Mar 31, 2023
Capital work in progress as at March 31, 2023 and March 31, 2022 comprises expenditure incurred mainly for the Building in the course of construction.
The Company accounts for capitalization of property, plant and equipment to the extent applicable through capital work in progress and therefore the movement in capital work-in-progress is the difference between closing and opening balance of capital work-in-progress as adjusted in additions to property, plant and equipment.
These assets are towards Companyâs proportionate share for right to use in the Common Infrastructure for channel transmission 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 .
iv. Additional information for which impairment loss/reversal of impairment has been recognized are as under:
1) Nature of asset :Plant and Machinery
2) Amount of impairment : INR 73 lakhs (Previous Year: 4 lakhs)
3) Reason of impairment : On account of physical damage
4) Amount of impairment reversal: INR NIL Lakhs (Previous Year: INR 58 lakhs)
5) Reason of reversal impairment : Sale of asset
1) Nature of asset: Investment properties
2) Amount of provision / (reversal of provision) for impairment: INR (385) lakhs (Previous Year: INR 477 lakhs)
3) Reason for provision/(reversal of provision) for impairment: Fair value being recoverable amount was determined for disclosure requirement. The same was compared with the carrying amount to assess impairment.
The management has determined that the investment properties consist of two classes of assets residential and commercial based on the nature, characteristics and risks of each property.
As at March 31, 2023 and March 31, 2022, the fair values of the properties are INR 37,530 lakhs and INR 43,023 lakhs respectively. These valuations are based on valuations performed by a registered independent valuer who is specialist in valuing these types of investment properties. A valuation model in accordance with Ind AS 113 has been applied.
The company has no restrictions on the realisability of its investment properties. The fair values of the fully constructed investment properties held by the Company in Lavasa Corporation Limited are not reliably measurable on a continuing basis. The market for comparable properties is inactive and alternative reliable measurements of fair value are not available.
There are contractual obligations of INR 1,110 lakhs as on March 31, 2023 (Previous Year: INR 392 lakhs) to purchase investment properties whereas there are no contractual obligations to construct or develop investment properties or for repairs and enhancements.
Estimation of fair value
During the current year ended March 31, 2023 and the previous year ended March 31, 2022, the fair value of investment property is based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuation has been determined basis the market approach by reference to sales in the market of comparable properties. However, where such information is not available, current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences, has been considered to determine the valuation. All resulting fair value estimates for investment properties are included in Level II.
i) Impairment of investments in HT Music and Entertainment Company Limited (HTME) amounting to INR 202 lakhs has been made during the current year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the value in use which was determined to be INR 2,002 lakhs using discount rates of 15%. The same is being presented as part of Exceptional item.
(ii) Impairment of investments in Next Mediaworks Limited (NMW) and its subsidiary Next Radio Limited (NRL) amounting to INR 564 lakhs and INR Lakhs 1,321 Lakhs respectively has been made during the current year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the value in use which was determined to be INR 396 lakhs and INR 735 lakhs respectively using discount rates of 14.4% . The same is being presented as part of Exceptional item.
(iii) Impairment of investments in HT Overseas Pte. Limited amounting to INR Lakhs 3,161 lakhs has been made during the current year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the Net Assets Value (NAV) which was determined to be INR Lakhs 846 lakhs. The same is being presented as part of Exceptional item.
Note II:
(i) Impairment of investments in HT Overseas Pte. Limited amounting to INR Lakhs 2,614 lakhs has been made during the previous year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the value in use which was determined to be INR Lakhs 4,275 lakhs using discount rates of 14.5% . The same is being presented as part of Exceptional item.
ii) Impairment of investments in HT Music and Entertainment Company Limited (HTME) amounting to INR Lakhs 821 lakhs has been made during the previous year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the value in use which was determined to be INR Lakhs 2,204 lakhs using discount rates of 16%. The same is being presented as part of Exceptional item.
Terms/ rights attached to equity shares
The Company has only one class of equity shares having par value of INR 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.
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.
(i) During the FY 2006-07, an amount of INR 2,000 Lakhs had been transferred from statement of Profit and Loss account to Capital redemption reserve on account of 2,000,000 1% Non-cumulative Redeemable preference shares of INR 100/- each, were redeemed on September 16, 2006.
(ii) The Board of Directors at their meeting held on May 14, 2013, approved buy-back of fully paid-up equity shares of the Company having a face value of INR 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 INR 110/- per equity share payable in cash, for an aggregate amount not exceeding INR 2,500 lakhs. 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 INR 2/- each. The shares extinguished had been bought for an aggregate consideration of INR 1,881 lakhs. The excess of aggregate consideration paid for Buy-Back over the face value of shares so bought back and extinguished, amounting to INR 1,835 lakhs, was adjusted against the Share Premium Account. Further an amount of INR 45 Lakhs (equivalent to nominal value of shares bought back) has been transferred to Capital Redemption Reserve from General Reserves.
Note I- Rupee term loan (RTL) from banks (secured)
1. RTL loan of INR 10,000 lakhs from bank carries interest @ 5.95% p.a. The loan is repayable in five semi annual equal installments of INR 2,000 lakhs starting from March 26, 2022. The loan is secured by
- 2nd charge on Moveable Fixed Assets of the company;
- Mortgage of certain properties of the company;
- Pledge of Debt Mutual Funds.
2. RTL loan of INR 10,000 lakhs from bank carries interest @ 5.75% p.a. The loan is repayable in 13 Quarterly equal installments of INR 769 lakhs starting from June 28, 2022. The loan is secured by exclusive charge by way of Equitable mortgage on certain property of the company.
Note II- Non convertible debentures (secured)
- INR 9,600 was raised through issuance of Non Convertible debentures in December 2021. It carries interest @ 5.95%
p.a.(Payable Annualy). This is repayable in 3 annual equal installments of INR 3,200 lakhs starting from December 31, 2022. The loan is secured by 1st charge on Moveable Fixed Assets of Company.
Note III- Cash credit/ overdraft from banks (secured)
- Outstanding cash credit/ overdraft from bank was drawn @ 7.60% p.a and Cash credit/ overdraft is payable on demand. The cash credit/ overdraft from banks are secured by lien on bank deposits.
Note IV- Short term loan from banks (secured)
- Outstanding term loan from bank was drawn during the quarter ended March 31, 2023 at effective rate ranging from 7.09% to 7.94% (linked to T-bill rate) and due for repayment in FY 23-24. The loan is secured by parri passu charge on current assets of company as well as on Mutual Funds.
Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
Note V- Buyerâs credit from bank (unsecured)
- Outstanding buyerâs credit loan from bank was drawn in various tranches from July 13, 2022 till March 13, 2023 @ average Interest Rate of 5.62% p.a and are due for repayment during FY 23-24.
Note VI- Short term loan from banks (unsecured)
- Outstanding term loan from bank was drawn during the quarter ended March 31, 2023 at effective rate ranging from 7.75% to 7.76% linked to T-bill rate and due for repayment in FY 23-24.
Note VII- Short term foreign currency non- repatriable (FCNR) loan from banks (unsecured)
- Outstanding short term FCNR loan from bank was drawn @6.25% p.a during quarter ended March 31, 2023 and are due for repayment during FY 23-24.
Note VIII- Inter-corporate deposit (unsecured)
- Inter-corporate deposit (ICD) was drawn in various tranches in year 2019-20 onwards @ 6.50% p.a. compounded annually and is repayable on demand. The interest shall become due and payable along with principal.
Impairment of loan given to Next Radio Limited (NRL) subsidiary of Next Mediaworks Limited (NMW) amounting to INR 5,098 lakhs has been made during the current year on account of recoverable amount lower than the carrying amount. The recoverable amount is based on the value in use which was determined to be INR lakhs 11,849 lakhs using discount rates of 14.4%.
i) Finance lease
The Company has entered into a finance lease arrangement with its Holding Company.
During the year the Company recognised interest income on lease receivables of INR 109 Lakhs (Previous year : INR 118 lakhs)
ii) Operating lease
The Company has entered into operating leases on its investment property and property, plant & equipment.
Rental income recognised by the Company during 2022-23 is INR 1,162 lakhs (Previous year : INR 1,119 lakhs).
The following table sets out a maturity analysis of lease payments (under non-cancellable operating lease), showing the undiscounted lease payments to be received after the reporting date-
Basic earnings per share amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the profit/(loss) attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of services gets a gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The gratuity plan is managed through âHT Media Limited Working Journalist Gratuity Fundâ & âHT Media Limited Non Journalist & Other Employees Gratuity Fundâ. The funds maintained by âHT Media Limited Working Journalist Gratuity Fundâ & âHT Media Limited Non Journalist & Other Employees Gratuity Fundâ represent plan assets for the Company.
The following tables summarises the components of net employee benefits recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet :
Changes in the defined benefit obligation and fair value of plan assets as at March 31, 2023 :
In accordance with the Securities and Exchange Board of India (Share Based Employee benefits) Regulations, 2014 and Ind-AS 102 Share-based Payment, the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the scheme, relevant disclosures are given below.
The Company has given interest-free loan to HT Media Employee Welfare Trust which in turn has purchased Equity Shares of HT Media Limited from the open market, for the purpose of granting Options under the âHTML Employee Stock Option Schemeâ (the Scheme), to eligible employees of group.
The Options granted under the Scheme shall vest as per the Schedules of vesting period which are hereinafter referred to as âPlan Bâ and âPlan Câ . Options granted under above mentioned plans are exercisable for a period of 10 years after the scheduled vesting date of the last tranche of the Options as per the Scheme. Options granted under Plan A had completely expired in FY 19-20, hence no disclosure is shown in that respect.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value .
The employee compensation cost (accounting charge for the year) during the year calculated using the fair value of stock options is INR 1.8 Lakhs (March 31, 2022: INR 9 Lakhs).
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is INR NIL (March 31, 2022: INR NIL)
A. Details of these plans are given below:
A stock option gives an employee, the right to purchase equity shares of Firefly e-Ventures Limited at a fixed price within a specific period of time.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value .
The employee compensation cost (accounting charge for the year ended March 31, 2022) calculated using the intrinsic value of stock options is INR Nil.
HT Media Limited has given loan to âHT Group Companies - Employee Stock Option Trustâ which in turn has purchased shares of Hindustan Media Venture Limited (HMVL) - Subsidiary Company of HT media Limited, for the purpose of granting Options under the âHT Group Companies -Employee Stock Option Schemeâ (the Scheme), to eligible employees of the group.
Details of these plans are given below:
Options granted are exercisable for a period of 10 years after the scheduled vesting date of last tranche as per the Scheme.
Weighted average fair value of the options outstanding is INR 35.92 (Previous year INR 35.92) per option.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value .
The employee compensation cost (accounting charge for the year) calculated using the fair value of stock options is INR 2.8 Lakhs (March 31, 2022: INR (5) Lakhs)
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is Nil (March 31, 2022: INR Nil)
Note 35 : Commitments and contingencies
A. Commitments
(INR Lakhs) |
||
Particulars |
March 31, 2023 |
March 31, 2022 |
i) Capital commitments |
||
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances) |
1,770 |
984 |
ii) Other commitments- commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital Goods (âEPCGâ) Scheme for importing capital goods at a concessional rate of customs duty against submission of bonds in September, 2008. Under the terms of the respective scheme, the Company is required to export goods or/and services of FOB value equivalent to eight times the duty saved in respect of licenses within eight years from the date of issuance of license. Accordingly, the Company was required to export goods and services of FOB value of INR 20,017 lakhs by September 18, 2018 (after extended time). However, due to oversight of the assessing officers of Customs at the time of clearance of the goods, unconditional concession from BCD of 5% prescribed vide Sr. No. 267A of the Notification No. 21/2002-Cus dated 01 March 2002 as also CVD of 8% under Sr. No. 12 of Notification No. 6/2006-CE dated 01 March 2006 was not provided/applied. As a result of the said omission, the duty foregone/ duty saved amount has been incorrectly computed and consequently, the export obligation also been incorrectly computed.
The duty saved amount under the EPCG Scheme is ascertained basis the actual import duty of capital goods effected by a license holder, such as the Petitioner (HT Media) in the present case. The Company filed a letter in March, 2019 with custom authorities for rectification in custom tariff rates used to compute âduty saved amountâ and for corresponding amendment in export obligation as mentioned above thereby reducing the actual export obligation. This letter was rejected by custom authorities in May 2019 against which the Company has filed a writ petition vide Civil Writ Petition No. 1384/2020, before Bombay High Court in August 2019.
The department has filed its reply to the Writ Petition. The matter came up for hearing on 27.04.2020 when Honâble High Court of Bombay has directed the Customs Department that no coercive action shall be taken against HT Media and adjourned the matter for 9th June, 2020.
However due to Covid-19 and limited functioning of the High Court the matter didnât come up for hearing until 20.01.2023. On 20.01.2023 it got adjourned for two weeks and matter was listed for 20.03.2023, thereafter 18.04.2023 for filling amended petition. On 18.04.2023, Respondent (Commissioner of Custom) has taken adjournment, further the matter is listed for 12.06.2023. No coercive action is continuing.
