Mar 31, 2023
HT Media Limited (âHTMLâ or âthe Companyâ) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the National stock exchange (NSE) and Bombay stock exchange (BSE).
The Company publishes âHindustan Timesâ, an English daily, and âMintâ, a Business paper daily except on Sunday and undertakes commercial printing jobs. The Company is also engaged into the business of providing entertainment, radio broadcast and all other related activities through its Radio Stations operating under brand name âFever 104â, âFeverâ and âRadio Nashaâ. The digital business of the Company comprises of various online platforms such as âshine.comâ, etc. The registered office of the Company is located at 18-20, K.G. Marg, New Delhi-110001.
The Company derives revenue primarily from the sale of the above mentioned publications, advertisements published therein, by undertaking printing jobs and airtime advertisements aired at the aforesaid radio stations. Digital business contributes to the Companyâs revenue, by way of display of advertisements on these websites and related services.
Information on other related party relationships of the Company is provided in Note 36.
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 18, 2023.
2.1 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.
- 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. 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.
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 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 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 an 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 March 31, 2015:
- 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 re-financed on or after April 1, 2015:
- The exchange differences pertaining to long term foreign currency loans obtained or refinanced on or after April 1, 2015 is charged off or credited to the statement of profit & loss account under Ind-AS.
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, 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 40)
⢠Quantitative disclosures of fair value measurement hierarchy (Note 40)
⢠Investments at Fair Value through profit and loss (Note 6B)
⢠Investment properties (Note 4)
⢠Financial instruments (including those carried at amortised cost) (Note 6D)
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 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 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:
Advertisements
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 Newspaper & 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.
Printing Job Work
Revenue from printing job work is recognised by reference to stage of completion of job work as per terms of 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.
Airtime Revenue
Revenue from radio broadcasting categorised in Free Commercial Time (FCT) and Non Free Commercial Time (Non FCT) is recognized on the airing of clientâs commercials.
Revenue from radio broadcasting 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.
Revenue from online advertising
Revenue from digital platforms by display of internet advertisements are typically contracted for a period ranging between zero to twelve months.
Revenue from online advertising 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.
Revenue in this respect is recognized as and when advertisement is displayed. Unearned revenues are reported on the balance sheet as deferred revenue/ contract liability.
Revenue from subscription of packages of placement of job postings on âshine.comâ is recognized at the time the job postings are displayed based upon customer usage patterns, or upon expiry of the subscription package whichever is earlier and 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.
Revenue from Job Fair and Resume Services
Revenue from Job Fair and Resume services is recognised upon completion terms of the contract with customers and 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.
Interest income
For all debt instruments measured either at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (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.
f) Taxes
Current income tax
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax 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 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.
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
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.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. 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.
MAT Credits are in the form of unused tax credits that are carried forward by the company for a specified period of time. Accordingly, MAT Credit Entitlement are grouped with Deferred Tax Asset in the Balance Sheet. The company reviews at each balance sheet date the reasonable certainty to recover deferred tax asset including MAT Credit Entitlement.
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 for one time transition option of considering the carrying cost of Property, Plant & Equipment, Investment properties 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.
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.
All other expenses on existing 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.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in 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.
Value for individual assets acquired from âThe Hindustan Times Limitedâ (the holding company) in an earlier year is allocated based on the valuation carried out by independent expert at the time of acquisition. Other assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
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.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Type of asset |
Useful lives estimated by management (Years) |
Factory Buildings |
5 to 30 |
Buildings (other than factory buildings) |
3 to 60 |
Plant & Machinery |
1 to 21 |
Office Equipments |
1 to 5 |
Furniture and Fixtures |
2 to 10 |
Vehicles |
8 |
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 21.1 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.
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 lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
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 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 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 derecognition.
Investment properties that meet the criteria to be classified as held for sale are measured and presented in accordance with Ind AS 105.
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 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 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 lives is recognised in the statement of profit and loss.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cashgenerating 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.
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 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 statement of profit or loss.
Intangible assets with finite lives are amortized on straight line basis using the estimated useful life as follows:
Intangible assets |
Useful lives |
(in years) |
|
Website Development |
3 - 6 |
Software licenses |
1 - 6 |
License Fees (One time entry fee) |
15 |
k) 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, if any, 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, if any. All other borrowing costs are expensed in the period in which they occur.
l) Leases
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.
Company as a lessee
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 straight-line 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 in-substance 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.
Sale and leaseback
A sale and leaseback transaction is where the Company sells an asset and immediately reacquires the use of the asset by entering into a lease with the buyer. A sale occurs when control of the underlying asset passes to the buyer. A lease liability is recognised, the associated property, plant and equipment asset is derecognised, and a right of use asset is recognised at the proportion of the carrying
value relating to the right retained. Any gain or loss arising relates to the rights transferred to the buyer.
Company as a lessor
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 |
Lower of cost and net realizable |
materials, |
value. However, material and |
stores and |
other items held for use in the |
spares |
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- |
Lower of cost and net realizable |
progress |
value. Cost includes direct |
and finished |
materials and a proportion |
goods |
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.
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 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.
p) 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.
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
Gratuity is a defined benefit scheme. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
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.
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.
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 nonvesting 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.
Initial 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.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
⢠Debt instruments at amortised cost
⢠Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
⢠Equity instruments measured at fair value through other comprehensive income (FVTOCI)
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.
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).
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.
Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration 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.
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) Lease receivables under
Mar 31, 2018
1.1 Summary of significant accounting policies
a) Foreign currencies
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 an 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.
Exchange differences pertaining to long term foreign currency loans obtained or re-financed on or before March 31, 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 re-financed on or after April 1, 2016:
- The exchange differences pertaining to long term foreign currency loans obtained or re-financed on or after April 1, 2016 is charged off or credited to Statement of Profit & Loss account under Ind-AS.
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.
b) 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, 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 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 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 (Note39)
- Quantitative disclosures of fair value measurement hierarchy (Note 39)
- Investment in unquoted equity shares (Note 6A & 6B)
- Investment properties (Note 4)
- Financial instruments (including those carried at amortised cost) (Note 39)
c) 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) 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 Newspaper & 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.
Management also extends a right to return to its customers which it believes is a form of variable consideration.
Printing Job Work
Revenue from printing job work is recognised by reference to stage of completion of job work as per terms of 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.
Airtime Revenue
Revenue from radio broadcasting is recognized on an accrual basis on the airing of clientâs commercials. Revenue from radio broadcasting is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Revenue from online advertising
Revenue from digital platforms by display of internet advertisements are typically contracted for a period ranging between zero to twelve months. Revenue in this respect is recognized over the period of the contract, in accordance with the established principles of accrual accounting and is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any. Unearned revenues are reported on the balance sheet as deferred revenue.
Revenue from subscription of packages of placement ofjob postings on âshine.comâ is recognized at the time the job postings are displayed based upon customer usage patterns, or upon expiry of the subscription package whichever is earlier and is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Revenue from Job Fair and Resume Services
Revenue from Job Fair and Resume services is recognised upon completion terms of the contract with customers and 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 either at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (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.
