item, are capitalized at
the inception of the lease term at the lower of the fair value of the
leased property and present value of the minimum lease payments. Lease
payments are apportioned between the finance charges and reduction of
the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognized as
finance cost in the statement of Profit and Loss. Lease management
fees, legal charges and other initial direct costs of lease are
capitalised. A leased asset is depreciated on a straight-line basis
over the useful life of the asset. However, if there is no reasonable
certainty that the Company will obtain the ownership by the end of the
lease term, the capitalized leased assets are depreciated on a
straight-line basis over the shorter of the estimated useful life of
the asset or the lease term.
Lease 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 statement of Profit and Loss on a straight-line basis over the
lease term.
h) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings, other than
arising on long term foreign currency monetary items, 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 the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
i) 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 the cash-generating unit''s (CGU) net
selling price and 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.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
j) Investments
Investments, which are readily realizable 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 of 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
diminution in value is made to recognize a decline other than temporary
in the value of the 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.
k) Inventories
Inventories are valued as follows:
Raw materials, components,stores and spares
Lower of cost and net realizable value. However, material and other
item 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 and finished goods
Lower of cost and net realizable value. Cost includes direct materials
and a portion of manufacturing overheads based on normal operating
capacity. Cost is determined on a weighted average basis.
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.
l) 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. The following specific recognition criteria must
also be met before revenue is recognized:
Advertisements
Revenue is recognized as and when advertisement is published /
displayed and is disclosed net of discounts.
Sale of News & 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/ Income from investments
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable. Income on investments
made in the units of mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Commission Income
Commission income from sourcing of advertisement orders on behalf of
other entities'' publications is recognized on printing of the
advertisement in those publications.
Dividend Income
Dividend income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
m) Foreign currency transactions
(i) 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 prevailing at the date of
the transaction.
(ii) Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. 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.
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.
(iii) Exchange Differences:
The Company accounts for exchange differences arising on translation/
settlement of foreign currency monetary items as below:
1) Exchange differences arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalized and
depreciated over the remaining useful life of the asset.
2) Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortized over the remaining life
of the concerned monetary item.
3) All other exchange differences are recognized as income or as
expenses in the period in which they arise.
For the purpose of 1 and 2 above, the company treats a foreign 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
MCA circular dated 09 August 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 foreign
currency borrowings to the extent they are regarded as an adjustment to
the interest cost and other exchange difference.
(iv) 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 amortized and recognized as an expense/ income over the
life of the contract. Exchange differences on such contracts, except
the contracts which are long-term foreign currency monetary items, are
recognized 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 recognized as
income or as expense for the period. Any gain/ loss arising on forward
contracts which are long-term foreign currency monetary items is
recognized in accordance with paragraph (iii)(1) and (iii)(2).
n) Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes and the contributions are
charged to the statement of Profit and Loss for the year when an
employee renders the related service. There are no other obligations
other than the contribution payable to the respective funds.
ii. Gratuity is a defined benefit plan. The cost of providing benefits
under the plan is determined on the basis of actuarial valuation at
each year- end using the projected unit credit method and is
contributed to Gratuity Fund created by the Company. Actuarial gains
and losses are recognized in full in the period in which they occur in
the statement of Profit and Loss.
iii. 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. Actuarial gains/losses are immediately taken to the statement
of Profit and Loss and are not deferred. The Company presents the
entire leave as current liability in the balance sheet, since it does
not have as unconditional right to defer its settlement for 12 months
after the reporting date.
o) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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.
Provisions are not discounted to their present value and are determined
based on best estimate required to settle the obligation at the
reporting date. These are reviewed at each reporting date and are
adjusted to reflect the current best estimates.
p) Income Taxes
Tax expense comprises 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 and tax laws
prevailing in the respective tax jurisdictions, where the company
operates. The tax rates and the tax laws used to compute the amount are
those that are enacted or substantively enacted at the reporting date.
Deferred Income-taxes reflects the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences 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 realized.In situations where the Company has
unabsorbed depreciation or carry forward tax losses, all deferred tax
assets are recognized only if there is virtual certainty supported by
convincing evidence that they can be realized against future taxable
profits.
At each reporting date the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets 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
realized. 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.
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 tax assets and deferred tax
liabilities relate to the same taxable entity and same taxation
authority.
q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the reporting period attributable to equity shareholders
(after deducting attributable taxes) by the weighted average number of
equity shares outstanding during the reporting period. The weighted
average numbers of equity shares outstanding during the reporting
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) that have changed the number of equity
shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the reporting period attributable to equity
shareholders and the weighted average number of shares outstanding
during the reporting period are adjusted for the effects of all
dilutive potential equity shares.
r) Employee Stock Compensation Cost
Employees (including senior executives) of the company receive
remuneration in the form of share based payment transactions, whereby
employees render services as consideration for equity instruments
(equity-settled transactions).
Measurement and disclosure of the employee share-based payment plans is
done in accordance with the Securities and Exchange Board of India
(Share Based Employee Benefits Regulatory 2014) and 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. 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 Company''s best estimate of the number of equity instruments that
will ultimately vest. The expense or credit recognized in the statement
of profit and loss for a period represents the movement in cumulative
expense recognized as at the beginning and end of that period and is
recognized in employee benefit scheme. Compensation cost is amortized
over the vesting period of the option on a straight line basis.
s) Cash and Cash equivalents
Cash and Cash equivalents for the purposes of cash flow statement
comprise cash in hand and at bank, cheques-in-hand and short-term
investments with an original maturity of three months or less.
t) Expenses incurred on Initial Public Offer (IPO) Expenses incurred in
Initial Public Offer are adjusted against the securities premium
account.
u) 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 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. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
v) Measurement of EBITDA
The Company has elected to present earnings before interest expense,
tax, depreciation and amortization (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/ (loss) from continuing operations. In
its measurement, the Company does not include depreciation and
amortization expense, finance costs and tax expense.