Basis management assessment, the balance export obligation as on March 31, 2023 is INR Nil (Previous Year: INR Nil).
iii) |
Commitment to invest in specific funds |
(INR Lakhs) |
||||
Particulars |
March 31, 2023 |
March 31, 2022 |
||||
Amount Invested |
Future Commitment |
Amount Future Invested Commitment |
||||
B. Gua |
Blume Ventures Fund IA |
INR 300 lakhs |
- |
INR 300 lakhs - |
||
Trifecta Venture Debt Fund-I |
INR 2,000 lakhs |
- |
INR 2,000 lakhs - |
|||
Trifecta Venture Debt Fund-II |
INR 1,000 lakhs |
- |
INR 1,000 lakhs - |
|||
Paragon Partners Growth Fund - I |
INR 2,000 lakhs |
- |
INR 2,000 lakhs - |
|||
WaterBridge Ventures I |
INR 500 lakhs |
- |
INR 500 lakhs - |
|||
Stellaris Venture Partners India I |
INR 1,000 lakhs |
INR 130 lakhs |
INR 1,000 lakhs INR 130 lakhs |
|||
Fireside Ventures Investment Fund I |
INR 477 lakhs |
INR 23 lakhs |
INR 467 lakhs INR 33 lakhs |
|||
rantees |
(INR Lakhs) |
|||||
Particulars |
March 31, 2023 |
March 31, 2022 |
||||
Bank guarantee |
2,246 |
2,100 |
||||
Corporate guarantee in favor of the banks on behalf of related party |
2,960 |
2,960 |
C. Letter of support
The Company has given letter of support to Next Mediaworks Limited (subsidiary) and its subsidiary (Next Radio Limited) to enable the said subsidiaries to continue its operations for the financial year ended March 31, 2023 and for additional period of 12 months from March 31, 2023.
D. Contingent liabilities
A. Claims against the Company not acknowledged as debts
Legal claim contingency
(i) In respect of income tax demand under dispute INR 420 lakhs (previous year INR 877 lakhs) against the same the Company has paid tax under protest of INR 402 lakhs lakhs (previous year INR 765 lakhs). The tax demands are mainly on account of disallowances of expenses claimed by the Company under the Income Tax Act. Based on management assessment and current status of the above matter, the management is confident that no provision is required in the financial statements as on March 31, 2023.
(ii) Service tax authorities have raised additional demands for INR 61 lakhs (Previous Year: INR 61 lakhs) for various financial years against the same the Company has paid tax under protest of INR 61 lakhs (previous year INR 61 lakhs). Based on management assessment and current status of the above matter, the management is confident that no provision is required in the financial statements as on March 31, 2023.
The above listed tax demands are being contested by the Company before the appropriate appellate authorities. Management believes that Companyâs tax positions are likely to be upheld by such authorities. No tax expenses have been accrued in the standalone financial statements for these tax demands.
(iii) During the year ended March 31, 2005, the Company acquired the printing undertaking at New Delhi from The Hindustan Times Limited (âHTLâ). Ex-workmen of HTL challenged the transfer of business in the industrial dispute before Industrial Tribunal-I, New Delhi (âTribunalâ). The case was decided by an award by Industrial Tribunal, on January 23, 2012, wherein the workmen were granted reinstatement and relief of treating them in continuity of services under terms and conditions of service as before their alleged termination w.e.f. October 3, 2004. As per the award, they will not be entitled to any notice pay or compensation u/s 25 FF of Industrial Dispute Act. The said notice - pay or compensation, if any, received by them, will have to be refunded to the Company.
On the issue of Back Wages the workmen also filed the Execution Proceeding for Back wages on April 2, 2012, Execution Court vide its order dated October 8, 2012, held that âNo Back Wagesâ have been granted and decree in relation thereto cannot be executedâ. The Execution Court vide its order dated January 04, 2013 directed the management to reinstate the workman without insisting for refund of notice pay and retrenchment compensation. The said order of the Ld. Execution Court was challenged before High Court of Delhi. Since HTL has no factory, it offered notional reinstatement & Salary w.e.f. April 18, 2013. HTL informed the High Court during the pendency of the petition that since HTL is currently engaged in non-industrial activities, it can offer non-industrial work to a maximum of 38 (thirty eight) workmen based on seniority. It was also submitted that HTL will accordingly exercise its rights and remedies as available under the Industrial Disputes Act, 1947 qua the remaining workmen. Accordingly, HTL issued letters of posting to 38 workmen on December 4, 2013 and paid compensation under Section 25FFF of the Industrial Dispute Act, 1947 to remaining 167 workmen. Single Bench of Delhi High Court on September 14, 2015 delivered the judgment wherein Court relied on the Judgment of Division Bench and held that the parties will be at liberty to pursue the logical corollary. The proceedings before the Execution Court re-started after judgment of Single Bench of Delhi High Court.
The Execution Court vide order date 14.05.2016 directed HTL to reinstate the workmen as earlier reinstatement was not in accordance with Award dated January 23, 2012 and also directed to make payment of wages accordingly. HTL challenged the said order of Execution Court before single bench of Honâble Delhi High Court.
Vide order dated August 27, 2018 Single Judge, Delhi High Court dismissed the Writ and directed the Management to reinstate the workmen along with the benefits of âcontinuity of servicesâ under terms and conditions of the service as before their termination on October 03, 2004.
Hence, appointment letter dated 07.01.2019 were accordingly issued to Workmen and HTL started paying salary to them from 07.01.2019. Their amount for the period between 01.01.2014 to 31.08.2018 was also paid in terms of High Court order dated 27.08.2018. The Management of HTL filed appeal to the Division Bench against the said judgment dated August 27, 2018 the Division Bench on October 16, 2018 dismissed the appeal on technical / maintainability ground without getting into merits of the matter.
The Special Leave Petitions (SLPâs) of the Management of HTL challenging the orders dated August 27, 2018 read with order dated September 07, 2018 passed in Review Petition by the Single Judge of Delhi High Court is pending before the Honâble Supreme Court of India. The SLPs was admitted by Apex Court by issuing of âNoticeâ to opposite parties without staying the execution proceeding but with directions that âconsequential action will, naturally, be subject to the outcome of the Special Leave Petitionâ.â
The Management of HTL issued letters of reinstatements and made payments to the workmen in accordance with order dated December 24, 2018 before the Ld. Execution court against personal Bond for refund of the amount so paid in case Supreme Court decides the matter in its favour.
Ld. Execution Court vide order dated 27.03.2019, 23.05.2019 and 27.05.2019 passed certain orders which were challenges by HTL vide CM(M) 529/2019 W.P.(C) 6328/2019 and W.P.(C) 6505/2019 before Delhi High Court. All 3 matters were listed before Delhi High Court for arguments on various dates and finally on October 22, 2019 these petitions were withdrawn with liberty to challenge final order passed by Execution Court in accordance with law and the Honâble High Court directed the execution court to decide the execution petition finally by comprehensively dealing with all the contentions raised by the parties regarding its very jurisdiction as also regarding the scope and powers of the execution Court.
The Workmen did not join duty at the transferred locations. Hence in accordance with order dated September 5,2019 passed by the Honâble Execution Court no salaries are being paid to Workmen w.e.f. September 9, 2019 on âno work no payâ principle.
The Execution Court has decided the execution petition vide order dated 26.02.2022. The conclusions directions summarized by the Execution Court, are as under:
1. All 143 eligible Decree Holders (DHs) stood already reinstated on 07.01.2019 in terms of award dated 23.01.2012. The reinstatement letter in line with earlier reinstatement letter dated 07.01.2019 be issued to workman Sanjay as considering his date of birth given in his PAN card, he is yet to attain the age of 58.
2. The age of superannuation shall be 58 years for the purpose of reinstatement and calculations of dues of reinstated workmen.
3. All the subsequent issues (1) placement of DH in non-printing establishment or non- grant of benefit WJ Act on that count; (2) alleged transfers of DHs outside Delhi; (3) retiring workmen attaining 58 years after 07.01.2019 without giving them extension of 2 years; (4) fresh retrenchment under any provision of ID Act, are beyond the scope of powers and jurisdiction of the executing court and hence, cannot be agitated here or decided by this court in the present execution. For raising such issues workmen/DHs shall have the liberty to take recourse to other separate legal remedies available under law.
4. The Execution court held that in the instant case notional salary of more than 250 DHs who were working with JD at different levels has to be fixed for calculations of their salary/salary dues/retiral dues in terms of award. Besides that, benefits of Working Journalist Act shall also form part of their notional salary for such specialized calculations, labour courts have special machinery and undoubtedly, they are more equipped than a general civil court. Therefore, it is deemed appropriate to send the execution to labour court through Ld. Labour Commissioner.
5. For quantification and payment of dues to all DHs except those who have already settled the matter, the Execution court transferred the file to the Ld. Principal District & Sessions Judge, PHC, New Delhi with a request to send the same to Ld. Labour Commissioner for its assignment to labour court of competent jurisdiction. The Management has filed the objections to the directions of calculations by the labour court. Notice issued by the District Court to counsel for the Workmen. However in view of the cross CM mains filed by both the parties challenging the Execution Court order dated 26.02.2022 before the Delhi High Court the matter is kept in abeyance. Now, the matter is pending for 03.07.2023 for further consideration, if any.
HTL has preferred to challenge the final order dated 26.02.2022 before Delhi High Court by way of CM(M) 335/2022 challenging the decision on grounds of entitlement and payment to the 38 workers for the period Jan 2014 to August 2018 or till their retirement on the criteria of âno work, no payâ which principle has already been accepted by the Execution court in relation to other set of workmen in the same order and the directions to allow the benefit of Wage Board amongst other grounds,
The CM(M) 335/2022 was listed before the concerned single judge of Delhi High Court on 8th April 2022 and the Court after hearing the arguments at length, asked HTL to submit compliance report pertaining to prior orders of this court and matter was listed for 24.05.2022. Accordingly, an affidavit in relation to the compliance of the order dated 27.08.2018 passed by Honâble High Court in W.P.(C) 5607/2016 has been filed . On 24.05.2022 the Honâble High Court directed HTL to pay the wages of three remaining workmen out of 38 workmen who were not paid the wages during 01.01.2014 till 31st August 2018. The HTL has complied with the directions of Honâble Delhi High Court and paid the wages to three workmen/ legal hires of the workmen.
The Decree Holders have also challenged the orders dated 26.02.2022 and 26.03.2022 passed by executing court, before Delhi High Court with various prayers. The Petition of HTL vide CMM no.355/2022 and the Petition of Decree Holder vide its no.CM(M) no.413/2022 have been clubbed together by the Delhi High Court. Matters were listed on 17.01.2023 and due to lack of time matters got adjourned and are now both the matters listed for final arguments on 16th May 2023 before Delhi High Court.
On the issue of back wages, the workmen also filed Writ Petition against the order of Ld. Execution Court dated October 08, 2012 denying them back wages. This issue of Back wages is finally decided by Honâble Supreme Court vide order dated August 1, 2016 holding that back wages are not payable. Another small group of workmen filed another SLP (C) No. 28705/2015 challenging the same order of Division Bench, Delhi High Court, virtually on same grounds, which is pending for hearing though there is a likely hood of same fate as of another SLP. The workmen thereafter filed a fresh Writ Petition before the single bench of Delhi High Court challenging the award dated January 23, 2012 to the extent of denial of back wages and concomitant benefits. The said Writ Petition was dismissed vide order dated October 3, 2016 on the ground of Res- judicata and on account of delay or latches. The judgment of the Single Bench of Delhi High Court was challenged by the workmen before Division Bench of Delhi High Court vide LPA No.691/2026, wherein notice was issued to the Company. The said matter is now listed on 22.05.2023 for final arguments before the Division Bench. Since the issue of Back wages has been decided by Honâble Supreme Court and the Single Judge of the Honâble Delhi High Court, the Company does not expect a material adverse outcome in the current round of litigation.
B. During the current year and as in the previous financial year, the Management has received few claims from employees who either retired, or were separated from the Company, regarding the benefits of Majhithia Wage Board recommendations. We have raised our objections on the maintainability of the Claim and the amount so claimed as due. The matters have been referred to respective Labour Courts for adjudication on the eligibility/ maintainability/ liability of such claims. Based on management assessment and current status of the above matter, the management is confident that no additional provision is required in the financial statements as on March 31, 2023.
Management has received several favourable orders dismissing claims of the various employees during the current year.
Refer note 36 A
iii) Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free (other than Inter corporate deposit given and taken) and settlement occurs in cash.
As at March 31, 2023, certain Land and Building has been re-classified from âââInvestment Propertyââ to âNon- current assets held for saleâ being held for sale. Disposal is expected within one year of classification as held for sale. These assets are being measured at the lower of its carrying amount and fair value less costs to sell. Impairment has not got trigerred.
âNon-current assets held for sale relating to investment propertyâ are being presented as part of âUnallocated segmentâ as part of Segment information in accordance with Ind AS 108 Operating Segments.
For the purpose of management review, the Company is organized into business units based on the nature of products and services and has three reportable segments, as follows:
- Printing and publication of newspapers & periodicals
- Radio broadcast & Entertainment and all other related activities through its Radio channels operating under brand name âFever 104â , âFeverâ and âRadio Nasha 107.2â in India.
- Digital - Business of providing internet related services through a job portal Shine.com.
Information about major customers:
No single customer represents 10% or more of the Companyâs total revenue during the year ended March 31, 2023 and March 31, 2022.
The Chief Operating Decision Maker (CODM) of the Company monitors the operating results of above-mentioned business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. Also, the Companyâs financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.
The geographical revenue is allocated based on the location of the customers. The Company primarily caters to the domestic market and hence it has been considered as to be operating in a single geographical location.
The financial information for these reportable segments has been provided in Consolidated Financial statements as per Ind-AS 108 - Operating Segments.