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.
d) 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.
e) Taxes
Current income tax
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax 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 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 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.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. 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.
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 GST 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-ordinated plan to dispose off 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.
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 for 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 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.
All other expenses on existing 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.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in Statement of Profit and 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.
Value for individual assets acquired from âThe Hindustan Times Limitedâ (the holding company) in an earlier year is allocated based on the valuation carried out by independent expert at the time of acquisition. Other assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
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.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
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 21.1 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 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 lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
h) 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 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 derecognised either when they have been disposed off 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 Statement of Profit and Loss in the period of derecognition.
i) 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 Statement of Profit and 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 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 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 lives is recognised in the Statement of Profit and Loss.
Intangible assets with indefinite useful lives 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.
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 and Loss when the asset is derecognised.
Intangible assets with finite lives are amortized on straight line basis using the estimated useful life as follows:
j) 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, if any, 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, if any. All other borrowing costs are expensed in the period in which they occur.
k) 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 (Refer note 35). Contingent rentals are recognised as expenses in the periods in which they are incurred.
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.
Contingent rents are recognised as revenue in the period in which they are earned.
l) Inventories
Inventories are valued as follows :
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.
m) 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 lives are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
n) 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.
o) 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 cost of providing benefits under the defined benefit plan is determined 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 ofthe 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 perio d in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in Statement of Profit and 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
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.
p) 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.
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.
q) 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 in three categories:
- Debt instruments at amortised cost
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI)
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 39.
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 and contingent consideration 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) Lease receivables under Ind-AS 17
c) 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 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 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 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 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 14.
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 nonderivative 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.
r) Derivative financial Instruments
Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts, call spread options, coupon only swaps and interest rate swaps to hedge its foreign currency risks and interest rate risks, respectively. 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.
s) 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 remeasurement 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.
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) 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.
v) Investments in subsidiaries, joint ventures and associates
An investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee.
An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Thus, an investor controls an investee if and only if the investor has all the following:
(a) power over the investee;
(b) exposure, or rights, to variable returns from its involvement with the investee and
(c) the ability to use its power over the investee to affect the amount of the investorâs returns.
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 subsidiary and 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.
Investment carried at cost will be tested for impairment as per Ind-AS 36.
Investment in Joint venture shall be recognized at FVTOCI, 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
w) 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, 2017
1. CORPORATE INFORMATION
HT Media Limited (âHTMLâ or âthe Companyâ) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the National stock exchange (NSE) and Bombay stock exchange (BSE). The Company publishes âHindustan Timesâ, an English daily, and âMintâ, a Business paper daily except on Sunday and undertakes commercial printing jobs. The Company is also engaged into the business of providing entertainment, radio broadcast and all other related activities through its Radio Stations operating under brand name âFever 104â,âFeverâ and âRadio Nashaâ. The digital business of the Company comprises of various online platforms such as âshine.comâ etc. The registered office of the Company is located at 18-20, K.G. Marg, New Delhi-110001.
The Company derives revenue primarily from the sale of the above mentioned publications, advertisements published therein, by undertaking printing jobs and airtime advertisements aired at the aforesaid radio stations. Internet business also contributes to the Companyâs revenue, by way of display of advertisements on these websites.
Information on related party relationship of the Company is provided in Note 36.
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 19, 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 (âIndian GAAPâ). The financial statements for the year ended March
31, 2017 are the first the Company has prepared in accordance with Ind-AS. Refer Note 51 on first time adoption for 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 lacs as per the requirement of Schedule III, unless otherwise stated.
The standalone financial statements are presented in Indian Rupees (Rs,) which is also the Companyâs functional currency.
2.2 Summary of significant accounting policies
a) Foreign currencies
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 an 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.
Exchange differences pertaining to long term foreign currency loans obtained or re-financed on or before March 31, 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 re-financed on or after April 1, 2016 :
- The exchange differences pertaining to long term foreign currency working capital loans obtained or re-financed on or after April 1, 2016 is charged off or credited to Statement of Profit and Loss account under Ind-AS.
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.
b) 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 39)
- Quantitative disclosures of fair value measurement hierarchy (Note 39)
- Investment in unquoted equity shares (Note 6A & 6B)
- Investment properties (Note 4)
- Financial instruments (including those carried at amortized cost) (Note 39)
c) 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 Newspaper & 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.
Management also extends a right to return to its customers which it believes is a form of variable consideration.
Printing Job Work
Revenue from printing job work is recognized by reference to stage of completion of job work as per terms of 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.
Airtime Revenue
Revenue from radio broadcasting is recognized on an accrual basis on the airing of clientâs commercials. Revenue from radio broadcasting is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Revenue from online advertising
Revenue from digital platforms by display of internet advertisements are typically contracted for a period ranging between zero to twelve months. Revenue in this respect is recognized over the period of the contract, in accordance with the established principles of accrual accounting and is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any. Unearned revenues are reported on the balance sheet as deferred revenue.
Revenue from subscription of packages of placement of job postings on âshine.comâ is recognized at the time the job postings are displayed based upon customer usage patterns, or upon expiry of the subscription package whichever is earlier and is measured at the fair value of the consideration received or receivable, net of allowances, trade discounts and volume rebates, if any.
Revenue from Job Fair and Resume Services
Revenue from Job Fair and Resume services is recognized upon completion terms of the contract with customers and 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 either at amortized cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the 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 other 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 and 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 payments to the lessors 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.
d) Government grants
Government grants are recognized 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 recognized 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 recognized 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.
e) Taxes
Current income tax
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax 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 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 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.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. 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.
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 off 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 29. 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 for 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.
All other expenses on existing 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.
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 Statement of Profit and 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.
Value for individual assets acquired from âThe Hindustan Times Limitedâ (the holding company) in an earlier year is allocated based on the valuation carried out by independent expert at the time of acquisition. Other assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
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.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
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 II to the Companies Act, 2013. The management has estimated, supported by technical assessment, the useful lives of certain plant and machinery as 16 to 21.1 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) 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 off 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 the Statement of Profit and Loss in the period of de-recognition.
i) 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 and Loss when the asset is derecognized.
j) 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, if any, 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, if any. All other borrowing costs are expensed in the period in which they occur.
k) 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 contains 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 (Refer note 35). Contingent rentals are recognized as expenses in the periods in which they are incurred.
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 less or
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.
Contingent rents are recognized as revenue in the period in which they are earned.
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.
m) Impairment of non-financial assets
A 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 and 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.
n) 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 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 recognized as a finance cost.
o) 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 cost of providing benefits under the defined benefit plan is determined 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 non- current liability.
p) 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 no 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 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 no 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 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.
q) 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 in four categories:
- Debt instruments at amortized cost
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI)
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 39.
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 and contingent consideration recognized 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 Statement of Profit and Loss, 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) Lease receivables under Ind-AS 17
c) 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 analysed.