Mar 31, 2014
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, 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 of the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
b. Tangible Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price, borrowing
costs if capitalization criteria are met and any directly attributable
cost of bringing the asset to its working condition for the intended
use. Any trade discounts and rebates are deducted in arriving at the
purchase price.
Values of fixed assets acquired from the Parent Company in an earlier
year are allocated based on valuation carried out by an independent
expert at the time of acquisition.
Subsequent expenditure related to an item of fixed asset is added to its
book value only if it increases the future benefits from the existing
asset beyond its previously assessed standard of performance. All other
expenses on existing fixed assets, including day-to-day repair and
maintenance expenditure and cost of replacing parts, are charged to the
statement of Profit and loss for the period during which such expenses
are incurred.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
c. Depreciation
Leasehold Land is amortized on a straight-line basis over the primary
period of lease ranging between 65-90 years.
Leasehold Improvements are amortized on a straight-line basis over the
useful life of upto 10 years or unexpired period of lease (whichever is
lower) on a straight line basis.
Depreciation on assets (except for those acquired from holding company)
are provided on Straight Line Method at the rates computed based on
estimated useful life of the asset, which are greater than or equal the
corresponding rates prescribed in Schedule XIV to the Companies Act,
1956 as mentioned below :
In respect of fixed assets acquired from the holding company in an
earlier year, depreciation is provided on Straight Line basis at rates
as per the useful lives of the assets estimated by an independent
valuer or the corresponding rates prescribed in Schedule XIV of the
Companies Act, 1956, whichever is higher.
Assets costing below Rs5,000 each, are fully depreciated in the year of
acquisition.
d. Intangible assets and amortisation
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.
Value for individual software license acquired from the holding company
in an earlier year is allocated based on the valuation carried out by
an independent expert at the time of acquisition.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. A summary of amortization policies
applied by the Company on its intangible assets is as below:
Software licenses acquired from the holding company, which are
estimated to have lower residual lives than that envisaged above, are
amortised over such estimated lower residual lives.
Software licenses costing below Rs5,000 each are fully depreciated in
the year of acquisition.
Intangible assets not yet available for use 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.
The amortization period and the amortization method of the Intangible
assets are reviewed at each financial year end for its expected useful
life if there is a significant change in the expected useful life or the
expected pattern of economic benefits, the amortization period/ method
is adjusted to refect the change. Such changes are accounted for in
accordance with AS 5 Net Profit or Loss for the Period, Prior Period
Items and Changes in Accounting Policies.
Gains or losses arising from de-recognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the Statement of
Profit and Loss when the asset is derecognized.
e. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect
construction cost to the extent to which the expenditure is directly
related to construction or is incidental thereto. Other indirect
expenditure (including borrowing costs) incurred during the
construction period, which is not related to the construction activity
nor is incidental thereto is charged to the Statement of Profit and
Loss. Income earned during construction period is adjusted against the
total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originally assessed standard of performance.
f. Leases ( Where the Company is the lessee)
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of the minimum
lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance charges are recognized as finance cost in the Statement of Profit
and Loss. Lease management fees, legal charges and other initial direct
costs of lease are capitalised.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset or the useful life envisaged in Schedule XIV to the
Companies Act, 1956, whichever is lower. However, if there is no
reasonable certainty that the Company will obtain the ownership by the
end of the lease term, the capitalized leased assets are depreciated on
a straight-line basis over the shorter of the estimated useful life of
the asset, the lease term or the useful life envisaged in Schedule XIV
to the Companies Act, 1956.
Lease where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classifed 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.
g. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings, other than
arising on long term foreign currency monetary items, 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 the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
h. Impairment
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 the cash-generating unit''s (CGU) net
selling price and 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 refects 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.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
i. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classifed as current investments. All other investments are
classifed 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.
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
diminution in value is made to recognize a decline other than temporary
in the value of the 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.
j. Inventories
Inventories are valued as follows:
Raw
materials, 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 fnished 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. Cost is determined on a weighted average basis.
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 fow 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 News & 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/ Income from investments
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable. Income on investments
made in the units of mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Commission Income
Commission income from sourcing of advertisement orders on behalf of
other entities'' publications is recognized on printing of the
advertisement in those publications.
Dividend Income
Dividend income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
l. 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 prevailing at the date of
the transaction.
Conversion
Foreign currency monetary items are reported using the exchange rate
prevailing at the reporting date. 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.
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, 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 amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized 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 recognized as income or as expense for the year.
m. Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund and Pension Schemes
are Defined contribution schemes and the contributions are charged to
the Statement of Profit and Loss for the year when an employee renders
the related service. There are no other obligations other than the
contribution payable to the respective funds.
ii. Gratuity is a Defined benefit plan. The cost of providing benefits
under the plan is determined on the basis of actuarial valuation at
each year-end using the
projected unit credit method and is contributed to Gratuity Fund
created by the Company. Actuarial gains and losses are recognized in
full in the period in which they occur in the Statement of Profit and
Loss.
iii. 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. Actuarial gains/ losses are immediately taken to the
Statement of Profit and Loss and are not deferred. The Company presents
the entire leave as current liability in the balance sheet, since it
does not have as unconditional right to defer its settlement for 12
months after the reporting date.
n. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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 their
present value and are determined based on best estimate required to
settle the obligation at the reporting date. These are reviewed at each
reporting date and are adjusted to refect the current best estimates.
o. Income Taxes
Tax expense comprises 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 and tax laws
prevailing in the respective tax jurisdictions, where the company
operates. The tax rates and the tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting
date.
Deferred Income-taxes refects the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
suffcient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profits.
At each reporting date the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain or virtually certain, as
the case may be, that suffcient 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 suffcient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
suffcient future taxable income will be available.