Note 39 : Hedging activities and derivatives
Derivatives not designated as hedging instruments
The Company uses foreign exchange forward contracts, call spread option, Seagull option, interest rate swaps (floating to fixed) to manage its foreign currency and interest rate risk exposures. These contracts are not designated as cash flow hedges other than Euro 300 Lakhs FCNR Loan and are entered into for periods consistent with underlying transactions exposure.
The Company has taken Euro 300 Lakhs FCNR loan with floating rate of interest (Hedge Item). The Company has taken Call Spread option to mitigate foreign currency risk in relation to repayment of principal amount of Euro 300 Lakhs and Interest Rate Swap (floating to fixed) to mitigate interest rate risk. The Company designates (Cash Flow Hedge):
⢠Intrinsic Value of Call Spread option (Hedge Instrument) to hedge foreign currency risk for repayment of principal amount in relation to FCNR Loan availed in Euro.
⢠Interest Rate Swap (floating to fixed) [Hedge Instrument] to hedge interest rate risk in respect of floating rate of interest in relation to FCNR Loan .
Both Hedge Item and Hedge Instruments as stated above have got settled by March 31, 2022.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item. The Company performs a qualitative assessment of effectiveness. As all critical terms matched during the year ended March 31, 2022, the economic relationship was effective.
Set out below, is a comparison by class of the carrying amounts and fair value of the companies financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
The management assessed that fair value of trade receivables, cash and cash equivalents, other bank balances, other current non- derivative financial assets, short- term borrowings, trade payables, lease liabililties and other current non- derivative financial liabilities approximate their carrying amounts that are reasonable approximations of fair value largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
- The fair values of Long term interest-bearing borrowings, NCDs and loans are determined by using Discounted Cash Flow(DCF) method using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non-performance risk was assessed to be insignificant.
- The fair values of the investment in unquoted equity shares/ debt instruments have been estimated using a Discounted Cash Flow (DCF) model and/or comparable investment price such as last round of funding made in the investee Company. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted investments.
- Investments in quoted mutual funds/bonds being valued at Net Asset Value.
- Investments in quoted Market Linked Debentures (MLD) being valued basis fair valuation available in market/ public domain.
- Investments in venture capital funds are valued using valuation techniques, which employs the use of market observables inputs and the assessment of Net Asset Value.
- Investments in quoted equity shares are valued at closing price of stock on recognized stock exchange.
- The Company enters into derivative financial instruments such as Interest rate swaps, Coupon only swap, Call Spread Options, foreign exchange forward contracts being valued using valuation techniques, which employs the use of market observable inputs. The Company uses Mark to Market valuation provided by Bank for valuation of these derivative contracts.
- The loans given/security deposits paid are evaluated by the Company based on parameters such as interest rate, risk factors, risk characteristics and individual credit-worthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected losses.
- Fixed bank deposits with more than 12 months maturity have been derived basis the interest accrued on fixed deposits upto the balance sheet date.
Note 41: Financial risk management objectives and policies
The Companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to support its operations. The Companyâs principal financial assets other than derivatives comprise investments, loans given, trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also enters into foreign exchange derivative transactions.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the mitigation of these risks. The Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in foreign exchange derivatives for speculative purposes will be undertaken. The policies for managing each of these risks, which are summarized below:-
(1) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2023 and March 31, 2022.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations and provisions.
The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
For year ended March 31, 2023-
The Companyâs long-term fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate on account of a change in market interest rates.
For year ended March 31, 2022-
The companies exposure to the risk of changes in market interest rates relates primarily to long-term FCNR Euro Borrowings with floating interest rates which got settled by March 31, 2022 (refer note 39).
The Company manages interest rate risk by taking interest rate swap (floating to fixed). Refer Note 39 for details.
The Sensitivity Analysis for impact on OCI in relation to interest rate swap-
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency), investments & borrowing in foreign currency, etc.
The Company manages its foreign currency risk by hedging foreign currency transactions with forward covers and option/swap contracts. These transactions generally relates to purchase of imported newsprint & borrowings in foreign currency.
When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the underlying exposure.
Foreign currency sensitivity-Unhedged Foreign Currency Exposure
The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.
(iii) Equity/Preference price risk
The Company invests in listed and non-listed equity/preference securities which are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity/ preference price risk through diversification and by placing limits on individual and total equity/preference instruments. Reports on the equity/preference portfolio are submitted to the Companyâs senior management on a regular basis. The Companyâs Investment Committee reviews and approves all equity/preference investment decisions.
(2) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables and other financial assets at amortised cost
An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10A and Note 6D. The Company does not hold collateral as security other than secured trade receivables (refer Note 10A)
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made as per guidelines and within limits approved by Board of Directors. Board of Directors/ Management reviews and update guidelines, time to time as per requirement. The guidelines are set to minimize the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.
Liquidity risk
The Company monitors its risk of a shortage of funds using a liquidity mechanism.
The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of Bank loans & liquid MF Investments. ~89% of the Companyâs financial liabilities will mature in less than one year at March 31, 2023 (March 31, 2022: ~75%) based on the carrying value of financial liabilities reflected in the financial statements.
The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding i.e. investments / Bank limits for Borrowing/ cash accrual from Operation and debt maturing within 12 months can be paid/ rolled over with existing lenders.
For further details refer note 51.
The Company has pledged part of its Investment in Mutual Funds in order to fulfill the collateral requirements for Borrowing. At March 31, 2023 & March 31, 2022, the invested values of the Investment in Mutual Funds pledged were INR 15,287 Lakhs Fair value [Original cost: INR 14,086 Lakhs] and INR 19,221 Lakhs Fair value [Original cost: INR 17,235 Lakhs] respectively. The counterparties have an obligation to return the securities to the Company and the Company has an obligation to repay the borrowing to the counterparties upon maturity/ Due Date. There are no other significant terms and conditions associated with the use of collateral. Securities except pledge given against outstanding Bank facilities details is provided in borrowing note.
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves . The primary objective of the Companyâs capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital and net debt. The Company includes within net debt, interest bearing loans and borrowings and interest accrued on borrowings.
In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. The Company has satisfied all financial debt covenants prescribed in the terms of bank loan for the year ended March 31, 2023 and March 31, 2022.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31, 2022.
Note 43: Standards issued but not yet effective
On March 31, 2023, the Ministry of Corporate Affairs (MCA) issued certain amendments and annual improvements to Ind AS. These amendments are applicable for accounting periods beginning on or after April 01, 2023.
Amendment to Ind AS 12 and Ind AS 101
Now the Initial Recognition Exemption (IRE) does not apply to transactions that give rise to equal and offsetting temporary differences. Narrowed the scope of IRE (with regard to leases and decommissioning obligations). Accordingly, companies will need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising on transactions such as initial recognition of a lease and a decommissioning provision.
The amendments apply to transactions that occur on or after the beginning of the earliest comparative period presented. The application of this amendment is not expected to have a material impact on the Companyâs financial statements. Amendment to Ind AS 1 and Ind AS 34 and Ind AS 107
Companies should now disclose material accounting policies rather than their significant accounting policies.
The application of this amendment is not expected to have a material impact on the Companyâs financial statements. Amendment to Ind AS 8
Definition of âchange in account estimateâ has been replaced by revised definition of âaccounting estimateâ. As per revised definition, accounting estimates are monetary amounts in the financial statements that are subject to measurement uncertainty.
The application of this amendment is not expected to have a material impact on the Companyâs financial statements. Following amendments are clarificatory in nature-Amendment to Ind AS 109
In Indian Accounting Standard (Ind AS) 109, in Appendix B, in paragraph B4.3.12, for item (b), the following item shall be substituted, namely:-
â(b) a combination of entities or businesses under common control as described in Appendix C of Ind AS 103; orâ;
The application of this amendment is not expected to have a material impact on the Companyâs financial statements.
In Indian Accounting Standard (Ind AS) 115, in Appendix 1,-
(i) in paragraph 2, for the words and figure âparagraph of 15â, the word and figure âparagraph 51â shall be substituted;
(ii) in paragraph 5, for the word and letter &
Mar 31, 2018
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 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, âFeverâ and âRadio Nashaâ. The digital business of the Company comprises of various online platforms such as âshine.comâ, âdesimartini.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 related party relationship of the Company is provided in Note No 36.
The financial statements of the Company for the year ended March 31, 2018 are authorised for issue in accordance with a resolution of the Board of Directors on May 2, 2018.
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 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 lacs as per the requirement of Schedule III, unless otherwise stated. Rounding of errors has been ignored.
2.2. Significant accounting judgements, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The areas involving critical estimates or Judgement are as below: Assessment of lease contracts
Significant judgement is required to apply lease accounting rules under Appendix C to INDAS 17: determining whether an Arrangement contains a Lease. In assessing the applicability to arrangements entered into by the Company, management has exercised judgement to evaluate the right to use the underlying assets, substance of the transaction including legally enforced arrangements and other significant terms and conditions of the arrangement to conclude whether the arrangements meet the criteria under Appendix C to INDAS 17.
Contingent Liability and commitments
The Company is involved in various litigations. The management of the Company has used its judgement while determining the litigations outcome of which are considered probable and in respect of which provision needs to be created.
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax assessments and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Companies.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in Note 33.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 39 for further disclosures.
Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
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 CGUâs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group 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 fair value less costs of disposal, recent markets 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 subsidiaries or other available fair value indicators.
Share Based Payment
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 34.
Volume discounts and pricing incentives
The company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the rateable allocation of the discounts/ incentives amount to each of the underlying revenue transaction that results in progress by the customer towards earning the discount/ incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the company recognizes the liability based on its estimate of the customerâs future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs.
Property, Plant and Equipment
The Company, based on technical assessment management estimate, 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 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.
iii. Refer Note 14A for charge created on property, plant & equipment as security against borrowings.
iv. Certain assets have been impaired based on difference of fair value less costs of disposal and value in use.
Additional information for which impairment loss has been recognized are as under:
1) Nature of asset :Plant and Machinery
2) Amount of Impairment : Rs.89 Lacs (Previous Year: Rs.379 Lacs)
3) Reason of Impairment : Change in Specification of Newspaper
4) Recoverable Amount : Nominal
As at March 31, 2018 and March 31, 2017, the fair value of the properties are Rs.47,225 lacs and Rs.36,056 lacs respectively. These valuations are based on valuations performed by accredited independent valuers who are specialist in valuing these types of investment properties. A valuation model in accordance with that recommended by the International Valuation Standards Committee has been applied.
The Company has no restrictions on the realisability of its investment properties except restriction for the Investment properties purchased from Amrapali Ultra Home Constructions Private Limited and Amrapali Silicon City Private Limited which originated during FY 2017-18. The fair values of investment property held by the Company in various projects of Amrapali Ultra Home Constructions Private Limited and Amrapali Silicon City Private Limited have not been considered since National Company Law Tribunal has appointed Insolvency Resolution Professionals for both these companies and the proceedings will be governed according to the Insolvency and Bankruptcy Code of India, 2016. Adjustments, if any, that may be required on completion of insolvency proceedings shall be made at the time of conclusion of such proceedings. The Company does not expect such amount to be material.
There are contractual obligations of Rs.3,796 lacs as on March 31, 2018 (Previous Year: Rs.724 lacs) to purchase investment properties whereas there are no contractual obligations to construct or develop investment properties or for repairs and enhancements.
Estimation of Fair Value
The valuation has been determined basis the market approach by reference to sales in the market of comparable properties. However, where such information is not available, current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences, has been considered to determine the valuation. All resulting fair value estimates for investment properties are included in Level II.
Note I The Board of Directors and Shareholders of Firefly e-Ventues Limited (Firefly), HT Digital Media Holdings Limited (HT Digital) and HT Mobile Solutions Limited (HT Mobile) approved a Composite Scheme of Capital Reduction and Arrangement under Sections 100 to 104 of the Companies Act 1956, along with Section 52 of the Companies Act 2013 and Sections 391-394 of Companies Act, 1956 (the Scheme), among Firefly, HT Digital and HT Mobile (the Companies) and their respective shareholders and creditors, subject to requisite approval(s) and sanction by the Honâble National Company Law Tribunal (NCLT). The Scheme, inter-alia, provides for reduction of share capital in Firefly and HT Digital followed by demerger of HT Campus Undertaking (Demerged Undertaking) of Firefly and transfer and vesting thereof into the HT Mobile w.e.f. from June 30, 2016 (the Appointed Date).
During the year ended March 31, 2018, NCLT sanctioned the Scheme vide its order dated October 17, 2017. Consequent upon filing of the order passed by NCLT with the Registrar of Companies, the Scheme became effective from October 27, 2017 (closing hours) (âEffective Dateâ).
Accordingly, during the year, the Company has written off the provision of Rs.4,237 Lacs for diminution in value of its investment held in a step down subsidiary Firefly e-Ventures Limited (FEVL). The provision consists of Rs.1,693 lacs in the value of Investments held directly by the Company in FEVL and Rs.2,544 lacs for investment held by the Company in FEVL through its wholly owned subsidiary HT Digital Media Holdings Limited (parent company of FEVL).
Note II The Board, in its meeting held on May 19, 2017, had approved proposal to acquire 49% equity stake in India Education Services Private Limited (IESPL) held by Apollo Global Singapore Holdings Pte. Ltd. (âApollo Globalâ), Joint Venture partner. The said transaction was concluded vide share purchase agreement dated July 18, 2017 at a consideration of USD 6,50,000. Accordingly, IESPL is now a subsidiary of the Company (holding 99% equity share capital of IESPL) and the Joint Venture Agreement has been terminated. It was classified as a joint venture in previous year.