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 and 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 and Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit and 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 EIR amortization is included as finance costs in the Statement of Profit and Loss.
This category generally applies to borrowings. For more information refer Note 14.
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 and 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 and 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 and loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit and 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.
r) Derivative financial Instruments
Initial recognition and subsequent measurement
Company uses derivative financial instruments, such as forward currency contracts, call spread options, coupon only swaps and interest rate swaps to hedge its foreign currency risks and interest rate risks, respectively. 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.
The purchase contracts that meet the definition of a derivative under Ind-AS 109 are recognized in the Statement of Profit and Loss.
Any gain or losses arising from changes in the fair value of derivatives are taken directly to profit and loss.
s) Cash dividend and non- cash distribution to equity holders of the parent Company
The Company recognizes a liability to make cash or non-cash distributions to equity holders of the parent Company 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.
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 statement of cash flow, cash & cash equivalents consist of cash and short term deposits as defined above, net of outstanding bank overdrafts as they are considered as integral part of Companyâs cash management.
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 from continuing operations on the face of Statement of Profit and Loss. In the measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.
v) Investments in subsidiaries, joint ventures and associates
An investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent Company by assessing whether it controls the investee.
An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Thus, an investor controls an investee if and only if the investor has all the following:
(a) power over the investee;
(b) exposure, or rights, to variable returns from its involvement with the investee and
(c) the ability to use its power over the investee to affect the amount of the investorâs returns.
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 subsidiary and 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.
Investment carried at cost will be tested for impairment as per Ind-AS 36.
Investment in Joint venture shall be recognized at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity
w) Earnings per Share
Basic earnings per share
Basic earnings per share are calculated by dividing:
-the profit
Mar 31, 2016
1. CORPORATE INFORMATION
HT Media Limited (the Company) is a public company registered in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the National stock exchange and Bombay stock exchange. The Company publishes âHindustan Timesâ, an English daily, and âMintâ, a Business paper daily except on Sundayâ and undertakes commercial printing jobs. The Company is also engaged into the business of providing entertainment, radio broadcast and all other related activities through its Radio Stations operating under brand name âFever 104â in cities of Delhi, Mumbai, Kolkata and Bangalore. The digital business of the Company comprises of âshine.comâ (job portal), âhindustantimes.comâ (News Website) and âlivemint.comâ (business news website).
The Company derives revenue primarily from the sale of the above mentioned publications, advertisements published therein, by undertaking printing jobs and airtime advertisements aired at the aforesaid radio stations. Internet business also contributes to the Companyâs revenue, by way of display of advertisements on these websites.
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 respects 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 Statement of Significant Accounting Polices
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 end of reporting period. Although these estimates are based upon managementâs 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
Value for individual fixed assets acquired from âThe Hindustan Times Limitedâ (the holding company) in an earlier year is allocated based on the valuation carried out by independent expert at the time of acquisition.
Other fixed assets are stated at cost less accumulated depreciation and accumulated 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.
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.
The Company adjusts exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to 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 differences.
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.
Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc on the leased premises at various locations.
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
Depreciation on fixed assets are provided on Straight Line Method at the rates computed based on estimated useful life of the assets 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 Years. These lives are higher than those indicated in schedule II.
Leasehold Land is amortized on a straight line basis over the period of lease (ranging between 53 years to 99 years).
Leasehold Improvements are amortized on a straight line basis over the useful life not exceeding 10 years or over the life of lease, whichever is lower.
d) Intangibles 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. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.
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.
I 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.
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 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.
License fees are charged to statement of profit and loss at the rate of 4% of gross revenue for the reporting 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.
Software licenses acquired from the holding company, which are estimated to have lower residual lives than that envisaged above, are amortized over such estimated lower residual lives.
e) Leases Where the Company is 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 costs 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 less or 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/income in the statement of profit and loss on a straight-line basis over the lease term.
Where the Company is less or
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 and 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 assetâs recoverable amount. An assetâs recoverable amount is higher of an assetâs or its cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Companyâs 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.
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.
Investment Property
An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of, the company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost comprises purchase price and directly attributable cost of bringing the investment property to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Depreciation on building component of investment property is calculated on a straight-line basis using the rate arrived at based on useful life estimated by the management. The Company has used depreciation rate of 3.34%.
On disposal of an investment property, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
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 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 clientâs commercials.
Revenue from online advertising
Revenue from âshine.comâ and âhindustantimes. comâ by display of internet advertisements are typically contracted for a period of one to twelve months. Revenue in this respect is recognized over the period of the contract, in accordance with the established principles of accrual accounting. Unearned revenues are reported on the balance sheet as deferred revenue.
Revenue from subscription of packages of placement of job postings on âshine.comâ is recognized at the time the job postings are displayed based upon customer usage patterns, or upon expiry of the subscription package whichever is earlier.
Revenue from job fairs
Revenue is recognized upon completion of the job fairs.
Revenue from resume services
Revenue is recognized once the resume has been completed.
Interest/Income from Investments
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 mutual funds is recognized based on the yield earned and to the extent of its reasonable certainty.
Dividend
Dividend Income is recognized when the Companyâs right to receive the dividend is established by the reporting date.
Commission income
Commission income from sourcing of advertisement orders on behalf of other entitiesâ publications is recognised on printing of the advertisement in those publications.
k) Foreign currency translation
Foreign currency transactions and balances
(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 at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Nonmonetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
(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 âForeign Currency Monetary Item Translation Difference Accountâ 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 âlong-term foreign currency monetary itemâ, 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).
(v) Translation of integral foreign operation
The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.
l) 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 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.
(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 longterm 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 will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of 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, 1 961 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. Current income-tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
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 income-tax relating to items recognized directly in equity
is recognized in equity and not in the statement of profit and loss.
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 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 the same taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent there is convincing evidence that the Company
will pay normal income-tax during the specified future period. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as âMAT Credit Entitlementâ. The Company reviews the âMAT Credit Entitlementâ asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
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 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 Companyâs 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 in the cash flow statement comprise cash at bank and in hand, cherubs in hand and short term investments with an original maturity of three months or less.
r) Segment Reporting Policies Identification of segments
The Companyâs 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
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment Policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
s) Derivative 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 firm 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.
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
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 '' 2 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 31 March 2016, the amount of per share dividend recognized as distributions to equity shareholders was Rs, 0.40 (Previous Year: Rs, 0.40).
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 and subsidiary of holding company are as below:
* As the financial statements are represented in Rs, Lacs and number of shares are represented in Lacs above, thus the same has not been considered in table above.
**As on 31 March 2016, Government Pension Fund Global has 97,85,517 shares being 4.20% of the share capital.
As per 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.
1. FCNR Loan from Citi Bank carries interest @ USD 1 month Libor 1.90% spread p.a. The loan is repayable in 8 semiannual equal installments of USD 8,75,000 starting from 31 January 2016. The loan is secured by Pari Passu charge on companyâs all present & future movable fixed assets.