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 tax assets and deferred tax
liabilities relate to the same taxable entity and same taxation
authority.
p. Earnings Per Share
Basic earnings per share are calculated by dividing the net Profit or
loss for the reporting period attributable to equity shareholders
(after deducting attributable taxes) by the weighted average number of
equity shares outstanding during the reporting period. The weighted
average numbers of equity shares outstanding during the reporting
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) that have changed the number of equity
shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
Profit or loss for the reporting period attributable to equity
shareholders and the weighted average number of shares outstanding
during the reporting period are adjusted for the effects of all
dilutive potential equity shares.
q. Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and 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. The cumulative expense recognized for equity-settled
transactions at each reporting date until the vesting date refects 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 recognized in the statement of Profit and Loss for
a period represents the movement in cumulative expense recognized as at
the beginning and end of that period and is recognized in employee
benefit scheme. Compensation cost is amortized over the vesting period
of the option on a straight line basis.
r. Cash and Cash equivalents
Cash and Cash equivalents for the purposes of cash fow statement
comprise cash in hand and at bank, cheques-in- hand and short-term
investments with an original maturity of three months or less.
s. Expenses incurred on Initial Public Offer (IPO)
Expenses incurred in Initial Public Offer are adjusted against the
securities premium account.
t. 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 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. The Company does
not recognize a contingent liability but discloses its existence in the
financial statements.
u. 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 expense, tax, depreciation and amortization (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/ (loss) from continuing
operations. In its measurement, the Company does not include
depreciation and amortization expense, finance costs and tax expense.
(b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of
Rs10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2014, the amount of per share dividend
proposed as distribution to equity shareholders was Rs1.20 (Previous
Year Rs1.20).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(c) Shares held by holding/ ultimate holding Company and/ or their
subsidiaries/ associates
Out of the equity shares issued by the Company, shares held by its
holding company is as below:
As per the records of the company, including its register of
shareholders/members and other declaration received from the
shareholders regarding beneficial interest, the above shareholding
represents both legal and beneficial ownerships of shares.
(f) Shares reserved for issue under options
For details of share reserved for issue under Employees Stock Option
Plan (ESOP) of the Company, refer note 38.
1. Buyer''s Credit from HDFC is secured by way of First charge on all
present and future current assets including stock of raw material, semi
fnished & fnished goods, consumable stores and spares and other such
movable including book debts, bills (Documentary/Clean), outstanding
monies, receivables, both present and future, of the Company.
2. Buyer''s Credit from Yes Bank is secured by way of frst pari-passu
charge on all current assets of the borrower including stocks of raw
materials, semi fnished and fnished goods, consumable stores and spares
and such other movable including book debts, bills (documentary/
clean), outstanding monies, receivables, both present and future.
* These Investments are pledged in favour of Deutsche Bank for
Overdraft Facility.
** These Investments are pledged in favour of BNP Paribas Bank for
Overdraft Facility.
# Classified as current portion of long term investments during the
year.
Mar 31, 2013
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, 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 of the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
b. Tangible Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price, borrowing
costs if capitalization criteria are met and any directly attributable
cost of bringing the asset to its working condition for the intended
use. Any trade discounts and rebates are deducted in arriving at the
purchase price.
Values of fixed assets acquired from the Parent Company in an earlier
year are allocated based on fair valuation carried out by an
independent expert.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
AH other expenses on existing fixed assets, including day-to-day repair
and maintenance expenditure and cost of replacing parts, are charged to
the statement of profit and loss for the period during which such
expenses are incurred.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
c. Depreciation
Leasehold Land is amortised on a straight-line basis over the primary
period of lease which is between 65-90 years.
Leasehold Improvements are amortized over the useful life of upto 10
years or unexpired period of lease (whichever is lower) on a straight
line basis.
In respect of fixed assets acquired from the holding company in an
earlier year, depreciation is provided at rates as per the useful lives
of the assets estimated by an independent valuer. These rates, as
mentioned below, are greater than or equal to the corresponding rates
prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on assets (except for those acquired from holding company)
are provided on Straight Line Method at the rates computed based on
estimated useful life of the asset, which are equal to or greater than
the corresponding rates prescribed in Schedule XIV to the Companies
Act, 1956.
Assets costing below Rs.5,000 each, are fully depreciated in the year
of acquisition.
d. 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.
Value for individual software license acquired from the holding company
in an earlier year is allocated based on the valuation carried out by
an independent expert.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
A summary of amortization policies applied by the Company on its
intangible assets is as below:
Software licenses costing below Rs.5,000 each are fully depreciated in
the year of acquisition.
Intangible assets not yet available for use are tested for impairment
annually, either individually or at the cash- generating unit level. AH
other intangible assets are assessed for impairment whenever there is
an indication that the intangible asset may be impaired.
The amortization period and the amortization method of the Intangible
assets are reviewed at each financial year end for its expected useful
life if there is a significant change in the expected useful life or
the expected pattern of economic benefits, the amortization period/
method is adjusted to reflect the change. Such changes are accounted
for in accordance with AS 5 Net Profit or Loss for the Period, Prior
Period Items and Changes in Accounting Policies.
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.
Software licenses acquired from the holding company, which are
estimated to have lower residual lives than that envisaged above, are
amortised over such estimated lower residual lives.
e. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which is not related to the
construction activity nor is incidental thereto is charged to the
statement of Profit & Loss. Income earned during construction period
is adjusted against the total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originally assessed standard of performance.
f. Leases (Where the Company is the lessee)
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of the minimum
lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance charges are recognized as finance cost in the statement of
profit & loss. Lease management fees, legal charges and other initial
direct costs of lease are capitalised.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset or the useful life envisaged in Schedule XIV to the
Companies Act, 1956, whichever is lower. However, if there is no
reasonable certainty that the Company will obtain the ownership by the
end of the lease term, the capitalized leased assets are depreciated on
a straight-line basis over the shorter of the estimated useful life of
the asset, the lease term or the useful life envisaged in Schedule XIV
to the Companies Act, 1956.