# The name of Birla Sun Life has been changed to Aditya Birla Sun Life
* 61.65 Lac units of Axis Short Term Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18 & FY 16-17
** 74.57 Lac units of DSP BlackRock Banking and PSU Debt Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche
Bank for overdraft facility in FY 17-18
*** 66.64 Lac units of SBI Corporate Bond Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18 & FY 16-17
**** 62.65 Lac units of TATA Dynamic Bond Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18 & FY 16-17
**** 59.48 Lac units of TATA Dynamic Bond Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 16-17
***** 93.51 Lac units of Reliance Banking and PSU Debt Fund Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18 & FY 16-17
****** 79.13 Lac units of UTI Short Term Income Fund IP Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18 & FY 16-17
******* 99.45 Lac units of Kotak Bond Short Term Plan Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18
******** 1.44 Lac units of DSP BlackRock Strategic Bond Fund Institutional Plan Growth with a face value of â10/- unit are pledged in favour of Deutsche Bank for overdraft facility in FY 16-17
********* 51.74 Lacs units of Tata Short term Bond Fund Growth with a face value of Rs.10/- per unit are pledged in favour of Deutsche Bank for overdraft facility in FY 17-18
Derivative instruments at fair value through profit and loss reflect the positive change in fair value of those foreign exchange forward contracts and foreign currency options that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected sales and purchases.
Forex derivative contract
While the Company entered into foreign exchange forward contracts with the intention of reducing the foreign exchange risk of foreign currency bonds, borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss.
Call Spread Option to buy USD
The Company had entered into call spread option to buy USD to hedge principal repayment of Foreign Currency Non- Repatriable(FCNR) borrowing.
Interest Rate Swap
The Company had entered into interest rate swap to hedge against exposure to variable interest outflow on Foreign Currency Non- Repatriable (FCNR) Borrowing. Swap terms are to pay fixed interest @3.90% p.a. on notional USD amount and receive a variable interest @ one month LIBOR 1.9% on USD notional amount.
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.
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.
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.
(i) During the FY 2006-07, an amount of Rs.2,000 lacs have been transferred from Statement of Profit and Loss to Capital Redemption Reserve on account of 2,000,000 1% Non-cumulative Redeemable preference shares of Rs.100/- each, were redeemed on September 16, 2006.
(ii) The Board of Directors at their meeting held on May 14, 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.2,500 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.1,881 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 lacs, is adjusted against the Share Premium Account. Further an amount of Rs.45 lacs (equivalent to nominal value of shares bought back) has been transferred to Capital Redemption Reserve from General Reserves.
NOTE I- BUYERâS CREDIT FROM BANK OF TOKYO AND MITSUBISHI (UNSECURED)
Outstanding Buyerâs Credit loan from Bank of Tokyo and Mitsubishi (Unsecured) was drawn in various tranches from July 20, 2017 till March 27, 2018 @ average Interest Rate of 2.64% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from April 16, 2018 till December 21, 2018. The loan outstanding in previous year has been repaid during the current year.
NOTE II- BUYERâS CREDIT FROM DBS BANK (UNSECURED) Outstanding Buyerâs Credit loan from DBS Bank (Unsecured) was drawn in various tranches from July 7, 2017 till July 31, 2017 @ average
Interest Rate of 2.33% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from April 3, 2018 till April 25, 2018.
NOTE III- BUYERâS CREDIT FROM YES BANK (UNSECURED) Outstanding Buyerâs Credit loan from Yes Bank (Unsecured) was drawn in various tranches from August 1, 2017 till August 30, 2017 @ average Interest Rate of 2.31% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from April 26, 2018 till May 25, 2018.
NOTE IV - FOREIGN CURRENCY NON- REPATRIABLE (FCNR) LOAN FROM CITI BANK (SECURED)
FCNR Loan from Citi Bank carries interest @USD 1 month Libor 1.90% spread p.a. The loan is repayable in 8 semi annual equal instalments of USD 8,75,000 starting from January 31, 2016. The loan is secured by Pari Passu charge on companyâs all present & future movable fixed assets (Charge of Rs.42 Crs with MCA as on 31st Marâ18).
NOTE V - EXTERNAL COMMERCIAL BORROWING FROM CITI BANK (SECURED)
External commercial borrowing from Citi Bank carries interest @USD 3 months Libor 1.50% spread p.a. The loan was repayable in semi annual equal installments of USD 15,62,500 starting from December 31, 2013. The loan was secured by Pari Passu charge on companyâs present and 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 Citibankâs ECB and LC facilities of USD 32.5 Mn, to secure Citibankâs ECB, LC and hedging limits (Charge is released with MCA as repaid during the FY 17-18).
FOREX DERIVATIVE CONTRACT
While the Company entered into foreign exchange forward contracts with the intention of reducing the foreign exchange risk of foreign currency bonds, borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss.
CALL SPREAD OPTION TO BUY USD
The Company had entered into call spread option to buy USD to hedge principal repayment of External Commercial Borrowing and Foreign Currency Non- Repatriable(FCNR) borrowing.
COUPON ONLY SWAP
The Company had entered into coupon only swap to hedge against exposure to variable interest outflow on External Commercial Borrowing. Swap terms are to pay fixed interest @3.38% p.a. on notional â amount and receive a variable interest @ three months LIBOR 1.5% on USD notional amount.
INTEREST RATE SWAP
The Company had entered into interest rate swap to hedge against exposure to variable interest outflow on Foreign Currency Non-Repatriable (FCNR) Borrowing. Swap terms are to pay fixed interest @3.90% p.a. on notional USD amount and receive a variable interest @ one month LIBOR 1.9% on USD notional amount.
Provision for contingencies
The provision for contingencies represents the best estimate of the management for an obligation on the Company in relation to employee benefits/claims for the past services. Further, the provision for contingency created in prior periods arising out of business purchase agreement dated October 1, 2004 is no more required in view of various court decisions in the current year.
NOTE 3: INCOME TAX
The major components of income tax expense for the year ended March 31, 2018 and March 31, 2017 are :
The Company offsets tax assets and liabilities 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 tax authority. MAT Credit entitlement has been adjusted against the deferred tax liabilities as on the reporting date.
During the year ended March 31, 2018 and March 31, 2017, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax to the taxation authorities. The company believes that Dividend Distribution Tax represents additional payment to taxation authority on behalf of the shareholders. Hence , Dividend Distribution Tax paid is charged to equity.
The Company has obtained licenses under the Export Promotion Capital Goods(âEPCGâ) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the respective scheme, the Company is required to export goods or/and services in respect of these licenses. The management is confident of fulfilling the said commitment within the stipulated time or extended time as allowed.
# During the FY 2015-16, the Company has created provision for impairment for investment held in HTDMH and FEVL amounting to Rs.4,096 lacs. The said provision was debited to Profit and Loss account. The Company, while filing its return of income for FY 2015-16 has suo moto added back the provision for impairment from the Book Profits while computing its tax liability under MAT provisions under Section 115JB of the Act.
During the current year, pursuant to approval of NCLT, the investment held by the Company in FEVL and HTDMH has been actually written off by Rs.4,096 lacs and the Company has recorded realised loss in its books of accounts of FY 2017-18. Accordingly, the loss having been realized in current year, has been reduced from the Book Profit while computing income under MAT provisions under Section 115JB of the Act.
* Exceptional item represents Impairment in value of Investment in Subsidiaries as detailed below:
a) Impairment of Investment in HT Digital Media Holdings Limited amounting to Rs.684 Lacs.
b) Impairment of Investment in HT Mobile Solutions Limited amounting to Rs.123 Lacs.
c) Impairment of Investment in Topmovies Entertainment Limited amounting to Rs.605 Lacs.
d) Reversal of impairment of Investment in Firefly e-Ventures Limited amounting to Rs.7 Lacs
NOTE 4:
a) The Board of Directors of the Company at its meeting held on August 25, 2017, has approved a Scheme of Arrangement u/s 230-232 read with Section 66 of the Companies Act, 2013, between the Company and Digicontent Limited(formerly, HT Digital Ventures Limited), a wholly owned subsidiary company (Resulting Company) and their respective shareholders and creditors (âSchemeâ) for demerger of Entertainment & Digital Innovation Business of the Company, and transfer and vesting thereof to and in the Resulting Company, as a âgoing concernâ. In consideration of the proposed demerger, the Scheme also provides for issue of fully paid-up equity shares by the Resulting Company, to the shareholders of the Company.
In terms of the order passed by the Honâble National Company Law Tribunal (NCLT) meetings of secured creditors, unsecured creditors and shareholders of the Company have been convened for approval of the Scheme. The Scheme is subject to sanction by the NCLT and such other statutory authorities, as may be required. Pending the above approval(s), impact of the Scheme is not considered in these financial statements.
b) A Scheme for capital reduction of India Education Services Private Limited (99% subsidiary of the Company w.e.f. July 18, 2017) was filed with NCLT in October 2017 with September 30, 2017 as the Appointed date. Pending the approval of the Honâble National Company Law Tribunal, impact of the Scheme is not considered in these financial statements.
c) During the current year, the Company entered into a business purchase agreement with Topmovies
Entertainment Limited, to acquire its âDesimartiniâ business on slump sale basis as a going concern along with related assets, liabilities and rights therein, at a lump-sum consideration of Rs.503 Lacs, in cash, determined as per the valuation report obtained from an independent valuer. The said business purchase agreement was executed with effective date December 1, 2017.
NOTE 5 : EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made based on actuarial valuation done by independent valuer.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. The Company has purchased insurance policy, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset.
The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet :
NOTE 6 : SHARE-BASED PAYMENTS
In accordance with the Securities and Exchange Board of India (Share Based Employee benefits) Regulations, 2014 and Ind-AS 102 Share-based Payment, the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the scheme, relevant disclosures are given below.
I. As approved by the shareholders at their Extra-ordinary General Meeting held on October 21, 2005, during an earlier year, the Company has given interest-free loan of J 2,174 lacs to HT Media Employee Welfare Trust which in turn purchased 468,044 Equity Shares of J 10/- each of HT Media Limited (as on date equivalent to 2,340,220 Equity Shares of J 2/- each) from the open market [average cost per share - J 92.91 based on Equity Share of J 2/- each], for the purpose of granting Options under the âHTML Employee Stock Option Schemeâ (the Scheme), to eligible employees.
During the financial year 2007-08, the Scheme was modified to the effect - (a) Options granted w.e.f. September 15, 2007 shall vest as per previous revised schedule of vesting period; and (b) to extend the coverage of the Scheme to the eligible full-time employees of the subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of vesting period which are hereinafter referred to as âPlan A, âPlan Bâ (applicable to Options granted w.e.f. September 15, 2007) and Plan C (applicable to Options granted w.e.f. October 8, 2009). Options granted under both the plans are exercisable for a period of 10 years after the scheduled vesting date of the last
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is Rs. NIL (March 31, 2017: Rs. NIL)
II. The subsidiary company, Firefly e-Ventures Private Limited has given Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of Firefly e-Ventures Limited at a fixed price within a specific period of time.
Weighted average fair value of the options outstanding of Plan B in previous year was Rs.4.82 per option.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value.
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is Rs. NIL (Previous Year: Rs. NIL)
III. HT Media Limited has given loan of Rs.243 lacs to âHT Group Companies - Employee Stock Option Trustâ which in turn has purchased 37,338 Equity Shares of Rs.10/- each of Hindustan Media Venture Limited (HMVL) - Subsidiary Company of HT media Limited, for the purpose of granting Options under the âHT Group Companies -Employee Stock Option Schemeâ (the Scheme), to eligible employees of the group. On these purchased shares, the trust has also received 238,964 shares out of the bonus shares issued by HMVL on February 21, 2010.
Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of HMVL at a fixed price within a specific period of time.
Options granted are exercisable for a period of 10 years after the scheduled vesting date of last tranche as per the Scheme. Weighted average fair value of the options outstanding is Rs.56.38 (Previous year Rs.48.44) per option.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value .
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is Rs. NIL (Previous Year: Rs. NIL)
IV. The subsidiary company, HT Mobile Solution Limited has given Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
Details of these plans are given below:
Employee Stock Options
A. Stock option gives an employee, the right to purchase equity shares of HT Mobile Solution Limited at a fixed price within a specific period of time.
B. Details of stock options granted during the current year and earlier year are as given below:
NOTE 7: COMMITMENTS AND CONTINGENCIES
(a) Leases
Operating lease commitments - Company as lessee
The Company has taken various residential, office and godown premises under operating lease agreements. These are generally cancellable leases and are renewable by mutual consent on mutually agreed terms with or without rental escalations.
The Company has paid Rs.5,352 lacs (Previous Year: Rs.5,120 lacs) during the year towards minimum lease payment and the same is disclosed as Rent under Note 27
Future minimum rentals payable under non-cancellable operating leases are as follows:
Operating lease commitments - Company as lessor
The Company has entered into operating leases on its investment property. These are generally cancellable leases and are renewable by mutual consent on mutually agreed terms with or without rental escalations.
Finance Lease- Company as lessor
The Company has entered into a finance lease arrangement with its Holding Company. Future minimum lease receivables under finance lease together with the present value of the minimum lease receivables are as follows:
B. Other Commitments Commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital Goods(âEPCGâ) Scheme for importing capital goods at a concessional rate of customs duty against submission of bonds in September, 2008.