2. External Commercial borrowing from Citi bank carries interest @ USD 3 months Libor 1.50% spread p.a. The loan is repayable in 8 semiannual equal installments of USD 15,62,500 starting from 31 December 2013. The loan is secured by Pari Passu charge on companyâs present & future movable fixed assets at (A) Noida - B-2, sector 63, District Gautam Budh Nagar, Noida -201307 (B) plot No.-8, Udyog Vihar Greater Noida, Uttar Pradesh-201306, and first and exclusive charge in favour of Citibank N.A. on assets acquired/ to be acquired out of our ECB and LC facilities of USD 32.5 Mn, to secure Citibankâs ECB, LC and hedging limits. The loan is further secured by pledge of Companyâs investment in Debt Mutual Funds.
1. Buyerâs credit from BNP Paribas is secured by way of first pari passu charge over all moveable assets such as raw materials, stock-in-process, finished goods lying at various factories, god owns, warehouses, etc, wherever situated or in transit, both present or future and book debts of the Company and all book debts, outstanding monies, receivables, claims, bills which are due and which may at any time during the continuance of this security become due by any person, firm, company or body corporate. The amount has been repaid during the year.
2. Buyerâs credit from Royal Bank of Scotland is secured by way of first pari passu charge on all current assets (both present and future) in favour of bank. The amount has been repaid during the year.
3. Buyerâs credit from Kotak Mahindra Bank is secured by first Pari-passu charge on all present and future current assets of the Company including book debts, receivables, outstanding monies etc, stock of raw material, semi finished goods, related movables, together with benefit of all rights thereto. The amount has been repaid during the year.
b. Plant & Machinery having a gross value of Rs, 86.61 Lacs (Previous year Rs, 86.61 Lacs) towards Companyâs proportionate share for right to use in the Common Infrastructure for channel transmission (for its four stations) built on land owned by Prasar Bharti and used by all the broadcasters at respective stations as per the terms of bid document on FM Radio Broadcasting (Phase II).
1) 10.05 lac Zero Coupon Compulsorily Convertible Debentures of Rs, 100/- each, fully paid, converted into 70.77 lac equity shares of Rs, 10/- each during the year.
* Classified as current portion of long term investments during the year.
** These investments are pledged with Deutsche Bank against Over Draft Facility.
*** 64.75 Lacs units of Rs, 10/- each are pledged with Deutsche Bank against OD facility.
**** 1.43 Lacs units of Rs, 1000/- each are pledged with Deutsche Bank against OD facility.
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 of Companies Act, 1956 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 internal 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 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. 400.31 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 for the current period would have been higher
by Rs. 419.83 lacs (net of tax impact of Rs. 222.19 lacs), retained
earnings at the beginning of the current period would have been higher
by Rs. 400.31 lacs (net of tax impact of Rs. 206.13 lacs) and the fixed
asset would correspondingly have been higher byRs. 1,248.46 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 assets
Value for individual Fixed assets acquired from ''The Hindustan Times
Limited'' (the holding company) in an earlier year is allocated based on
the valuation carried out by independent expert at the time of
acquisition.
Other Fixed Assets are stated at cost less accumulated depreciation and
accumulated 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 discount and rebates are
deducted in arriving at the purchase price.
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.
The Company adjusts exchange differences arising on translation/
settlement of long-term foreign currency monetary items pertaining to
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 differences.
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.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
d) Depreciation
Depreciation on fixed assets are provided on Straight Line Method at
the rates computed based on estimated useful life of the assets
estimated by the management.
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 Years. These
lives are higher than those indicated in schedule II.
Leasehold Land is amortized on a straight line basis over the period of
lease (ranging between 53 years to 95 years).
Leasehold Improvements are amortized on a straight line basis over the
useful life not exceeding 10 years or over the life of lease, whichever
is lower.
e) Intangibles 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. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
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.
The amortization period and the amortization method is 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 is 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 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.
License fees are charged to statement of profit and loss at the rate of
4% of gross revenue for the reporting 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.
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 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 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 costs 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.
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/ income in the statement of profit and loss on a straight-
line basis over the lease term.
h) Borrowing costs
Borrowing cost includes interest and 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 higher of an asset''s or it''s cash-generating unit''s (CGU) net
selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated.
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.
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.
Investment Property
An investment in land or buildings, which is not intended to be
occupied substantially for use by, or in the operations of, the
company, is classified as investment property. Investment properties
are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalization
criteria are met and directly attributable cost of bringing the
investment property to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase
price.
Depreciation on building component of investment property is calculated
on a straight-line basis using the rate arrived at based on useful life
estimated by the management. The Company has used depreciation rate of
3.34%.
On disposal of an investment property, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
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 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 client''s commercials.
Revenue from online advertising
Revenue from ''shine.com'' and ''hindustantimes.com'' by display of
internet advertisements are typically contracted for a period of one to
twelve months. Revenue in this respect is recognized over the period
of the contract, in accordance with the established principles of
accrual accounting. Unearned revenues are reported on the balance sheet
as deferred revenue.
Revenue from subscription of packages of placement of job postings on
''shine.com'' is recognized at the time the job postings are displayed
based upon customer usage patterns, or upon expiry of the subscription
package whichever is earlier
Revenue from job fairs
Revenue is recognized upon completion of the job fairs.
Revenue from resume services
Revenue is recognized once the resume has been completed.
Interest/Income from Investments
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 mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Dividend
Dividend Income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
Commission income
Commission income from sourcing of advertisement orders on behalf of
other entities'' publications is recognised on printing of the
advertisement in those publications.
m) Foreign currency transactions
Foreign currency transactions and balances
(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 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
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
(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).
(v) Translation of integral foreign operation
The financial statements of an integral foreign operation are
translated as if the transactions of the foreign operation have been
those of the Company itself.
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
will be required to settle the obligation, in respect of which a
reliable estimate can be made of the amount of obligation. Provisions
are not discounted to their present value and are determined based on
best estimate required to settle the obligation at the repoting 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.
Current income-tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
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 income-tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
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 the same taxation
authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognises MAT credit
available as an asset only to the extent there is convincing evidence
that the Company will pay normal income-tax during the specified future
period. In the year in which the Company recognises MAT credit as an
asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax under the Income-tax
Act, 1961, the said asset is created by way of credit to the statement
of profit and loss and shown as ''MAT Credit Entitlement''. The Company
reviews the ''MAT Credit Entitlement'' asset at each reporting date and
writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
period.
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 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 renders services as considerations 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.
s) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement comprise cash at
bank and in hand, cheques in hand and short term investments with an
original maturity of three months or less.
t) Segment Reporting Policies
Identification of segments:
The Company''s 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:
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment Policies:
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
u) 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 firm 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.
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.
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 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
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 result of operations during the reporting period
end. 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
Value for individual fixed assets acquired from ''The Hindustan Times
Limited'' (the holding company) in an earlier year is allocated based on
the valuation carried out by independent expert at the time of
acquisition.