Lease 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 statement of profit and loss on a straight-line basis over the
lease term.
g. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement 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 the cost of the respective asset. AH other borrowing costs are
expensed in the period they occur.
h. Impairment
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 the cash-generating unit''s
(CGU) net selling price and 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.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
i. Investments
Investments, which are readily realizable 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. AH 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.
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
diminution in value is made to recognize a decline other than temporary
in the value of the 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.
j. Inventories
Inventories are valued as follows:
Raw materials, 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. Cost is determined on a weighted
average basis.
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 News K 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/ Income from investments Revenue is recognized on a time
proportion basis taking into account the amount outstanding and the
rate applicable. Income on investments made in the units of mutual
funds is recognized based on the yield earned and to the extent of its
reasonable certainty.
Commission Income
Commission income from sourcing of advertisement orders on behalf of
other entities'' publications is recognized on printing of the
advertisement in those publications.
Dividend Income
Dividend income is recognized when the Company''s right to receive the
dividend is established by the reporting 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 prevailing at the date of
the transaction.
Conversion
Foreign currency monetary items are reported using the exchange rate
prevailing at the reporting date. 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.
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, 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 amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized 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 recognized as income or as expense for the
year.
m. Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes and the contributions are
charged to the statement of profit and loss for 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.
ii. Gratuity is a defined benefit plan. The cost of providing benefits
under the plan is determined on the basis of actuarial valuation at
each year-end using the projected unit credit method and is contributed
to Gratuity Fund created by the Company. Actuarial gains and losses are
recognized in full in the period in which they occur in the statement
of profit and loss.
iii. 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. Actuarial gains/ losses are immediately taken to the
statement of profit and loss and are not deferred. The Company presents
the entire leave as current liability in the balance sheet, since it
does not have as unconditional right to defer its settlement for 12
months after the reporting date.
n. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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 their
present value and are determined based on best estimate required to
settle the obligation at the reporting date. These are reviewed at each
reporting date and are adjusted to reflect the current best estimates.
o. Income Taxes
Tax expense comprises 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 and tax laws
prevailing in the respective tax jurisdictions, where the company
operates. The tax rates and the tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting
date.
Deferred Income-taxes reflects the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax Laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences 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 realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profits.
At each reporting date the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets 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
realized. 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.
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 tax assets and deferred tax
liabilities relate to the same taxable entity and same taxation
authority.
p. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the reporting period attributable to equity shareholders
(after deducting attributable taxes) by the weighted average number of
equity shares outstanding during the reporting period. The weighted
average numbers of equity shares outstanding during the reporting
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) that have changed the number of equity
shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the reporting period attributable to equity
shareholders and the weighted average number of shares outstanding
during the reporting period are adjusted for the effects of all
dilutive potential equity shares.
q. Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and 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. 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 Company''s best
estimate of the number of equity instruments that will ultimately vest.
The expense or credit recognized in the statement of profit and loss
for a period represents the movement in cumulative expense recognized
as at the beginning and end of that period and is recognized in
employee benefit scheme. Compensation cost is amortized over the
vesting period of the option on a straight line basis.
r. Cash and Cash equivalents
Cash and Cash equivalents for the purposes of cash flow statement
comprise cash in hand and at bank, cheques-in- hand and short-term
investments with an original maturity of three months or less.
s. Expenses incurred on Initial Public Offer (IPO)
Expenses incurred in Initial Public Offer are adjusted against the
securities premium account.
t. 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 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. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
u. 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 amortization (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/ (loss) from continuing
operations. In its measurement, the Company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2012
A. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended 31 March 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. Except
accounting for dividend on investments in subsidiary companies, 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
requirements applicable in the current year.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, 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 of the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
c. Tangible Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price,
borrowing costs if capitalization criteria are met and any directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Values of fixed assets acquired from the Parent Company in an earlier
year are allocated based on fair valuation carried out by an
independent expert.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to- day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
d. Depreciation
Leasehold Land is amortised on a straight-line basis over the primary
period of lease which is between 65-90 years.
Leasehold Improvements are amortized over the useful life of upto 10
years or unexpired period of lease (whichever is lower) on a straight
line basis.
In respect of fixed assets acquired from the Holding Company in an
earlier year, depreciation is provided at rates as per the useful lives
of the assets estimated by an independent valuer. These rates, as
mentioned below, are greater than or equal to the corresponding rates
prescribed in Schedule XIV of the Companies Act, 1956.
on Straight Line Method at the rates computed based on estimated useful
life of the asset, which are equal to or greater than the corresponding
rates prescribed in Schedule XIV to the Companies Act, 1956.
Assets costing below Rs.5,000 each, are fully depreciated in the year of
acquisition.
e. Intangibles
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.
Value for individual software license acquired from the Holding Company
in an earlier year is allocated based on the valuation carried out by
an independent expert.
Intangible assets are amortized on a straight line basis overthe
estimated useful economic life. Intangible assets not yet available
for use 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.
The amortization period and the amortization method of the Intangible
assets are reviewed at each financial year end for its expected useful
life if there is a significant change in the expected useful life or
the expected pattern of economic benefits, the amortization period/
method is adjusted to reflect the change. Such changes are accounted
for in accordance with AS 5 Net Profit or Loss for the Period, Prior
Period Items and Changes in Accounting Policies.
Gains or losses arising from de recognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
Software licenses acquired from the Holding Company, which are
estimated to have lower residual lives than that envisaged above, are
amortised over such estimated lower residual lives.
Software licenses costing below Rs.5,000 each are fully depreciated in
the year of acquisition.
f. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which is not related to the
construction activity nor is incidental thereto is charged to the
Profit & Loss Account. Income earned during construction period is
adjusted against the total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards, indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originally assessed standard of performance.
g. Leases ( Where the Company is the lessee)
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of the minimum
lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance charges are recognized as finance cost in the statement of
profit & loss. Lease management fees, legal charges and other initial
direct costs of lease are capitalised.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset or the useful life envisaged in Schedule XIV to the
Companies Act, 1956, whichever is lower. However, if there is no
reasonable certainty that the Company will obtain the ownership by the
end of the lease term, the capitalized leased assets are depreciated on
a straight-line basis over the shorter of the estimated useful life of
the asset, the lease term or the useful life envisaged in Schedule XIV
to the Companies Act, 1956.