Under the terms of the respective scheme, the Company is required to export goods or/and services of FOB value equivalent to eight times the duty saved in respect of licenses within eight years from the date of issuance of license.
Accordingly, the Company is required to export goods and services of FOB value of Rs.20,017 lacs by September 18, 2018 (after extended time). The balance export obligation left as on March 31, 2018 is Rs.1,535 lacs (Previous Year: Rs.2,171 lacs). The management is confident of fulfilling the said commitment within the stipulated time or extended time as allowed.
Letter of Support
The Company has given letters of support to its subsidiaries, Firefly e-Ventures Limited, HT Mobile Solutions Limited and HT Music and Entertainment Company Limited to enable the said companies to continue their operations.
(c) Contingent Liabilities
Claims against the company not acknowledged as debts Legal claim contingency
(i) Income- tax authorities have raised additional demands for Rs.53 lacs (Previous Year: Rs.406 lacs) for various financial years. The tax demands are mainly on account of disallowances of expenses claimed by the company under the Income Tax Act. The matters are pending before various authorities. The Company is contesting the demands and the management believes that its position will likely to be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
(ii) Service tax authorities have raised additional demands for Rs.61 lacs (Previous Year: Rs.317 lacs) for various financial years. The matters are pending before Service Tax Appellate Tribunal. The Company is contesting the demands and the management believes that its position will likely to be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
(iii) During the year ended March 31, 2005, the Company acquired the printing undertaking at New Delhi from The Hindustan Times Limited (HTL). Ex-workmen of HTL challenged the transfer of business by way of a writ in Honâble Delhi High Court, which was quashed on May 9, 2006. Thereafter these workmen raised the industrial dispute before Industrial Tribunal-I, New Delhi (Tribunal).
The case was decided by an award by Industrial Tribunal, on January 23, 2012, wherein the workmen were granted ârelief of treating them in continuity of services under terms and conditions of service as before their alleged termination w.e.f. October 3, 2004. As per the award, they will not be entitled to any notice pay or compensation u/s 25 FF of Industrial Dispute Act. The said notice pay or compensation, if any, received by them, will have to be refunded to the Company.â
The said award after publication came into operation w.e.f. April 1, 2012. The HTL issued several letter(s) to the workmen, followed by the public notice asking them to refund the notice pay and retrenchment compensation so received, as directed by Industrial Tribunal, However, there was no response from the workman.
The workman also filed the Execution Proceeding for Back wages on April 2, 2012, Execution Court vide its order dated October 8, 2012, held that âNo Back Wagesâ have been granted and decree in relation thereto cannot be executedâ. The Execution Court vide its order dated January 04, 2013 directed the management to reinstate the workman without insisting for refund of notice pay and retrenchment compensation. The said order of the Ld. Execution Court was challenged before High Court of Delhi as HTL has no factory, it offered notional reinstatement & Salary w.e.f. April 18, 2013. HTL informed the High Court during the pendency of the petition that since HTL is currently engaged in non industrial activities, it can offer non-industrial work to a maximum of 38 (thirty eight) workmen based on seniority. It was also submitted that HTL will accordingly exercise its rights and remedies as available under the Industrial Disputes Act, 1947 qua the remaining workmen. Accordingly, HTL issued letter of posting to 38 workmen on December 4, 2013 and paid compensation under Section 25FFF of the Industrial Dispute Act, 1947 to remaining 167 workmen. Single Bench of Delhi High Court on September 14, 2015 delivered the judgment wherein Court relied on the Judgment of Division Bench and held that the parties will be at liberty to pursue the logical corollary. The proceedings before the Execution Court re-started after judgment of Single Bench of Delhi High Court. The Execution Court ordered HTL to reinstate the workmen as earlier reinstatement was not in accordance with Award dated January 23, 2012 and also directed to make payment of wages accordingly. HTL challenged the said order of Execution Court before single bench of Honâble High Court. In the mean time the workmen filed an application for relief of interim wages under Section 17B of the Industrial Disputes Act, 1947 in the pending writ petition of HTL. The Ld. Single Judge allowed the said application vide order dated March 1, 2017 and directed HTL to pay last drawn monthly wages w.e.f. March 1, 2017. The said order was challenged by the management in LPA 176 /2017 before Division Bench wherein the Division Bench has stayed the impugned order to the extent of the direction for payment of monthly wages. The Honâble Division Bench has disposed of the LPA 176/2017 on 20.04.2017 and granted HTL. an opportunity to file reply to the application under Section 17B before single bench of Honâble High Court. The reply to the afore mentioned application has been filed. The matter is being argued by the parties and it is listed on 04.05.2018 for remaining final arguments.
After the Petition of management challenging the order of Execution Court dated January 4, 2013, the workmen also filed Writ Petition against the order of Ld. Execution Court dated October 08, 2012 denying them back wages. The Single Bench of Delhi High Court pronounced the judgment on November 17, 2014 in favour ofthe workmen that Back wage are payable to them. HTL challenged the said order before Division Bench, which vide order dated February 23, 2015, held that no back wages are granted to the workmen vide award dated January 23, 2012. The SLP filed by the workmen against the judgment of Division Bench, was dismissed by Honâble Supreme Court vide order dated August 1, 2016. . Some other workmen filed another SLP (C) No. 28705/2015 challenging the same order of Division Bench, Delhi High Court, virtually on same grounds, which is pending for hearing though there is a likely hood of same fate as of another SLP. The workmen thereafter filed a fresh Writ Petition before the single bench of Delhi High Court challenging the award dated January 23, 2012 to the extent of denial of back wages. The said Writ Petition was dismissed vide order dated October 3, 2016 on the ground of res- judicata and on account of delay or latches. The judgment of the Single Bench of Delhi High Court is challenged by the workmen before Division Bench of High Court, wherein notice is issued to the Company. The said matter is now listed on 03.07.2018 for final arguments before the Division Bench.
The Delhi High Court has already ruled in favour of the Company in the original challenge to the Industrial Tribunal Award by the Company. Against that order of High Court, the workers have started a fresh round of litigation. At this stage, basis the facts and earlier order of Delhi High Court, the Company does not expect a material adverse outcome in the current round of litigation.
ii) Transactions with related parties
Refer Note 36 A
iii) Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
NOTE 8 : SEGMENT INFORMATION
For the purpose of management review, the Company is organized into business units based on the nature of products and services and has three reportable segments, as follows:
- Printing and Publication of Newspapers & Periodicals
- Radio Broadcast and all other related activities through its Radio channels operating under brand name âFever 104â, âFeverâ and âRadio Nasha 107.2â in India.
- Digital - Business of providing internet related services through a job portal Shine.com and movies review website desimartini.com.
The management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on its profit and loss and is measured consistently with profit or loss of the Company. Also, the Companyâs financing (including finance costs and finance income) and income taxes are managed on a company basis and are not allocated to operating segments.
The financial information for these reportable segments has been provided in Consolidated Financial Results as per Ind-AS 108 - Operating Segments.
NOTE 9 : HEDGING ACTIVITIES AND DERIVATIVES
Derivatives not designated as hedging instruments
The company uses foreign exchange forward contracts, options, interest rate swap, coupon only swap etc. to manage its foreign currency and interest risk exposures. These contracts are not designated as cash flow hedges and are entered into for periods consistent with underlying transactions exposure.
NOTE 10 : FAIR VALUES
Set out below, is a comparison by class of the carrying amounts and fair value of the companies financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
The management assessed that cash and cash equivalents, other bank balances, trade receivables, other current financial assets, trade payables, current borrowings and other current financial liabilities approximate their carrying amounts that are reasonable approximations of fair vale largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
- The fair values of long term interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non-performance risk was assessed to be insignificant.
- The fair values of the investment in unquoted equity shares/ debt instruments/ preference shares have been estimated using a Discounted Cash Flow (DCF) model and/or comparable investment price such as last round of funding made in the investee company. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted investments.
-The fair values of the investment in unquoted equity shares of India Education Services Private Limited valued in March 31, 2017 at Fair Value through OCI had been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows and discount rate. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted investments.
- Investments in quoted mutual funds being valued at Net Asset Value.
- Investments in venture capital funds are valued using valuation techniques, which employs the use of market observables inputs and the assessment of Net Asset Value.
- Investments in quoted equity shares are valued at closing price of stock on recognized stock exchange.
- The Company enters into derivative financial instruments such as interest rate swaps, coupon only swap, call spread options, foreign exchange forward contracts being valued using valuation techniques, which employs the use of market observable inputs. The company uses mark to market valuation provided by bank for valuation of these derivative contracts.
- The loans and investment in bonds are evaluated by the Company based on parameters such as interest rate, risk factors, risk characteristics and individual credit-worthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected losses.
The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2018 and March 31, 2017 are as shown below:
Note I - The Board, in its meeting held on May 19, 2017, had approved proposal to acquire 49% equity stake in India Education Services Private Limited (IESPL) held by Apollo Global Singapore Holdings Pte. Limited (âApollo Globalâ), Joint Venture partner. The said transaction was concluded vide share purchase agreement dated July 18, 2017 at a consideration of USD 6,50,000. Accordingly, IESPL is now a subsidiary of the Company (holding 99% equity share capital of IESPL) and the Joint Venture Agreement has been terminated. It is classified as a joint venture in previous year.
Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.
Note 11 : Financial risk management objectives and policies
The Companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to support its operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The company also enters into foreign exchange derivative transactions.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the mitigation of these risks. The Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in foreign exchange derivatives for speculative purposes will be undertaken. The policies for managing each of these risks, which are summarized below:-
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017.
The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2018 and March 31, 2017.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations and provisions.
The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs current debt obligations with fixed interest rates.
The Company manages its interest rate risk for short term borrowings by raising funds at a fixed rate and for Long term borrowing by selectively using interest rate swaps, coupon only swap and other derivative instruments to manage its exposure to interest rate movements. These exposures are reviewed by appropriate levels of management as and when required.
* Interest rate sensitivity for floating borrowing
The table below illustrates the impact of a 0.5% to 1.50% movement in interest rates on interest expense on loans and borrowings. The risk estimate provided assumes that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency), investment & borrowing in foreign currency etc.
The company manages its foreign currency risk by hedging foreign currency transactions with forward covers and option contracts. These transactions generally relates to purchase of imported newsprint, investments & borrowings in foreign currency.
When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the underlying exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the companyâs profit before tax is due to change in the fair value of monetary assets and liabilities.
Equity price risk
The Company invests in listed and non-listed equity securities which are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companyâs Investment Committee reviews and approves all equity investment decisions.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10A. The Company does not hold collateral as security.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the companyâs policy. Investments of surplus funds are made as per guidelines and within limits approved by Board of Directors. Board of Directors/ Management reviews and update guidelines, time to time as per requirement. The guidelines are set to minimize the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.
Liquidity risk
The Company monitors its risk of shortage of funds.
The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of Bank overdrafts, Bank loans & Money Market Borrowing. Approximately 99% of the Companyâs debt will mature in less than one year at March 31, 2018 (Previous Year: 98%) based on the carrying value of borrowings reflected in the financial statements.
The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding i.e. investments / Bank limits for Borrowing/ cash accrual from Operation and debt maturing within 12 months can be paid/ rolled over with existing lenders.
At 31 March 2018, the Company had available Rs.95,528 Lacs (Previous Year: Rs.1,03,692 Lacs) of undrawn committed borrowing facilities.
Collateral
The Company has pledged part of its investment in mutual funds in order to fulfil the collateral requirements for borrowing. At March 31, 2018 & March 31, 2017, the invested values of the investment in mutual funds pledged were Rs.12,076 lacs & 18,949 lacs, respectively. The counterparties have an obligation to return the securities to the company and the company has an obligation to repay the borrowing to the counterparties upon maturity/ due date. There are no other significant terms and conditions associated with the use of collateral. Securities except pledge given against outstanding bank facilities details is provided in borrowing note.
NOTE 12: CAPITAL MANAGEMENT
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves . The primary objective of the Companyâs capital management is to maximize the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio ,which is net debt divided by total capital and net debt. The company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.
The Company has satisfied all financial debt covenants prescribed in the terms of bank loan except Total Debt to EBIDTA ratio for FCNR loan taken from Citibank. Required waiver approval dated March 28, 2018 has been obtained from Citibank to condone the non-compliance and non-adherence of the Total Debt to EBITDA Ratio for financial condition test till September 30, 2018 for FCNR loan.
NOTE 13: STANDARDS ISSUED BUT NOT YET EFFECTIVE
Ind-AS 115 Revenue from Contracts with Customers
Ind-AS 115 was issued on March 28, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Ind-AS 115 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind-AS. This Standard is effective for accounting periods beginning on or after April 1, 2018.
Either a so called full retrospective application or a modified retrospective application is required for annual periods beginning on or after April 1,2018.
During 2017-18, the Company performed a preliminary assessment of Ind-AS 115. The initial application of Ind-AS 115 is not expected to have material impact on the Companyâs financial statements.
Amendments to Ind-AS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restrict the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference related to unrealized l
Mar 31, 2017
1. Significant accounting judgments, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods
The areas involving critical estimates or judgment are as below: Assessment of lease contracts
Significant judgment is required to apply lease accounting rules under Appendix C to Ind-AS 17: determining whether an Arrangement contains a Lease. In assessing the applicability to arrangements entered into by the Company, management has exercised judgment to evaluate the right to use the underlying assets, substance of the transaction including legally enforced arrangements and other significant terms and conditions of the arrangement to conclude whether the arrangements meet the criteria under Appendix C to Ind-AS 17.