Other fixed assets are stated at cost less accumulated depreciation and
accumulated 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.
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.
The Company adjusts exchange differences arising on translation/
settlement of long-term foreign currency monetary items pertaining to
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 differences.
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.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
c) Depreciation
Depreciation on fixed assets (other than those acquired from the holding
company in earlier years) are provided on Straight Line Method at the
rates computed based on estimated useful life of the assets which are
greater than or equal to the corresponding rates prescribed in Schedule
XIV to the Companies Act, 1956 as mentioned below.
The Company has used the following rates to provide depreciation on its
fixed assets.
In respect of fixed assets acquired in an earlier year from the holding
company, 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 Rs.5,000 each are fully depreciated in the year of
acquisition.
Leasehold Land is amortized on a straight line basis over the period of
lease (ranging between 55 years to 95 years).
Leasehold Improvements are amortized on a straight line basis over the
useful life not exceeding 10 years or over the life of lease, whichever
is lower.
d) 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. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is refected in the statement of profit and loss in the year
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.
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.
The amortization period and the amortization method of the intangible
assets are reviewed at each financial year end for its expected useful
life and the expected pattern of economic benefits. If there is a
significant change in 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 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.
License fees are charged to statement of profit and loss at the rate of
4% of gross revenue for the reporting 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.
A summary of amortization policies applied to the Company''s intangible
assets is as below:
Useful life (in years)
Website Development 6
Software Licenses 5-6
License Fees (One time entry fee) 10
Music Contents (for Radio Business) 4
Software licenses acquired from the holding company, which are
estimated to have lower residual lives than that envisaged above, are
amortized over such estimated lower residual lives.
Software licenses costing below Rs.5,000 each are fully depreciated in
the year of acquisition.
e) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction year is capitalized
as part of the indirect construction cost to the extent the expenditure
is directly related to construction or is incidental thereto and
represents the marginal increase in such expenditure as a result of the
capital expansion. Other indirect expenditure (including borrowing
costs) incurred during the construction year, which is not related to
the construction activity nor is incidental thereto, are charged to the
statement of profit and loss. Related income earned during construction
period is adjusted against the total of the indirect expenditure.
f) Leases
Where the Company is 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 costs 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 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/ receipts are recognized as an
expense/income in the statement of profit and loss on a straight-line
basis over the lease term.
g) Borrowing costs
Borrowing cost includes interest and 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 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 higher of an asset''s or it''s cash-generating unit''s (CGU) net
selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that 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.
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.
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.
Investment Property
An investment in land or buildings, which is not intended to be
occupied substantially for use by, or in the operations of, the
company, is classifed as investment property. Investment properties are
stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalization
criteria are met and directly attributable cost of bringing the
investment property to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase
price.
Depreciation on building component of investment property is calculated
on a straight-line basis using the rate arrived at based on useful life
estimated by the management, or that prescribed under the Schedule XIV
to the Companies Act, 1956, whichever is higher. The Company has used
depreciation rate of 3.34%.
On disposal of an investment property, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
j) Inventories
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 and fnished 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 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.
Airtime Revenue
Revenue from radio broadcasting is recognized on an accrual basis on
the airing of client''s commercials.
Revenue from online advertising
Revenue from ''shine.com'' and ''hindustantimes.com'' by display of
internet advertisements are typically contracted for a period of one to
twelve months. Revenue in this respect is recognized over the period of
the contract, in accordance with the established principles of accrual
accounting. Unearned revenues are reported on the balance sheet as
deferred revenue.
Revenue from subscription of packages of placement of job postings on
''shine.com'' is recognized at the time the job postings are displayed
based upon customer usage patterns, or upon expiry of the subscription
package whichever is earlier
Revenue from job fairs
Revenue is recognized upon completion of the job fairs.
Revenue from resume services
Revenue is recognized once the resume has been completed.
Interest/Income from Investments
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 mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Dividend
Dividend Income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
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.
l) Foreign currency transactions
Foreign currency transactions and balances
(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 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
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
(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 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).
(v) Translation of integral foreign operation
The financial statements of an integral foreign operation are translated
as if the transactions of the foreign operation have been those of the
Company itself.
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 repoting 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.
Current income-tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
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 income-tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
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 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 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 the same taxation
authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent there is convincing evidence
that the Company will pay normal income-tax during the specified future
period. In the year in which the Company recognizes MAT credit as an
asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax under the Income-tax
Act, 1961, the said asset is created by way of credit to the statement
of profit and loss and shown as ''MAT Credit Entitlement''. The Company
reviews the ''MAT Credit Entitlement'' asset at each reporting date and
writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
period.
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 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 in the cash fow statement comprise cash at
bank and in hand, cheques in hand and short-term investments with an
original maturity of three months or less.
s) Segment Reporting Policies
Identification of segments:
The Company''s 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:
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment Policies:
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
t) 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 firm 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 confict with
the existing mandatory Accounting Standards, other Authoritative
pronouncements and other regulatory requirements.
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 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.
*Six (6) equity shares of Rs.2/- each aggregating to Rs.12/- have been
allotted on March 31, 2014 for a consideration other than cash pursuant
to the Scheme of Arrangement and Restructuring [Refer Note 34 (a)]. As
the financial statements are represented in Rs. lacs and number of shares
are represented in lacs above, thus the same has not been considered in
table above.
(b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of Rs.2
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 31 March 2014, the amount of per share dividend
recognized as distributions to equity shareholders was Rs.0.40
(Previous Year: s.0.40).
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 and subsidiary of holding company are as below:
As per 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) During the year, the Board of Directors at their meeting held on
14th May, 2013, approved buy-back of fully paid-up equity shares of the
Company having a face value of Rs.2/- , from the existing
shareholders/beneficial owners, other than the promoters/persons who are
in control of the Company, from the open market through stock
exchanges, at a price not exceeding Rs.110/- per equity share payable in
cash, for an aggregate amount not exceeding Rs.2500 Lacs. The Buy back
Scheme envisaged the Buy Back of Shares of minimum of 5,68,182 equity
shares and a maximum of 22,72,727 equity shares. Pursuant to above,
during the year ended March 31, 2014, the Company has bought and
extinguished 22,72,727 equity shares of Rs.2/- each. The shares
extinguished have been bought for an aggregate consideration of
Rs.1,880.84 lacs. The excess of aggregate consideration paid for Buy-Back
over the face value of shares so bought back and extinguished,
amounting to Rs.1,835.39 lacs, is adjusted against the Share Premium
Account. Further an amount of Rs.45.45 lacs (equivalent to nominal value
of shares bought back) has been transferred to Capital Redemption
Reserve from General Reserves.
*Securities Premium of Rs.Nil (previous year Rs.816, rounded off to Rs.0.01
lac) on equity shares issued pursuant to the Scheme of Arrangement and
Restructuring has been adjusted against defcit in the value of assets
over liabilities of the Job Portal business acquired under the said
Scheme [Refer Note 34 (a)].