Lease 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/receipts are recognized as
an expense in the statement of profit and loss on a straight-line basis
over the lease term.
h. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement 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 the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
i. Impairment
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 the cash-generating unit's (CGU) net
selling price and 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.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
j. Investments
Investments, which are readily realizable 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.
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
diminution in value is made to recognize a decline other than temporary
in the value of the 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.
l. 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 News & 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/ Income from investments
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable. Income on investments
made in the units of mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Commission Income
Commission income from sourcing of advertisement orders on behalf of
other entities' publications is recognized on printing of the
advertisement in those publications.
Dividend Income
Dividend income is recognized when the Company's right to receive the
dividend is established by the reporting date.
m. 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 prevailing at the date of
the transaction.
Conversion
Foreign currency monetary items are reported using the exchange rate
prevailing at the reporting date. 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.
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, 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 amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized 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 recognized as income or as expense for the
year.
n. Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes and the contributions are
charged to the statement of profit and loss for 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.
ii. Gratuity is a defined benefit plan. The cost of providing benefits
under the plan is determined on the basis of actuarial valuation at
each year-end using the projected unit credit method and is contributed
to Gratuity Fund created by the Company. Actuarial gains and losses are
recognized in full in the period in which they occur in the statement
of profit and loss.
iii. 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. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The Company presents the
entire leave as current liability in the balance sheet, since it does
not have as unconditional right to defer its settlement for 12 months
after the reporting date.
o. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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 their
present value and are determined based on best estimate required to
settle the obligation at the reporting date. These are reviewed at each
reporting date and are adjusted to reflect the current best estimates.
p. Income Taxes
Tax expense comprises 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 and tax laws
prevailing in the respective tax jurisdictions, where the Company
operates. The tax rates and the tax laws used to compute the amount are
those that are enacted or substantively enacted at the reporting date.
Deferred Income-taxes reflects the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences 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 realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profits.
At each reporting date the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets 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
realized. 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.
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 tax assets and deferred tax
liabilities relate to the same taxable entity and same taxation
authority.
q. Earnings Per Share
Basic earnings per Share are calculated by dividing the net profit or
loss for the reporting period attributable to equity shareholders
(after deducting attributable taxes) by the weighted average number of
equity shares outstanding during the reporting period. The weighted
average numbers of equity shares outstanding during the reporting
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) that have changed the number of equity
shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the reporting period attributable to equity
shareholders and the weighted average number of shares outstanding
during the reporting period are adjusted for the effects of all
dilutive potential equity shares.
r. Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and 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. 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 Company's best
estimate of the number of equity instruments that will ultimately vest.
The expense or credit recognized in the statement of profit and loss
for a period represents the movement in cumulative expense recognized
as at the beginning and end of that period and is recognized in
employee benefit scheme. Compensation cost is amortized over the
vesting period of the option on a straight line basis.
s. Cash and Cash equivalents
Cash and Cash equivalents for the purposes of cash flow statement
comprise cash in hand and at bank, cheques-in-hand and short-term
investments with an original maturity of three months or less.
t. Expenses incurred on Initial Public Offer (IPO)
Expenses incurred in Initial Public Offer are adjusted against the
securities premium account.
u. 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 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. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
v. 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 amortization (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/ (loss) from continuing
operations. In its measurement, the Company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2011
1. Nature of Operations
Hindustan Media Ventures Limited ("HMVL or the Company") is a 76.94%
subsidiary of HT Media Limited ("Parent Company"). The Company is
engaged in the business of publishing Hindustan, a Hindi Daily, and
two monthly Hindi magazines Nandan and Kadambani.
2. Basis of preparation
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the 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 accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year
3. Use of estimate
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 end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
(a) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
directly attributable cost of bringing the asset to its working
condition for its intended use.
Values of fixed assets acquired from the holding company in the
previous year are allocated based on fair valuation carried out by an
independent expert.
Borrowing costs relating to acquisition of Fixed Assets which takes
substantial period of time to get ready are also included to the extent
they relate to the period till such assets are ready for their intended
use.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
(b) Depreciation
Leasehold Land is amortised over the primary period of lease which is
between 65-90 years.
Leasehold Improvements are amortized over the useful life of upto 10
years or unexpired period of lease (whichever is lower) on a straight
line basis.
In respect of fixed assets acquired from the parent
company in the previous year, depreciation is provided as per the
useful lives of the assets estimated by the independent valuer as
mentioned below. These rates are greater than or equal to the
corresponding rates prescribed in Schedule XIV of the Companies Act,
1956.
Assets costing below Rs.5,000 each, are fully depreciated in the year
of acquisition.
Depreciation on other assets (except for those assets acquired from the
holding company) are provided on Straight Line Method at the rates
computed based on estimated useful life of the assets, which are equal
to or greater than the corresponding rates prescribed in Schedule XIV
to the Companies Act, 1956.
(c) Intangibles
Software Licenses
Values of individual software license acquired from holding company
during the earlier year is allocated based on a fair valuation carried
out by an independent expert.
Cost relating to software licenses which are purchased is capitalized
and amortized on a straight line basis over their estimated useful
lives of five years or six years, as the case may be.
Software licenses costing below Rs.5,000 each are fully amortised in
the year of acquisition.
Website Development
Cost relating to website development is capitalized and amotized over
their estimated useful lives of six years on a straight line basis.