Contingent Liability and commitments
The Company is involved in various litigations. The management of the Company has used its judgment while determining the litigations outcome of which are considered probable and in respect of which provision needs to be created.
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax assessments and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Companies.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in Note 33.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 39 for further disclosures.
Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
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 CGUâs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group 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 pretax 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 markets 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 subsidiaries or other available fair value indicators.
Share Based Payment
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 34.
Volume discounts and pricing incentives
The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the ratable allocation of the discounts/ incentives amount to each of the underlying revenue transaction that results in progress by the customer towards earning the discount/ incentive. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognizes the liability based on its estimate of the customerâs future purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs.
Property, Plant and Equipment
The Company, based on technical assessment and management estimate, depreciates certain assets and 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 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.
iii. Refer Note 14A for charge created on property, plant & equipment as security against borrowings.
iv. Certain assets have been impaired based on difference of fair value less costs of disposal and value in use.
Additional information for which impairment loss has been recognized are as under:
1) Nature of asset: Plant and Machinery
2) Amount of Impairment: '' 378.87 lacs
3) Reason of Impairment: Change in Specification of Newspaper
4) Recoverable Amount: Nominal (Assumed)
v. Plant & Machinery having a gross value of Rs, 86.61 lacs (March 31, 2016: Rs, 86.61 lacs and April 1, 2015: 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).
As at March 31, 2017, March 31, 2016 and April 1, 2015 the fair values of the properties are Rs, 36,056.00 lacs, Rs, 33,446.00 lacs and Rs, 29,671.72 lacs respectively. These valuations are based on valuations performed by an accredited independent valuer who are specialist in valuing these types of investment properties. A valuation model in accordance with Ind-AS 113 has been applied
As at March 31, 2017, March 31, 2016 and April 1, 2015 the Company has no restrictions on the realisability of its investment properties and there exists contractual obligations of Rs, 724.00 Lacs (March 31, 2016: Rs, 593.97 Lacs and April 1, 2015: Rs, 496.57 Lacs ) to purchase the investment property whereas there are no contractual obligation to develop investment property or for repairs and enhancements.
Estimation of Fair Value
The valuation has been determined basis the market approach by reference to sales in the market of comparable properties. However, where such information is not available, current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences, has been considered to determine the valuation. All resulting fair value estimates for investment properties are included in Level II.
(i) During the FY 2006-07, an amount of Rs, 2,000.00 lacs have been transferred from Statement of Profit and Loss to Capital Redemption Reserve on account of 20,00,000 1% Non-cumulative Redeemable preference shares of'' 100/each, were redeemed on September 16, 2006.
(ii) The Board of Directors at their meeting held on May 14, 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, 2,500.00 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 Reserve.
NOTE 1- BUYER''S CREDIT FROM BANK OF TOKYO AND MITSUBISHI (UNSECURED)
Outstanding Buyerâs Credit loan from Bank of Tokyo and Mitsubishi (Unsecured) was drawn in various tranches from September 8, 2016 till March 17, 2017 @ average Interest Rate of 2.17% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from June 5, 2017 till December 11, 2017.
NOTE 2- BUYER''S CREDIT FROM DBS BANK (UNSECURED)
Outstanding Buyerâs Credit loan from DBS Bank (Unsecured) was drawn in various tranches from November 23, 2016 till January 24, 2017 @ average Interest Rate of 2.37% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from August 18, 2017 till October 17, 2017.
NOTE 3- BUYER''S CREDIT FROM BNP PARIBAS BANK (SECURED)
Outstanding Buyerâs Credit loan from BNP Bank (Secured) was drawn in various tranches from May 28, 2014 till August 13, 2014 @ average Interest Rate of 1.43% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from April 17, 2015 till June 17, 2015. The facility is secured by Pari passu charge on stocks and book debts of the company
NOTE 4- BUYER''S CREDIT FROM ROYAL BANK OF SCOTLAND (SECURED)
Outstanding Buyerâs Credit loan from Royal Bank of Scotland (Secured) was drawn on August 18, 2014 @ average Interest Rate of 1.60% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment on July 9, 2015. The facility was secured by First pari-passu charge over the stock and book debts of the company
NOTE 5- BUYER''S CREDIT FROM KOTAK MAHINDRA BANK (SECURED)
Outstanding Buyerâs Credit loan from Kotak Mahindra Bank (Secured) was drawn in various tranches from August 14, 2014 till December 19, 2014 @ average Interest Rate of 1.23% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from June 19, 2015 till September 23, 2015. The facility is secured by First Pari passu charge on all existing and future current assets of the company.
NOTE 6- BUYER''S CREDIT FROM CITI BANK (UNSECURED)
Outstanding Buyerâs Credit loan from Citi Bank (Unsecured) was drawn in various tranches from August 31, 2015 till Novemebr 30, 2015 @ average Interest Rate of 1.31% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from May 20, 2016 till August 26, 2016.
NOTE 7- BUYER''S CREDIT FROM YES BANK (UNSECURED)
Outstanding Buyerâs Credit loan from Yes Bank (Unsecured) was drawn in various tranches from August 4, 2015 till August 31, 2015 @ average Interest Rate of 1.39% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from May 16, 2016 till June 24, 2016.
NOTE 8- BUYER''S CREDIT FROM DEUTSCHE BANK (UNSECURED)
Outstanding Buyerâs Credit loan from Deutsche Bank (Unsecured) was drawn in various tranches from September 3, 2015 till March 29, 2016 @ average Interest Rate of 1.85% p.a. (Applicable LIBOR Margin from time to time) and are due for repayment respective due dates starting from May 20, 2016 till December 23, 2016.
NOTE 9- VENDOR FINANCING FROM CITI BANK (UNSECURED)
Outstanding Vendor Financing loan from Citi Bank (Unsecured) was drawn in various tranches from January 20, 2015 till March 31, 2015 @ average Interest Rate of 9.63% p.a. and are due for repayment respective due dates starting from April 4, 2015 till June 26, 2015.
NOTE 10- VENDOR FINANCING FROM DEUTSCHE BANK (UNSECURED)
Outstanding Vendor Financing loan from Deutsche Bank (Unsecured) was drawn in various tranches from October 31, 2014 till March 30, 2015 @ average Interest Rate of 9.78% p.a. and are due for repayment respective due dates starting from April 10, 2015 till August 8, 2015.
NOTE 11 - FOREIGN CURRENCY NON- REPATRIABLE (FCNR) LOAN FROM CITI BANK (SECURED)
FCNR Loan from Citi Bank carries interest @USD 1 month Libor 1.90% spread p.a. The loan is repayable in 8 semiannual equal instalments of USD 8,75,000 starting from January 31, 2016. The loan is secured by Pari Passu charge on companyâs all present & future movable fixed assets.
NOTE 12 - EXTERNAL COMMERCIAL BORROWING FROM CITI BANK (SECURED)
External commercial borrowing from Citi Bank carries interest @USD 3 months Libor 1.50% spread p.a. The loan is repayable in semiannual equal installments of USD 15,62,500 starting from December 31, 2013. The loan is secured by Pari Passu charge on companyâs present and 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.
FOREX DERIVATIVE CONTRACT
Terms and conditions of the above financial liabilities:
- Trade payables are non-interest bearing and are normally settled in the range of1to180 days terms. For explanations in the Companyâs credit risk management process, refer Note 40.
While the Company entered into foreign exchange forward contracts with the intention of reducing the foreign exchange risk of foreign currency bonds, borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit and loss.
CALL SPREAD OPTION TO BUY USD
The Company had entered into call spread option to buy USD to hedge principal repayment of External Commercial Borrowing and Foreign Currency Non- Reparable (FCNR) borrowing.
COUPON ONLY SWAP
The Company had entered into coupon only swap to hedge against exposure to variable interest outflow on External Commercial Borrowing. Swap terms are to pay fixed interest @3.38% p.a. on notional '' amount and receive a variable interest @ three months LIBOR 1.5% on USD notional amount.
INTEREST RATE SWAP
The Company had entered into interest rate swap to hedge against exposure to variable interest outflow on Foreign Currency Non- Repatriable (FCNR) Borrowing. Swap terms are to pay fixed interest @3.90% p.a. on notional USD amount and receive a variable interest @ one month LIBOR 1.9% on USD notional amount.
Provision for contingencies
The provision for contingencies represents the best estimate of the management for an obligation on the Company in relation to a claim pursuant to the business purchase agreement dated October 1,2004 for purchase of the printing business from its holding company. Information usually required by Ind-AS 37- Provisions, Contingent Liabilities and Contingent Assets is not disclosed on the grounds that it can be expected to prejudice the interests of the Company.
The company offsets tax assets and liabilities 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 tax authority.
During the year ended March 31, 2017 and March 31, 2016, the company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax to the taxation authorities. The company believes that Dividend Distribution Tax represents additional payment to taxation authority on behalf of the shareholders. Hence Dividend Distribution Tax paid is charged to equity.
* Pursuant to the sanction of the Scheme of Arrangement u/s 391-394 of the Companies Act, 1956 between the Company and HT Digital Streams Limited (HTDSL) and their respective shareholders & creditors for transfer and vesting of Multi-media Content Management Undertaking of the Company (âMMCM Undertakingâ) to and in HTDSL, the Company has entered into a content sharing agreement for licensing of literary content from HTDS as per mutually agreed terms. During the year ended March 31,2017 , the Company has incurred an amount of Rs, 12,335.81 Lacs ( Previous Year - Nil) on account of such expense. (Also Refer Note 29)
** Includes Provision towards Impairment of Property, Plant and Equipment ofRs, 378.87 Lacs ( Previous Year - Nil)
Note:-
i) During the previous year, Company has sold the Hindi Business Brand [i.e. Hindustan, Hindustan.in, Nandan, Kadambini, Hum Turn and certain other Hindi publication related trademarks (the âHindi Business Trademarksâ)] to its subsidiary company, Hindustan Media Ventures Limited.
ii) The Company made provision of Rs, 4,096.00 Lacs for diminution in value of its investment held in a step down subsidiary Firefly e-Ventures Limited (FEVL). The provision consists of Rs, 1,699.84 lacs in the value of Investments held directly by the Company in FEVL and Rs, 2,396.16 lacs for investment held by the Company in FEVL through its wholly owned subsidiary HT Digital Media Holdings Limited (parent company of FEVL). The provision is triggered due to substantial decline in net worth of FEVL and pursuant to the approval of the Board of Directors and Shareholders of Firefly, HT Digital and HT Mobile for a Composite Scheme of Capital Reduction and Arrangement (the Scheme) under Sections 100 to 104 of the Companies Act 1956, along with Section 52 of the Companies Act 2013 and Sections 391-394 of Companies Act, 1956, among Firefly, HT Digital and HT Mobile (The Companies) and their respective shareholders and creditors, subject to requisite approval(s) and sanction by the HonRs,ble Delhi High Court. The Scheme, inter-alia, provides for reduction of share capital in Firefly and HT Digital followed by demerger of HT Campus Undertaking (Demerged Undertaking) of Firefly and transfer and vesting thereof into the HT Mobile w.e.f. from June 30, 2016 (the Appointed Date).
13. TRANSFER OF MULTI-MEDIA CONTENT MANAGEMENT UNDERTAKING OF THE COMPANY (âMMCM UNDERTAKING'') TO HT DIGITAL STREAMS LIMITED
The Board of Directors of the Company at its meetings held on November 19, 2015, on the recommendation of the Audit Committee, had approved the transfer and vesting of the Multi-media Content Management Undertaking of the Company (âMMCM Undertakingâ) to and in HT Digital Streams Limited (Transferee Company), a wholly-owned subsidiary, as a âgoing concernâ on a slump exchange basis by way of issue of fully paid-up equity shares of the Transferee Company to the Company.
The Scheme of Arrangement u/s 391-394 of the Companies Act, 1956 between the Company and HT Digital Streams Limited (HTDSL) and their respective shareholders & creditors for transfer and vesting of Multi-media Content Management Undertaking of the Company (âMMCM Undertakingâ) to and in HTDSL, as going concern on slump exchange basis, with effect from closing hours of March 31, 2016 (âAppointed Dateâ) (âthe Schemeâ), was sanctioned by the Honâble Delhi High Court in terms of orders dated August 29, 2016 and November 15, 2016, and the Honâble High Court of Judicature at Patna, in terms of the judgment dated November 24, 2016 and order dated December 19, 2016 and with Registrar of Companies, Bihar on December 31, 2016.
The Scheme became effective from December 31,2016 (closing hours) (âEffective Dateâ), consequent upon Ailing of the judgments / orders passed by the Honâble High Courts with respective Registrar of Companies. Financial impact of the Scheme was considered in unaudited Financial Results for the quarter and nine months ended December 31, 2016; as summarized below:
a) HTDSL allotted its 1,14,12,104 Equity Shares of '' 10/- each to the company, the Company now holds 57.17% of equity share capital of HTDSL
b) An amount of Rs, 10,367.20 Lacs, being difference of purchase consideration (Rs, 9,900 Lacs) and Book Value of Net Assets (Rs, 467.20 Lacs (negative)) transferred to HTDSL, was recorded as Capital Reserve in the books of the Company. The Company followed the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 and other Generally Accepted Accounting Principles as on the Appointed Date in accordance with the scheme approved by Honâble Delhi High Court. This is not similar to the accounting as per applicable Indian Accounting Standards (Ind-AS) prescribed under Section 133 of the Companies Act, 2013, read with relevant rules issued there under. However, this was in compliance with Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 and other Generally Accepted Accounting Principles as applicable when the scheme was filed before with Honâble High Court and as on the Appointed Date i.e. March 31, 2016.
c) The revenues earned and expenses incurred for the nine months period i.e. from the Appointed Date to the Effective Date were transferred to HTDSL on the effective date which resulted into lower profit after tax amount of '' 804.00 Lacs during the current year.
14. EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made based on actuarial valuation done by independent valuer.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. The Company has purchased insurance policy, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate, in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset.
The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet:
Defined Gratuity Plan
Changes in the defined benefit obligation and fair value of plan assets as at March 31, 2017 :
15. SHARE-BASED PAYMENTS
In accordance with the Securities and Exchange Board of India (Share Based Employee benefits) Regulations, 2014 and Ind-AS 102 Share-based payment the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the Company. To have an understanding of the scheme, relevant disclosures are given below.
I. As approved by the shareholders at their Extra-ordinary General Meeting held on October 21, 2005, during an earlier year, the Company has given interest-free loan ofRs, 2,174.28 lacs to HT Media Employee Welfare Trust which in turn purchased 468,044 Equity Shares of Rs, 10/- each of HT Media Limited (as on date equivalent to 23,40,220 Equity Shares of Rs, 2/- each) from the open market [average cost per share - Rs, 92.91 based on Equity Share ofRs, 2/- each], for the purpose of granting Options under the âHTML Employee Stock Option Schemeâ (the Scheme), to eligible employees.
During the financial year 2007-08, the Scheme was modified to the effect - (a) Options granted w.e.f. September 15, 2007 shall vest as per previous revised schedule of vesting period; and (b) to extend the coverage of the Scheme to the eligible full-time employees of the subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of vesting period which are hereinafter referred to as âPlan Aâ, âPlan Bâ (applicable to Options granted w.e.f. September 15, 2007) and Plan C (applicable to Options granted w.e.f. October 8, 2009). Options granted under both the plans are exercisable for a period of 10 years after the scheduled vesting date of the last tranche of the Options as per the Scheme.
The Company has availed exemption under Ind-AS 101 in respect of Share-based payments that had been vested before the transition date. The Company has elected to avail this exemption and accordingly, vested options have been measured at intrinsic value .
The employee compensation cost (accounting charge for the year) calculated using the intrinsic value of stock options is Rs, NIL (March 31,2016: Rs, NIL)
II. The subsidiary company, Firefly e-Ventures Limited has given Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML). A. Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of Firefly e-Ventures Limited at a Axed price within a specific period of time.
III. HT Media Limited has given loan of Rs, 242.70 lacs to âHT Group Companies - Employee Stock Option Trustâ which in turn has purchased 37,338 Equity Shares ofRs, 10/- each of Hindustan Media Venture Limited (HMVL) - Subsidiary Company of HT Media Limited, for the purpose of granting Options under the âHT Group Companies -Employee Stock Option Schemeâ (the Scheme), to eligible employees of the group. On these purchased shares, the trust has also received 238,964 shares out of the bonus shares issued by the HMVL on February 21, 2010.
Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of HMVL at a Axed price within a specific period of time.
B. Other Commitments Commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital Goods(âEPCGâ) Scheme for importing capital goods at a concessional rate of customs duty against submission of bonds in September, 2008.
Under the terms of the respective scheme, the Company is required to export goods or/and services of FOB value equivalent to eight times the duty saved in respect of licenses within eight years from the date of issuance of license.
Accordingly, the Company is required to export goods and services of FOB value ofRs, 20,016.89 lacs by September 18, 2018. The balance export obligation left as on March 31, 2017 is Rs, 2,170.56 lacs (March 31,2016Rs, 5,505.92 lacs, April 1, 2015 Rs, 7,958.46 lacs ). The management is confident of fulfilling the said commitment within the stipulated time or extended time as allowed.
Commitment to invest in specific funds
As on March 31, 2017, the Company has invested in âTandem III, LPâ, âBlume Ventures Fund IAâ, âTrifecta Venture Debt Fund-Iâ and âParagon Partners Growth Fund -1â USD 15 lacs, Rs, 200 lacs, Rs, 1392.80 lacs and Rs, 720.00 Lacs respectively.
Underthe terms of the respective agreements, as on March 31, 2017, the company is required to further invest USD 35 lacs (March 31, 2016: USD 40 lacs, April 1, 2015: USD 40 Lacs), Rs, Nil (March 31, 2016: Rs, 60 lacs, April 1, 2015: Rs, 120 lacs), Rs, 607.20 Lacs (March 31, 2016: Rs, 1252.50 lacs, April 1, 2015: Nil) and Rs, 280.00 Lacs (March 31, 2016: Nil , April 1, 2015: Nil) in âTandem III, LPâ, âBlume Ventures Fund IAâ, âTrifecta Venture Debt Fund-1â and âParagon Partners Growth Fund -1â respectively.
(c) Contingent Liabilities
Claims against the Company not acknowledged as debts Legal claim contingency
(i) Income- tax authorities have raised additional demands for Rs, 405.67 lacs (March 31, 2016 Rs, 405.67 lacs, April 1, 2015 Rs, 761.08 lacs) for various financial years. The tax demands are mainly on account of disallowances of expenses claimed by the Company under the Income Tax Act. The matters are pending before various authorities. The Company is contesting the demands and the management believes that its position will likely to be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
(ii) Service tax authorities have raised additional demands for Rs, 316.67 lacs (March 31, 2016 Rs, 316.67 lacs, April 1, 2015 Rs, 316.67 lacs) for various financial years. The matters are pending before Service Tax Appelate Tribunal. The Company is contesting the demands and the management believes that its position will likely to be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
(iii) During the year ended March 31, 2005, the Company acquired the printing undertaking at New Delhi from the Hindustan Times Limited (HTL). Ex-workmen of HTL challenged the transfer of business by way of a writ in Honorable Delhi High Court, which was quashed on May 9, 2006. Thereafter these workmen raised the industrial dispute before various forums like Delhi Government, Industrial Tribunal-I, New Delhi (Tribunal) and Delhi High Court.
The case was decided by way of award by Industrial Tribunal, on January 23, 2013, wherein the workmen were granted ârelief of treating them in continuity of services under terms and conditions of service as before their alleged termination w.e.f. October 3, 2004. As per the award, they will not be entitled to any notice pay or compensation u/s25 FF of Industrial Dispute Act. The said notice pay or compensation, if any, received by them, will have to be refunded to the Company.
The said award after publication came into operation w.e.f. April 1, 2012. The Management issued several letter(s) to the workmen followed by the public notice asking them to refund the notice pay and retrenchment compensation so received, as directed by Industrial Tribunal, however, there was no response from the workman.
The workman also filed the Execution Proceeding for Back wages on April 2, 2012, Execution Court vide its order dated October 8, 2012, held that âNo Back Wagesâ have been granted and decree in relation thereto cannot be executedâ. The Execution Court vide its order dated January 4, 2013 directed the management to reinstate the workman without insisting for refund of notice pay and retrenchment compensation The said order of the Ld. Execution Court was challenged and pending decision before High Court of Delhi. As HTL has no factory, the management has offered a notional reinstatement w.e.f. April
18, 2013 and salary from April 18, 2013. The Petitioner informed the High Court of Delhi in September, 2013 that since the management is currently engaged in real estate management and investment, it can give fresh non-industrial work to a maximum of 38 (thirty eight) workmen based on seniority. It was also submitted that the petitioner Company has no work to offer except as stated above and will accordingly exercise its rights and remedies as available under the Industrial Disputes Act, 1947 qua the remaining workmen. In terms of its submissions, the management issued letter of posting to 38 workmen on December 4, 2013 and paid compensation under Section 25FFF of the Industrial Dispute Act, 1947 to remaining 167 workmen on account of closure of printing undertaking/factory long back. Final arguments were concluded and the Judgment was delivered by Single Bench of Delhi High Court on September 14, 2015 wherein Court had relied on the Judgment of Division Bench and held that the parties will be at liberty to pursue the logical corollary. The proceedings before the Execution Court re-started after judgment of Single Bench of Delhi High Court. The Execution Court after hearing both the parties passed the order directing the Company to reinstate the workmen as per the award dated January 23, 2012 as earlier reinstatement was not in accordance with Award and also directed management to make payment of wages accordingly. The Management has challenged the said order of Execution Court before single bench of Honâble High Court wherein the pleadings are complete and matter is listed for final arguments. In the mean time the workmen filed an application for relief of interim wages under Section 17B of the Industrial Disputes Act, 1947 in the same writ petition of management. The Ld. Single Judge allowed the said application vide its order dated March 1, 2017 and directed the management to pay last drawn monthly wages w.e.f. March 1, 2017 The said order of the single bench is challenged by the management in LPA 176 /2017 before Division Bench of Delhi High Court wherein the Division Bench has stayed the impugned order dated March 15, 2017 to the extent of the direction for payment of monthly wages to the respondents. The Honâble Division Bench has disposed of the LPA 176/2017 on 20.04.2017 and granted Hindustan Times Ltd. an opportunity to file reply to the application under Section 17B before single bench of Honâble High Court.
After the Petition of management challenging the order of Execution Court dated January 4, 2013, the workmen also filed Writ Petition against the order of Ld. Execution Court dated October 8, 2012 denying them back wages. The Single Bench of Delhi High Court pronounced the judgment on November 17, 2014 in favour of the workmen that Back wage are payable to them. The management challenged the said order before Division Bench of Delhi High Court, which pronounced the judgment on February 23,2015, wherein it held that no back wages are granted to the workmen vide award dated January 23, 2012. The workmen approached the Honâble Supreme Court against the said order of Division Bench. The said SLP filed by the workmen against the judgment of Division Bench of Delhi High Court, was dismissed by Honâble Supreme Court vide order dated August 1, 2016 affirming the views that no back wages are being granted in the award dated January 23, 2012. Some other workmen filed another SLP (C) No. 28705/2015 challenging the same order of Division Bench, Delhi High Court, virtually on same grounds, which is pending for hearing though there is a likely hood of same fate as of another SLP which is already decided on August 1, 2016. The workmen thereafter filed a fresh Writ Petition before the single bench of Delhi High Court challenging the award dated January 23, 2012 to the extent of denial of back wages. The said Writ Petition was dismissed by single bench of Delhi High Court vide its judgment dated October 3, 2016 on the ground of res- judicata and on account of delay or latches. The judgments of the single bench of Delhi High Court is challenged by the workmen before Division Bench of High Court, wherein notice has been issued to the Company and matter is pending before Division Bench of Delhi High Court.
(iv) The Company is involved in various litigations the outcome of which are considered probable and in respect of which the Company has aggregate provisions of Rs, 1,147.45 lacs as at March 31, 2017 (March 31, 2016 Rs, 1,030.17 lacs, April 1, 2015 Rs, 842.64 lacs).
16. RELATED PARTY TRANSACTIONS
Following are the Related Parties and transactions entered with related parties for the relevant financial year:
i) List of Related Parties and Relationships:-
Parties having direct or indirect control over the Earthstone Holding (Two) Limited*_
Company (Holding Company) The Hindustan Times Limited
Subsidiaries (with whom transactions have occurred Hindustan Media Ventures Limited
during the year) HT Music and Entertainment Company Limited
Firefly e-Ventures Limited HT Digital Media Holdings Limited HT Mobile Solutions Limited HT Overseas Pte. Limited HT Education Limited HT Learning Centers Limited HT Global Education
HT Digital Information Private Limited (Formerly Ed World Private Limited) HT Digital Streams Limited Topmovies Entertainment Limited Joint Venture India Education Services Private Limited
My Parichay Services Private Limited (Relationship ceased w.e.f. /^oaate March 31, 2016)
Entities which are post employment benefits plans. HT Media Limited Working Journalist Gratuity Fund
(with whom transactions have occurred during the year) HT Media Limited Non Journalist & Other Employees Gratuity Fund
Group companies where common control exists Paxton Trexim Private Limited (Relationship ceased w.e.f. January 18,2016)
Key Management Personnel Mrs. Shobhana Bhartia
(with whom transactions have occurred during the year) Mr. Shamit Bhartia
Mr. Dinesh Mittal (whole time director w.e.f May 26, 2016)
Mr. Rajiv Verma (Ceased to be whole time director w.e.f. March 10, 2016) Mr. N.K. Singh (Non-Executive Independent Directors)
Mr. Vikram Singh Mehta (Non-Executive Independent Director)
Mr. K. N. Memani (Non-Executive Independent Director)
Relative of Key Management Personnel Mrs. Nutan Mittal (Relative of Dinesh Mittal)
(with whom transactions have occurred during the year)
*Earthstone Holding (Two) Limited is the holding Company ofThe Hindustan Times Limited.
ii) Transactions with related parties
Refer Note 36 A
iii) Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
iv) Transactions with key management personnel
Refer Note 36 A
17. SEGMENT INFORMATION
For the purpose of management review, the Company is organized into business units based on the nature of products and services and has three reportable segments, as follows:
- Printing and Publication of Newspapers & Periodicals
- Business of Radio Broadcast and all other related activities through its Radio channels operating under brand name âFever 104â, âFeverâ and âRadio Nasha 107.2â in India.