1. Term loan from HDFC Bank carries interest @ PLR minus 7.75% p.a.
(Rate of Interest was linked to PLR for the frst 2 years from the date
of frst drawdown. Thereafter, the interest is reset by the bank on an
annual basis). The loan is repayable in 20 quarterly installments of
Rs.375 lacs each along with interest, from the date of disbursement,
viz., 08th June, 2009 and 19th June, 2009. The loan is secured by frst
pari passu charge on all movable fixed assets of the Company along with
Term Lenders (except assets financed out of the ECB from Standard
Chartered Bank) and frst pari passu charge by way of equitable mortgage
of immovable properties belonging to the Company situated at Greater
Noida (Plot No. 8, Udyog Vihar, Greater Noida, Gautam Budh Nagar,
201306). The loan is further secured by equitable mortgage by deposit
of title deeds of immovable properties situated at Noida (B-02, Sector
63, Noida 201307) and Mohali (C-164/165 Phase VIII-B Industrial Focal
Point, Mohali 160059). The loan is also secured by second charge on the
current assets of the Company.
2. External Commercial Borrowing from Standard Chartered Bank carries
interest @ 6 months USD Libor 1.20% spread p.a. payable semi
annually. The loan is repayable in 3 annual equal installments of USD
5,155,670 each , after 4 years from the date of frst drawdown, viz., 8
April, 2008 i.e. at the end of 4th,5th and 6th year. The total tenor of
the loan shall not exceed 6 years from date of frst drawdown. The loan
is secured by way of frst and Specific charge over certain movable plant
and machinery of the HT Media Limited, i.e:
- One Man Roland Off-Set Rotation Printing Press type - Regioman -
2009,
- Muller Martini Martini Mail Room System - 2009 stored or to be stored
at HT Media Limited godowns or premises or wherever else the same may
be.
3. External Commercial Borrowing from Citi Bank carries interest @ USD
3 months LIBOR 1.50% spread p.a. The loan is repayable in 8 semi
annual equal installments of USD 15,62,500 starting from December 31,
2013. The loan is secured by Parri Passu charge on company''s present &
future movable fixed assets at (A) Noida - B-2, sector 63, District
Gautam Budh Nagar, Noida -201307 (B) plot No.-8, Udyog Vihar Greater
Noida, Uttar Pradesh-201306, with HDFC Bank for their term loan and
First and exclusive charge in favour of Citibank N.A. on assets
acquired/to be acquired out of our ECB and LC facilities of USD 32.5
Mn, to secure Citibank''s ECB, LC and hedging limits. The loan is
further secured by pledge of Company''s investment in Fixed Maturity
Plans.
1. Buyer''s credit from BNP Paribas is secured by way of frst pari
passu charge over all moveable assets such as raw materials, stock-
in-process, fnished goods lying at various factories, godowns,
warehouses, etc, wherever situated or in transit, both present or
future and book debts of the Company and all book debts, outstanding
monies, receivables, claims, bills which are due and which may at any
time during the continuance of this security become due by any person,
firm, company or body corporate.
2. Buyer''s credit from Royal Bank of Scotland is secured by way of
frst pari passu charge on all current assets (both present and future)
in favour of bank.
3. Buyer''s credit from HDFC Bank is secured by Pari-passu charge on
all present and future current assets of the Company.
4. Buyer''s credit from Kotak Mahindra Bank is secured by frst
Pari-passu charge on all present and future current assets of the
Company including book debts, receivables, outstanding monies etc,
stock of raw material, semi fnished goods, related movables, together
with benefit of all rights thereto.
Plant & Machinery having a gross value of Rs.86.61 lacs (Previous year
Rs.86.61 lacs) towards Company''s proportionate share for right to use in
the Common Infrastructure for channel transmission (for its four
stations) built on land owned by Prasar Bharti and used by all the
broadcasters at respective stations as per the terms of bid document on
FM Radio Broadcasting (Phase II).
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 result of operations during the reporting period
end. 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
Value for individual Fixed Assets acquired from ''The Hindustan Times
Limited'' (the holding company) in an earlier year is allocated based
on the valuation carried out by independent experts.
Other Fixed Assets are stated at cost less accumulated depreciation and
accumulated 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.
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.
The Company adjusts exchange differences arising on
translation/settlement of long-term foreign currency monetary items
pertaining to 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 differences.
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.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
c) Depreciation
Depreciation on fixed assets (other than those acquired from the
holding company in earlier years) are provided on a Straight Line
Method at the rates computed based on estimated useful life of the
assets which are greater than or equal to the corresponding rates
prescribed in Schedule XIV to the companies Act, 1956.
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.
The Company has used the following rates to provide depreciation on its
fixed assets.
Assets costing below Rs.5,000 each are fully depreciated in the year of
acquisition.
Leasehold Land is amortized on a straight line basis over the period of
lease.
Leasehold Improvements are amortized on a straight line basis over the
useful life not exceeding 10 years or over the life of lease, whichever
is lower.
d) 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. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
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. 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.
The amortization period and the amortization method of the intangible
assets are reviewed at each financial year end for its expected useful
life and the expected pattern of economic benefits. If there is a
significant change in 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.
License fees are charged to statement of profit and loss at the rate of
4% of gross revenue for the reporting 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.
A summary of amortization policies applied to the company''s
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 Rs.5,000 each are fully depreciated in
the year of acquisition.
e) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction year is capitalized
as part of the indirect construction cost to the extent the expenditure
is related to construction or is incidental thereto and represents the
marginal increase in such expenditure as a result of the capital
expansion. Other indirect expenditure (including borrowing costs)
incurred during the construction year, which is not related to the
construction activity nor is incidental thereto, are charged to the
statement of profit and loss. Related income earned during construction
period is adjusted against the total of the indirect expenditure.
f) Leases
Where the Company is 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 costs 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 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/income in the statement of profit and loss on a
straight-line basis over the lease term.
g) Borrowing costs
Borrowing cost includes interest and 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.
h) 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 higher of an asset''s or it''s cash-generating unit''s
(CGU) net selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
fifth year.
Impairment losses of continuing operations, 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.
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. 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.
Investment Property
An investment in land or buildings, which is not intended to be
occupied substantially for use by, or in the operations of, the
company, is classified as investment property. Investment properties
are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalization
criteria are met and directly attributable cost of bringing the
investment property to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase
price.
Depreciation on building component of investment property is calculated
on a straight-line basis using the rate arrived at based on useful life
estimated by the management, or that prescribed under the Schedule XIV
to the Companies Act, 1956, whichever is higher. The Company has used
depreciation rate of 3.34%.
On disposal of an investment property, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
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 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 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 & 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 client''s commercials.
Revenue from online advertising
Revenue from ''www.shine.com'' and ''www.hindustantimes.com'' by
display of internet advertisements are typically contracted for a
period of one to twelve months. Revenue in this respect is recognized
over the period of the contract, in accordance with the established
principles of accrual accounting. Unearned revenues are reported on the
balance sheet as deferred revenue.