(d) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which is not related to the
construction activity nor is incidental thereto is charged to the
Profit & Loss Account. Income earned during construction period is
adjusted against the total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards indirect expenditure on expansion, only that portion is
capitalized which
represents the marginal increase in such expenditure involved as a
result of capital expansion. Both direct and indirect expenditure are
capitalized only if they increase the value of the asset beyond its
originally assessed standard of performance.
(e) Leases (Where the Company is the lessee)
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
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.
(f) 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.
(g) Inventories
Inventories are valued as follows:
Raw Lower of cost and net realisable
materials, value. However, material and other
stores and items held for use in the production of
spares 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- Lower of cost and net realizable
progress value. Cost represents direct
materials cost. Cost is determined on
a weighted average basis.
Scrap and At net realizable value.
Waste
papers
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.
(h) 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 News & 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
Interest is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable. Income on investments
made in units of Fixed Maturity Plans of mutual funds is recognized
based on yield earned and to the extent of its reasonable certainity.
Commission Income
Commission Income from sourcing of advertisement orders on behalf of
other entities publications is accrued on printing of the
advertisement in the publications.
Dividend Income
Revenue is recognised when the right to receive 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 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 or on
reporting such monetary items of the 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 amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized 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 recognized as income or as expense for the
year.
(j) Retirement and other employee benefits i. Retirement benefits in
the form of Provident Fund and Pension Schemes are defined contribution
schemes 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.
ii. Gratuity is a defined benefit plan and provision in respect of the
same is made as per actuarial valuation carried out as per Projected
Unit Credit (PUC) method by an independent actuary as at the year end.
iii. Provision for leave encashment arising on long term benefits is
accrued and made on the basis of an actuarial valuation carried out as
per Projected Unit Credit method by an independent actuary at the year
end. Short term compensated absences are provided for based on
estimates.
iv. Actuarial gains/losses are immediately taken to Profit and Loss
account and are not deferred.
(k) Impairment
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 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.
(l) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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 their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date. These are reviewed at
each Balance Sheet date and are adjusted to reflect the current best
estimates. Provision for expenditure relating to voluntary retirement
is made when the employee accepts the offer of early retirement and
such provision amount is charged to Profit and Loss Account in the year
of provision.
(m) Income Taxes
Tax expense of the Company comprises current tax and deferred taxes.
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 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 tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. 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 the Company re- assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets 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 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.
MAT credit is recognised 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.
(n) 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
attributable taxes) by the weighted average number of equity shares
outstanding during the year. The weighted average number of equity
shares outstanding during the year is 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 year are
adjusted for the effects of all dilutive potential equity shares.
(o) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and 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.
(p) Cash and Cash equivalents
Cash and Cash equivalents for the purposes of Cash Flow Statement
comprise cash in hand and at bank, cheques-in-hand and short-term
investments with an original maturity of three months or less.
Cash flows are reported using indirect method, whereby profit before
tax is adjusted for the effects of transactions of a non-cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing and
investing activities of the Company are segregated.
(q) 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 respective asset. All other borrowing costs are
expenses in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
(r) Expenses incurred on Initial Public Offer (IPO)
Expenses incurred in Initial Public Offer are adjusted against the
Securities Premium Account.
Mar 31, 2010
(a) Statement of significant accounting policies
The financial statements are prepared to comply in alI material aspects
with Indian Accounting Standards as noticied by the Companies
(Accounting Standards) Rules. 2006 (as amended) and the relevant
provisions of the Companies Act, 1966. The financial statements have
been prepared under the historical cost convertion on accrual basis
(except in case of assets for which provision for impairment is made a
revaluation is carried out). The accounting policies have been
consistent applied by the Company and except for the changes in
accounting policies as discussed more fully below, are consistent with
these used in the previous year.
(b) Use of estimate
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 end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could ditter
from these estimates.
(c) Changes in accounting policies
With affect from April 1. 2009, the Company has changed (with
(character not visible) affects) its method of providing deprecation on
fixed assets from the Written Down Value ("WDV") method at the rates
prescribed in Schedule XIV to the Companies Act, 1956 to the Straight
Line Method (SLM) at the rates prescribed in Schedule XIV to the
Companies Act. 1956. This change is made to allgn the depreciation
policy with the parent company and will result in a more appropriate
representation of net book value of these assets and will give a
systematic basis of depreciation charge more representative of the time
pattern in which the economic benefits will be derived from the use of
such assets. Total impact of such change is Rs 197.60 lacs when is
credited its the deprecation expense.
Had the Company continued to use the earlier basis of providing
depreciation, the depreciation charge to the Profit and Loss Account
after taxation for the current year would have been higher by Rs 4.66
lace and the net block of fixed assets would correspondingly have been
lower by Rs.4.66 lace. The net surplus of Rs.3.11 lacs (after adjusting
deferred tax of Rs. 1.55 lacs) arising out of retrospective
recomputation has been recognised in these financial statements.
(d) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
directly characters not visible cost of bringing the asset to its
working condition for its intended use.
Values of fixed assets acquired from the holding company during the
year have been alocated based on fair valuation carried out during the
year by an independent expert.
Borrowing costs relating to acquisition of Fixed Assets which takes
substantial period of time to get ready are also included to the extent
they relate to the period till such assets are ready for their intended
use.
Leasehold improvements represent expenses incurred towards civil works,
interior funishings, etc on the leased premises at various locations,
(e) Depreciation
Leasehold Land is amortised over me primary period of lease which is
between 65 - 90 years.
Leasehold Improvements are amortized over the useful life of upto 10
years or unexpired period of lease (whichever is lower) on a straight
line basis.
In respect of fixed assets acquired from the parent company,
depreciation is provided as per the useful Iives of the assets
estimated by the independent valuer as mentioned below which are
greater than or equal to the corresponding rates proscribed in Schedule
XIV of the Companies Act, 1956.
Assets costing below Rs 5,000 each are fully depreciated in the year of
acquisition,
Depreciation on other assets (except for these assets acquired from the
holding company) are 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.