Revenue from subscription of packages of placement of job postings on
''www.shine.com'' is recognized at the time the job postings are
displayed based upon customer usage patterns, or upon expiry of the
subscription package whichever is earlier
Revenue from job fairs
Revenue is recognized upon completion of the job fairs.
Revenue from resume services
Revenue is recognized once the resume has been completed.
Interest/Income from Investments
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 mutual funds is recognized based on the yield
earned and to the extent of its reasonable certainty.
Dividend
Dividend Income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
Commission income
Commission income from sourcing of advertisement orders on behalf of
other entities'' publications is recognised on printing of the
advertisement in those publications.
l) Foreign currency transactions
Foreign currency transactions and balances
(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 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
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
(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).
(v) Translation of integral foreign operation
The financial statements of an integral foreign operation are
translated as if the transactions of the foreign operation have been
those of the company itself.
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 repoting date. These are reviewed at each
reporting 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 the statement of Profit and loss in the year of
provision.
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. ihe tax rates and the 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 directly in equity is
recognized in equity and not in the statement of profit and loss.
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 income-tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
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 the same taxation
authority.
Minimum Alternate iax (MAi) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognises MAT credit
available as an asset only to the extent there is convincing evidence
that the Company will pay normal income- tax during the specified
future period. In the year in which the Company recognises MAi credit
as an asset in accordance with the Guidance Note on Accounting for
Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as ''MAT Credit Entitlement''.
The Company reviews the ''MAT Credit Entitlement'' asset at each
reporting date and writes down the asset to the extent the Company does
not have convincing evidence that it will pay normal tax during the
specified period.
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 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. ihe 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 in the cash flow statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
s) Segment Reporting Policies Identification of segments:
The company''s 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:
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
t) 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 firm 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) 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, 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 result of operations during the reporting period
end. 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
Value for individual Fixed Assets acquired from 'The Hindustan Times
Limited' (the holding company) in an earlier year is allocated based on
the valuation carried out by independent experts.
Other Fixed Assets are stated at cost less accumulated depreciation and
accumulated 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.
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.
From accounting periods commencing on or after 7 December 2006, 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.
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.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings, etc on the leased premises at various locations.
d) Depreciation
Depreciation on fixed assets (other than those acquired from the
holding company in earlier years) are provided on a Straight Line
Method at the rates computed based on estimated useful life of the
assets which are greater than or equal to the corresponding rates
prescribed in Schedule XIV to the Companies Act, 1956.
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.
Leasehold Land is amortized on a straight line basis over the period of
lease.
Leasehold Improvements are amortized on a straight line basis over the
useful life not exceeding 10 years or over the life of lease, whichever
is lower.
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. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
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. 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.
The amortization period and the amortization method of the intangible
assets are reviewed at each financial year end for its expected useful
life and the expected pattern of economic benefits. If there is a
significant change in 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.
License fees are charged to statement of Profit and Loss at the rate of
4% of gross revenue for the reporting 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.
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 year is capitalized
as part of the indirect construction cost to the extent the expenditure
is related to construction or is incidental thereto and represents the
marginal increase in such expenditure as a result of the capital
expansion. Other indirect expenditure (including borrowing costs)
incurred during the construction year, which is not related to the
construction activity nor is incidental thereto, are charged to the
statement of Profit & Loss. Related income earned during construction
period is adjusted against the total of the indirect expenditure.
g) Leases
Where the Company is 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 costs 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 classified as
operating leases. Operating lease payments/receipts are recognized as
an expense/ income 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 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 assets recoverable amount. An assets recoverable amount
is higher of an assets or its cash-generating units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company's cash- generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
fifth year.
Impairment losses of continuing operations, 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.
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.
Investment Property
An investment in land or buildings, which is not intended to be
occupied substantially for use by, or in the operations of, the
company, is classified as investment property. Investment properties
are stated at cost, net of accumulated depreciation & accumulated
impairment losses, if any.
The cost comprises purchase price, borrowing costs if capitalization
criteria are met and directly attributable cost of bringing the
investment property to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase
price.
Depreciation on building component of investment property is calculated
on a straight-line basis using the rate arrived at based on useful life
estimated by the management, or that prescribed under the Schedule XIV
to the Companies Act, 1956, whichever is higher. The Company has used
depreciation rate of 3.34%.
On disposal of an investment property, the difference between it's
carrying amount and net disposal proceeds is charged or credited to the
statement of Profit and Loss.
k) Inventories
Inventories are valued as follows:
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. 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 client's commercials.
Interest/Income from Investments 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 mutual funds
is recognized based on the yield earned and to the extent of its
reasonable certainty.
Dividend
Dividend Income is recognized when the Company's right to receive the
dividend is established by the reporting date.
Commission income
Commission income from sourcing of advertisement orders on behalf of
other entities' publications is recognised on printing of the
advertisement in those publications.
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
i. Exchange differences, in respect of accounting years 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 year, 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. For
this purpose, the Company treats a foreign monetary item as
"long-term foreign currency monetary items", if it has a term of 12
months or more at the date of origination. Exchange differences in
other long term foreign currency monetary items, are accumulated in a
"Foreign Currency Monetary Item Translation Difference Account" in
the Company's financial statements and amortized over the remaining
life of such monetary item.
ii. 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. Any gain/
loss arising on forward contracts which are long- term foreign currency
monetary items is recognized in accordance with para i) above
iii. 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 repoting date. These are reviewed at each
reporting 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 the statement of Profit and Loss in the year of
provision.
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.
Current income-tax relating to items recognized directly in equity is
recognized in equity and not in the statement of Profit and Loss.
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 income-tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of Profit and Loss.
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 to the same taxable entity and the same
taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognises MAT credit
available as an asset only to the extent there is convincing evidence
that the Company will pay normal income-tax during the specified future
period. In the year in which the Company recognises MAT credit as an
asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax under the Income- tax
Act, 1961, the said asset is created by way of credit to the statement
of Profit and Loss and shown as 'MAT Credit Entitlement'. The Company
reviews the 'MAT Credit Entitlement' asset at each reporting date and
writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
period.
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 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 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.
t) Segment Reporting Policies Identification of segments:
The Company's 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:
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment Policies:
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
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
(a) Fixed assets Value for individual Fixed Assets acquired from The
Hindustan Times Limited (the holding company) in an earlier year is
allocated based on the valuation carried out by independent experts.
Other Fixed Assets arestated at cost less accumulateddepreciation and
impairment losses, if any. Cost comprises
thepurchasepriceandanydirectlyattributablecost of bringing theasset 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 theyeartill
such assetsarereadyfortheir intended use.
Leasehold improvements represent expenses incurred towards civil works,
interior furnishings.etcon the leased premises at various locations.
(b) Depreciation
Leasehold Land is amortised overthe primary period of lease. 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 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 lifeof 5 years
as technically assessed by an independent expert. Assets costing below
?5,000 each are fully depreciated in theyear 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 greater than or
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 the holding company
in an earlier year is 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 maybe.