(I) Intangibles
Software Licenses
Values of individual software license acquired from holding company
during the year have been alocated based on a fair valuation carried
out during the year by an Independent expert. Cost relating to
software licenses which are purchased is capitalized and amortized on a
straight line basis over their estimated useful lives of five years or
six years, as the case may be
Software licenses costing below Rs.5,000 each are fully amortised in
the year of acquisition
(g) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indrect expenditure (including borrowing costs) incurred
during the construction period, which is not related to the
construction activity not is incidental thereto is charged to the
Profit & Loss Account. Income earned during construction period is
adjusted against the total of the indirect expenditure,
All direct capital expenditure incurred on expansion its capitalized.
As regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and Indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originary assessed standard of performance.
(h) Leases (Where the Company is the leasee)
Finance leases, which effectivity transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item
are capitalized at the lower ot the fair value and present value of the
minimum loase payments at the inception of the loase term and disclosed
as loased assets, lease payments are appointed between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term. capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term,
Leasee where the lessor effectivety retains substantially an 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,
(I) Investments
investments that are ready 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 besis Long-term investments are carried at cost. However
provision for diminution in value is made to recognise a decine other
than temporary in the value of the investments,
(J) Inventories
inventories are valued as follows:
Raw materials, 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 cosL 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
As 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 wilI 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 News & 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 comptetion of job
work as per terms of the agreement.
interest
Interest is recognised on a time proportion basis taxing into account
the amount outstanding and the rate applicable
Commission Income
Commission Income from sourcing of advertisement orders on behalf of
other entities publications is accrued on printing of the
advertisement in the publications,
Dividend income
Revenue is recognised when the shareholders right to receive payment is
established by the balance sheet date.
(I) Foreign currency transections
Initial recongnition
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 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 difference
Exchange differences arising on the settlement of monetary items or on
reporting such monetary items of company at rates different from these
at which they were Intally recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(m) Retirement and other employee benefits
I. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes 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.
ii. Gratuity is a defined benefit plan and provision in respect of the
same is made as per actuarial valuation camed out as per projected unit
credit method by an independent actuary as at the year end.
iii. Provision for leave encashment arising on long term benefits is
accrued and made on the basis of an actuarial valuation carried out as
per protected unit credit method by an independent actuary at the year
end. Short term compensated absences are provided for based on
estimates.
iv. Actuarial gains/losses are immedataly taken to Profit and Loss
account and are not deferred.
(n) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
tactors An impairment loss is recognized wherever the carrying amounts
of an asset exceed 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 weghted average cost of capital.
(o) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of when a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date. These are reviewed at
each Balance Sheet date and are adjusted to reflect the current best
estimates Provision for expenditure relating to voluntary retirement s
made when the employee accepts the otter of early retirement and Such
provision amount is charged to Profit and Loss Account in the year of
provision.
(p) Income Tax
Tax expense of the Company comprises fringe benefit, current and
deferred taxes Fringe benefit and current income tax are measured at
the amount expected to be paid to the tax authorities in accordance
with the Income-tax Act 1961 enacted india. Deferred income taxes
reflects the impact of current year timing differences between laxable
income and accounting income lor the year and reversal of timing
differences of earlier years.
Deterred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deterred
tax assets and deterred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be avaliable against when such deferred tax assets can be
realsed in situation where the Company has unabsorbed depreciation or
carry forward tax losses, at deterred 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 the Company re-assesses unrecognised
deferred tax assets ft recognises unreconised deferred tax assets 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 deterred tax assets can be realised.
The carrying amount of deterred tax assets are renewed at each balance
sheet date. The Company writes-down the carring 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 deterred 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.
MAT credit is recognised 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.
(q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss tor the year attributable to equity shareholders (after deducting
attributable taxes) by the weighted average number of equity shares
outstanding during the year The weighted average number of equity
shares outstanding during the year is adjusted for events of bonus
Issue: bonus element in a nights issue to existing shareholders; share
split and reverse share split (consolidation of Shares).
For the purpose of calculating diluted earnings per snare. 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) Employee Stock Compensation cost
Measurement and disclosure of the employee sharebased payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Gudeines 1999 and 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.
(s) Cash and Cash equlvalents
Cash and Cash equivalents for the purposes of cash flow statement
comprise cash in hand and at bank, cheques-in-hand and short - term
investments with an original maturity of there months or less.
Cash flows are reported using indirect method whereby profit before tax
is adjusted for the effects of transactions of a non-cash nature and
any deferrals or accruals of past or future cash receipts or payments.
The cash flows from regular revenue generating, financing and investing
activities of the Company are segregated.
(t) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction
production of an asset that necessary takes a substantial period of
time to get ready for its intended use or sale are capitalized as part
of the cost of the respective asset. AlI other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
Mar 31, 2009
1. Basis of preparation
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the 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 accrual basis. The accounting
policies have been consistently applied by the Company and except for
the changes in accounting policies as discussed more fully below, are
consistent with those used in the previous year.
2. Use of estimate
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.
3. Changes in Accounting Policies
The Company has changed its policy with respect to the exchange
difference on foreign currency transactions relating to acquisition of
fixed assets. These differences have been adjusted to the carrying
amount of fixed assets pursuant to retrospective amendments (with
effect from 7th December, 2006) to Accounting Standard (AS-11 ) on "
Effects of Changes in Foreign Exchange Rates" vide GSR notification
225(E) dated 31st March 2009. The above accounting treatment followed
by the Company is consistent with the revised AS-11
Had the Company continued to use the earlier basis of accounting for
foreign exchange fluctuation, the Profit after taxation for the current
year would have been lower by Rs.313.57 lacs (Net of tax of Rs.161.47
lacs) and net block of fixed assets (including CWIP) would
correspondingly have been lower by Rs.475.04 lacs.
4. Statement of Significant Accounting Policies
(a) Fixed Assets
Value for individual Fixed Assets acquired from the holding company in
earlier years had been allocated based on the valuation carried out by
independent experts.