Software licenses costing below ?5,000 each are fully depreciated in
theyear of acquisition.
Website Development
Cost relating to website development is capitalized and amortized over
their estimated useful lives of sixyears on a straight line basis.
License Fees
OneTime 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.
MusicContents
Cost relating to music contents, which are purchased, is capitalized
and amortised on a straight line basis overtheirestimated useful lives
of fouryears.
(d) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction year 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 year, which is not related to the
construction activity nor is incidental thereto is charged to the
Profit & Loss Account. Incomeearned during construction year is
adjusted against the total of theindirect 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
arecapitalised.
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.
Lease where the lessor effectively retains substantially all the risks
and benefits of ownership over the leased term, are classified as
operating leases. Operating lease payments/receipts are recognized as
an expense/income in the Profit and Loss Account on a straight-line
basis overthe lease term.
(f) Investments
Investments that are readily realizable 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
investmentsarecarried at lower of cost and fairvaluedeterminedonan
individual investment basis. Long-term investments are carried at cost,
however, provision for diminution in value is made to recognise a
decline other than a temporary in the value of the investments.
(g) Inventories
Inventories arevaluedas follows:
Rawmaterials.storesandspares 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 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 realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make thesale.
(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 thesignificant 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 theagreement.
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 itsreasonablecertainty
Dividend
Revenue is recognized if the right to receive payment is established by
the balancesheet date.
Commission Income
Commission Income from sourcing of advertisement orders on behalf of
other entities publications is accruedon printing of theadvertisement
in thepublications. (0 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 atthedateof 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 existedwhen the
values weredetermined.
Exchange differences
Exchange differences, in respect of accounting years commencing on or
after December 07, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable 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 year of such long-term
asset/liability but not beyond accounting year ending on or beforeMarch
31,2011.
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
incomeoras expenses in theyearin which theyarise.
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 incomeover 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 expenseforthe
year.
(j) Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund and Pension
Schemes are defined contribution schemes and thecontributions
arecharged to the Profit and Loss Account of the year when the
contributions to the respective funds are due. There are no other
obligations otherthanthecontributionpayableto the respective funds.
ii. Gratuity is a defined benefit plan and is provided for on the basis
of an actuarial valuation carried out as per projected unit credit
(PUC) 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 (PUC) 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
(i) 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 specifictotheasset.
(ii) After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
(I) Provisions
A provision is recognized when theCompany 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 Profitand Loss Account in the year
of provision.
(m) IncomeTaxes
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 IncomeTax reflects the impact of current
year timing differences between taxable income and accounting income
for the year and reversalof timing differencesofearlieryears.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balancesheet date. Deferred
taxassets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current taxassets 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 againstfuture 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
availableagainst which such deferred taxassets 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,
asthecasemaybe.thatsufficientfuturetaxableincomewillbeavailable. MAT
credit is recognized as an asset only when and to theextent 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-taxduringthespecified
period.
(n) EarningsPerShare
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 reversesharesplit (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
yearareadjustedforthe 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 year of the
option on a straight line basis.
(p) Cash and Cash equivalents
Cash and Cash equivalents in the Cash Flow Statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less. 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
theCompanyaresegregated.
(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
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.
(r) Segment Reporting Policies Identification of segments:
TheCompanys 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.
Intersegment 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 preparingand presenting
thefinancialstatements of theCompany asa whole.
(s) Broadcast License Fees
License fees are charged to Profit and Loss account at the rate of 4%
of gross revenue for the year or 10% of Reserve One Time Entry Fee
(ROTEF) for the concerned city, whichever is higher.Gross Revenue
forthis purpose is revenuederived 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 thecity
Mar 31, 2010
1. Nature of operations
The Company publishes ÃHindustan TimesÃ, an English daily, and ÃMintÃ,
a Business paper daily except on SundayÃ. The Company is also engaged
into the business of providing entertainment, radio broadcast and all
other related activities through its Radio Stations operating under
brand name ÃFever 104Ã in cities of Delhi, Mumbai, Kolkata and
Bangalore.
Till November 2009, the Company was also engaged in publishing
ÃHindustanÃ, a Hindi Daily and two monthly magazines ÃNandan and
KadambaniÃ. With effect from December 1, 2009, the Company has sold the
ÃHindi Business Undertakingà comprising of ÃHindustanÃ, the Hindi
Daily, ÃNandan and KadambaniÃ, Hindi magazines on a slump sale basis to
Hindustan Media Ventures Limited, its subsidiary company.
The Company derives revenue primarily from the sale of the above
mentioned publications, advertisements published therein, by
undertaking printing jobs and airtime advertisements aired at the
aforesaid radio stations. The Company also derives revenue from the
internet business, by displaying advertisements on its websites
Ãhindustantimes.comà and Ãlivemint.comÃ.
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
except in case of assets for which provision for impairment is made and
revaluation is carried out. 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 amount 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 managementÃs best
knowledge of current events and actions, actual results could differ
from these estimates.
4. Statement of Significant Accounting Policies
(a) Fixed assets
Value for individual fixed assets acquired from The Hindustan Times
Limited (the
holding company) in an earlier year is 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 year 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 amortized over the primary period of lease.
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 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 the holding company
in an earlier year is 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
amortized 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 amortized on a straight line basis over their estimated useful life
of four years.
(d) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction year 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 year, which is not related to the
construction activity nor is incidental thereto is charged to the
Profit & Loss Account. Income earned during construction year 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
capitalized. 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.
Lease where the lessor effectively retains substantially all the risks
and benefits of ownership over the leased term, are classified as
operating leases. Operating lease payments/receipt are recognized as an
expense/income in the Profit and Loss Account on a straight-line basis
over the lease term.
(f) Investments
Investments that are readily realizable 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 a temporary in the value of the investments.
(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 includes direct materials
and a proportion of manufacturing overheads based on normal operating
capacity.
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 clientÃs 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.
Commission Income
Commission Income from sourcing of advertisement orders on behalf of
other entitiesà publications is accrued on printing of the
advertisement in the publications.
(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 years commencing on or
after December 7, 2006, arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable 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 ÃForeign Currency Monetary Item
Translation Difference Accountà in the enterpriseÃs financial
statements and amortized over the balance year of such long-term
asset/liability but not beyond accounting year ending on or before
March 31, 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 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 is provided for on the basis
of an actuarial valuation carried out as per projected unit credit
(PUC) 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 (PUC) 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 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
Ta x 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 realised 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 year. 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
year.
(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 right 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 year of the
option on a straight line basis.
(p) Cash and Cash equivalents
Cash and Cash equivalents in the Cash Flow Statement comprise cash at
bank and in hand and short term investments with an original maturity
of three months or less.
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
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.
(r) Segment Reporting Policies Identification of segments:
The CompanyÃs 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.
(s) Broadcast License Fees
License fees are charged to profit and loss account at the rate of 4%
of gross revenue for the year 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.