Other Fixed Assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
directly 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 are
also included to the extent they relate to the period till such assets
are ready for their intended use.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
(b) Depreciation
Leasehold Land and Leasehold Improvements are amortized over the useful
life or unexpired period of lease (whichever is lower) on a straight
line basis.
In respect of fixed assets acquired in an earlier year from the holding
company, which are estimated to have lower residual lives than
envisaged as per the rates provided in Schedule XIV to the Companies
Act, 1956, depreciation is provided based on such estimated lower
residual life.
In respect of fixed assets (Plant & Machinery- printing press) acquired
during the year 2004-05 from the holding company, depreciation is
provided on straight line method over estimated useful life of 5 years
as technically assessed by an independent expert.
Assets costing below Rs.5,000 each are fully depreciated in the year of
acquisition.
Depreciation on other assets (except those acquired from the holding
company) are 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.
(c) Intangibles
Software Licenses
Value for individual software license acquired from holding company in
an earlier year had been allocated based on the valuation carried out
by an independent expert.
Software licenses acquired from the holding company, which are
estimated to have lower residual lives than that envisaged above, are
amortised over such estimated lower residual lives.
Cost relating to other software licenses which are purchased is
capitalized and amortized on a straight line basis over their estimated
useful lives of five years or six years, as the case may be.
Software licenses costing below Rs.5,000 each are fully depreciated in
the year of acquisition.
Website Development
Cost relating to website development is capitalized and amortized over
their estimated useful lives of six years on a straight line basis.
License Fees
One Time Entry Fees paid by the Company for acquiring licenses having
useful life of 10 years for its Radio Business including consultancy
cost for Bidding Phase II is capitalized and is amortized on a straight
line basis.
Music Contents
Cost relating to music contents, which are purchased, is capitalized
and amortised on a straight line basis over their estimated useful
lives of four years.
(d) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which is not related to the
construction activity nor is incidental thereto is charged to the
Profit & Loss Account. Income earned during construction period is
adjusted against the total of the indirect expenditure.
All direct capital expenditure incurred on expansion is capitalized. As
regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its originally assessed standard of performance.
(g) Inventories
Inventories are valued as follows : Raw materials, 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.
(h) 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 News & 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.
Airtime Revenue
Revenue from radio broadcasting is recognized on an accrual basis on
the airing of clients commercials.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable. Income on investment
made in the units of fixed maturity plans of mutual funds is recognized
based on the yield earned and to the extent of reasonable certainty.
Dividend
Revenue is recognized if the right to receive 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 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 7th December, 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, and
in other cases, are accumulated in a "Foreign Currency Monetary Item
Translation Difference Account" in the enterprises financial
statements and amortized over the balance period of such long- term
asset/liability but not beyond accounting period ending on or before 31
st March, 2011.
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 amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized 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 recognized as income or as expense for the
year.
(j) Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contribution are charged to the Profit and
Loss Account of the year when the contribution to the fund is due.
ii. Gratuity is a defined benefit plan and provision in respect of made
as per actuarial valuation carried out as per projected unit credit
method by an independent actuary as at year end and is contributed to
Gratuity Fund created by the Company.
iii. Provision for leave encashment arising on long term benefits is
accrued and made on the basis of an actuarial valuation carried out as
per projected unit credit method by an independent actuary at the year
end. Short term compensated absences are provided for based on
estimates.
iv. Actuarial gains/losses are immediately taken to Profit and Loss
account and are not deferred.
v. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes 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.
(k) Impairment
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 amounts
of an asset exceed 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.
(l) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and 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 their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date. These are reviewed at
each Balance Sheet date and are adjusted to reflect the current best
estimates. Provision for expenditure relating to voluntary retirement
is made when the employee accepts the offer of early retirement and
such provision amount is charged to Profit and Loss Account in the year
of provision.
(m) Income Taxes
Tax expense comprises fringe benefit, current and deferred taxes.
Fringe benefit and current income tax are measured at the amount
expected to be paid to the tax authorities in accordance with the
Income Tax- Act, 1961. Deferred Income Tax 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 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 tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognized 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
realized. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized
deferred tax assets. It recognizes unrecognized deferred tax assets 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
realized. 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.
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
(n) Earnings Per Share
Basic Earnings Per Share is calculated by dividing the net profit or
loss for the year attributable to Equity Shareholders (after deducting
preference dividend and attributable taxes) by the weighted average
number of equity shares outstanding during the year. The weighted
average numbers 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 year are
adjusted for the effects of all dilutive potential equity shares.
(o) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by The Institute
of Chartered Accountantsof 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.
(p) Cash Flow Statement
Cash flows are reported using indirect method, whereby profit before
tax is adjusted for the effects transactions of a non-cash nature and
any deferrals or accruals of past or future cash receipts or payments.
The cash flows from regular revenue generating, financing and investing
activities of the Company are segregated.
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.
(q) Segment Reporting Policies
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 analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate
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 on a rational
basis based on nature of each such common cost.
Unallocated Items:
Corporate income and expenses are considered as a part of unallocable
income & expense, which are not identifiable 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.
(r) Broadcast License Fees
License fees are charged to revenue at the rate of 4% of gross revenue
for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the
concerned city, whichever is higher. Gross Revenue for this purpose is
revenue derived on the basis of billing rates inclusive of any taxes
and without deduction of any discount given to the advertiser and any
commission paid to advertising agencies. ROTEF means 25% of highest
valid bid in the city.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Hindustan Media Ventures Ltd.
-
Hindustan Media Ventures Ltd. Tools
- Bulk Deals
-
Hindustan Media Ventures Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Hindustan Media Ventures Ltd. Key Financial Ratios
- Ratios
-
Hindustan Media Ventures Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Hindustan Media Ventures Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Hindustan Media Ventures Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Hindustan Media Ventures Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