- Digital - Business of providing internet related services through a job portal Shine.com, online content market place htsyndication.com and news websites Hindustan times. com and livemint.com
The management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on its profit and loss and is measured consistently with profit and loss of the Company. Also, the
Companies financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.
The financial information for these reportable segments has been provided in Consolidated Financial Results as per Ind-AS 108 - Operating Segments.
18. HEDGING ACTIVITIES AND DERIVATIVES Derivatives not designated as hedging instruments
The Company uses foreign exchange forward contracts, Options, Interest rate swap, coupon only swap etc. to manage its foreign currency exposures. These contracts are not designated as cash flow hedges and are entered into for periods consistent with underlying transactions exposure.
19. FAIR VALUES
Set out below, is a comparison by class of the carrying amounts and fair value of the companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
The management assessed that cash and cash equivalents, other bank balances, trade receivables, other current financial asset, trade payables Current Borrowings and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
- The fair values of the companies interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own nonperformance risk was assessed to be insignificant.
- The fair values of the investment in unquoted equity shares/ debt instruments/ preference shares have been estimated using a DCF model or comparable investment price such as last round of funding made in the investee company. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted investments.
-The fair values of The investment in unquoted equity shares of IESPL valued at FVTOCI have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows and discount rate. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted investments.
- Investments in quoted mutual funds being valued at Net Asset Value.
- Investments in venture capital funds are valued using valuation techniques, which employs the use of market observables inputs and the assessment of Net Asset Value.
- Investments in quoted equity shares are valued at closing price of stock on recognized stock exchange.
- The Company enters into derivative financial instruments such as Interest rate swaps, Coupon only swap, Call Spread Options, foreign exchange forward contracts being valued using valuation techniques, which employs the use of market observable inputs. The company uses Mark to Market valuation provided by Bank for valuation of these derivative contracts.
- The loans and investment in bonds are evaluated by the company based on parameters such as interest rate, risk factors, risk characteristics and individual credit-worthiness of the counterparty. Based on this evaluation, allowances are taken into account for the expected losses.
The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2017 and March 31, 2016 are as shown below:
20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the companyâs operations and to support its operations. The companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The company also enters into derivative transactions.
The company is exposed to market risk, credit risk and liquidity risk. The companyâs senior management oversees the management of these risks. The Companies financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companies policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the companies policy that no trading in foreign exchange derivatives for speculative purposes will be undertaken. The policies for managing each of these risks, which are summarized below:-
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and derivative financial instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2017 and March 31, 2016.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of flexed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2017.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations and provisions.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The companyâs exposure to the risk of changes in market interest rates relates primarily to the companyâs current debt obligations with flxed interest rates.
The Company manages its interest rate risk for short term borrowings by raising funds at a flxed rate and for Long term borrowing by selectively using interest rate swaps, coupon only swap and other derivative instruments to manage its exposure to interest rate movements. These exposures are reviewed by appropriate levels of management as and when required.
The weighted average interest rate on the fixed rate financial liabilities is 6.13 % p.a. interest rate sensitivity for floating borrowings
The table below illustrates the impact of a 0.5% to 1.50% movement in interest rates on interest expense on loans and borrowings. The risk estimate provided assumes that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the companies operating activities (when revenue or expense is denominated in a foreign currency), investment & borrowing in foreign currency etc.
The company manages its foreign currency risk by hedging foreign currency transactions with forward covers and option contracts. These transactions generally relates to purchase of imported newsprint, investment & borrowings in foreign currency.
When a derivative is entered into for the purpose of being a hedge, the company negotiates the terms of those derivatives to match the terms of the underlying exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Companyâs profit tax is due to change in the fair value of monetary assets & liabilities.
Commodity price risk
The company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of newsprint and Ink and therefore require a continuous supply. Due to the volatility of the price of the newsprint, the Company also entered into various purchase contracts.
The management of company has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.
Commodity price sensitivity
The following table shows the effect of price changes in newsprint & Ink
Equity price risk
The Company invests in listed and non-listed equity securities which are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The companies Investment Committee reviews and approves all equity investment decisions.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10A. The Company does not hold collateral as security.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the companyâs policy. Investments of surplus funds are made as per guidelines and within limits approved by Board of Directors. Board of Directors/ Management reviews and update guidelines, time to time as per requirement. The guidelines are set to minimize the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.
Liquidity risk
The Company monitors its risk of shortage of funds.
The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of Bank overdrafts, Bank loans & Money Market Borrowing. Approximately 98% of the Companyâs debt will mature in less than one year at March 31, 2017 (March 31, 2016: 96%, April 1, 2015: 75%) based on the carrying value of borrowings reflected in the financial statements.
The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding i.e. investments / Bank limits for Borrowing/ cash accrual from Operation and debt maturing within 12 months can be paid/ rolled over with existing lenders.
Collateral
The Company has pledged part of its Investment in Mutual Funds in order to fulfil the collateral requirements for Borrowing. At March 31,2017, March 31,2016 and April 1, 2015, the invested values of the Investment in Mutual Funds pledged were Rs, 18,949.00 lacs, Rs, 23,116.00 lacs and Rs, 25,500.00 lacs, respectively. The counterparties have an obligation to return the securities to the company and the company has an obligation to repay the borrowing to the counterparties upon maturity/ Due Date. There are no other significant terms and conditions associated with the use of collateral. Securities except pledge given against outstanding Bank facilities details is provided in borrowing note.
21. CAPITAL MANAGEMENT
For the purpose of the companies capital management, capital includes issued equity capital, share premium and all other equity reserves. The primary objective of the companies capital management is to maximise the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
In order to achieve this overall objective, the companies capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. The Company has satisfied all financial debt covenants prescribed in the terms of bank loan except Total Debt to EBITDA ratio. Required waiver approval dtd January 9, 2017 has been obtained from Citi Bank to condone the non-compliance and non-adherence of the Total Debt to EBITDA Ratio till September 30, 2017 for FCNR & ECB loan.
22. STANDARDS ISSUED BUT NOT YET EFFECTIVE
In March 2017, the Ministry of Corporate Affairs issued the companyâs (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to lnd-AS-7, âStatement of cash flowsâ and Ind-AS 102, âShare- based paymentâ. These amendments are in accordance with the recent amendments made by International Accounting standards Board (IASB) to IAS 7, â Statement of cash flowsâ and IFRS 2, âShare- based paymentâ respectively. The amendments are applicable to the Company from April 1, 2017.
Amendment to Ind-AS 7 Statement of Cash flows
The amendment to Ind-AS 7 required the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non- cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balances sheet for liabilities arising from financing activities, to meet the disclosure requirements. The effect on the financial statements is being evaluated by the Company.
Amendment to Ind-AS 102 :
The amendment to Ind-AS 102 provides specific guidance to measurement of cash settled awards, modification of cash settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash settled awards is determined on a basis consistent with that used for equity settled awards. Market based performance conditions and non- vesting conditions are reflected in the âfair valuesâ, but non- market performance conditions and services vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash settled share based payment transaction are modified with the result that it becomes an equity settled share based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. The effect on the financial statements is being evaluated by the Company.
In accordance with the opinion of Expert Advisory Committee (EAC) of âThe Institute of Chartered Accountants of Indiaâ (issued in the month of March 2014), the Company has consolidated the financial statements of HT Media Employee Welfare Trust (âTrustâ) in the standalone financial statements of the Company. Accordingly, the amount of loan of '' 2,003.78 Lacs (March 31,2016:-Rs, 2,003.78 Lacs and April 1,2015:-Rs, 2,003.78 Lacs) outstanding in the name of Trust in the books of the Company at the yearend has been eliminated against the amount of loan outstanding in the name of Company appearing in the books of Trust at the year end. Furthe
Mar 31, 2016
1. CONTINGENT LIABILITIES
a) Income-tax authorities have raised additional demands for Rs, 405.67 Lacs (Previous Year Rs, 761.08 Lacs) for various financial years. The tax demands are mainly on account of disallowances of expenses claimed by the company under the Income-tax Act. The matters are pending before various authorities. The Company is contesting the demands and the management believes that its position will likely be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
b) Service-tax authorities have raised additional demands for Rs, 316.67 Lacs (Previous Year Rs, 316.67 Lacs) for various financial years. The
matters are pending before Service Tax Appellate Tribunal. The Company is contesting the demands and the management believes that its position will likely be upheld. No tax expenses have been accrued in the financial statements for these tax demands.
c) During the year ended 31 March 2005, the Company acquired the printing undertaking at New Delhi from The Hindustan Times Limited (HTL). Ex-workmen of HTL challenged the transfer of business by way of a writ in Honâble Delhi High Court, which was quashed on 9 May 2006. Thereafter these workmen raised the industrial dispute before various forums like Delhi Government, Industrial Tribunal-I, New Delhi (Tribunal) and Delhi High Court.
The case was decided by way of award by Industrial Tribunal, on 23 January 2012, wherein the workmen were granted ârelief of treating them in continuity of services under terms and conditions of service as before their alleged termination w.e.f. 3 October 2004. As per the award, they will not be entitled to any notice pay or compensation u/s 25 FF of Industrial Dispute Act. The said notice pay or compensation, if any, received by them, will have to be refunded to the Company.â
The said award after publication came into operation w.e.f. 1 April 2012. The Management issued several letter(s) to the workmen followed by the public notice asking them to refund the notice pay and retrenchment compensation so received, as directed by Industrial Tribunal, however, there was no response from the workmen.
The workmen also filed the Execution Proceeding for Back wages on 2 April 2012, Execution Court vide its order dated 8 October 2012, held that âNo Back Wagesâ have been granted and decree in relation thereto cannot be executedâ. The Execution Court vide its order dated 4 January 2013 directed the management to reinstate the workmen without insisting for refund of notice pay and retrenchment compensation The said order of the Ld. Execution Court was challenged and pending decision before High Court of Delhi. As HTL has no factory, the management has offered a notional reinstatement w.e.f. 18 April 2013 and salary from 18 April 2013. The Petitioner informed the High Court of Delhi in September, 2013 that since the management is currently engaged in real estate management and investment, it can give fresh non-industrial work to a maximum of 38 (thirty eight) workmen based on seniority. It was also submitted that the petitioner company has no work to offer except as stated above and will accordingly exercise its rights and remedies as available under the Industrial Disputes Act, 1947 qua the remaining workmen. In terms of its submissions, the management issued letter of posting to 38 workmen on 4 December 2013 and paid compensation under Section 25FFF of the Industrial Dispute Act, 1947 to remaining 167 workmen on account of closure of printing undertaking/factory long back. Final arguments were concluded and the Judgment reserved by Delhi High Court on 27 May 2014, which is still pending for judgment.
After the Petition of management, the workmen also filed Writ Petition against the order of Ld.
Execution Court dated 8 October 2012 denying them back wages. The Single Bench of Delhi High Court pronounced the judgment on 17 November 2014 in favour of the workmen that Back wage are payable to them. The management challenged the said order before Division Bench of Delhi High Court, which pronounced the judgment on 23 February 2015, wherein it held that no back wages are granted to the workmen vide award dated 23 January 2012. The workmen have approached Honâble Supreme Court against the said order, wherein notice is issued without any stay on the final order of the Honâble Division Bench.
d) The Company is involved in various litigations the outcome of which are considered probable and in respect of which the company has aggregate provisions of Rs, 1,030.17 lacs (Previous Year: Rs, 842.64 lacs) as at 31 March 2016.
2. SEGMENT INFORMATION
The primary segment reporting format is determined to be business segments as the companyâs risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products.
Primary Segment Business Segment
The Company is presently engaged in the business of Printing and Publication of Newspapers & Periodicals, business of radio broadcast and all other related activities through its Radio channels operating under brand name âFever 104â and recently launched âRadio Nasha 107.2â in India and business of providing internet related services through a job portal Shine.com and a news website hindustantimes.com. Accordingly the Company has organised its operations into three major businesses: âPrinting and Publishing of Newspapers and Periodicalsâ, âRadio Broadcast & Entertainmentâ and âDigitalâ.
Secondary Segment Geographical Segments
The Companyâs operations are mostly within India and do not have operations in economic environments with different risks and returns. Hence, it is considered operating in single geographical segment.
3. In terms of the Scheme of Arrangement and Restructuring u/s 391-394 read with Sections 100-104 of the Companies Act, 1956 between the Company and HT Music and Entertainment Company Limited (Demerged Company) as approved by the Honâble Delhi High Court, the assets and liabilities of the radio business of the Demerged company were taken over as at 1 January 2009. One Time Entry Fees (OTEF) paid for acquiring license for Radio business paid by the Demerged Company in earlier years which was capitalized and amortized on straight line basis, is now amortized against the credit balance of Securities Premium Account instead of charging to the statement of profit and loss, over the useful life of the said licenses or their unexpired period (whichever is lower) from date of Merger of Radio business as per the approved Scheme. Consequently an amount of Rs, 767.52 Lacs (Previous Year Rs, 765.42 Lacs) towards amortization of Radio Licenses has been debited to the Securities Premium Account.
4. SHARE BASED COMPENSATION
In accordance with the Securities and Exchange Board of India (Share Based Employee benefits) Regulations,
2014 and the Guidance Note on Accounting for âEmployees Share-based Payments, the scheme detailed below is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the group company and the parent company. To have an understanding of the scheme, relevant disclosures are given below.
I. As approved by the shareholders at their Extraordinary General Meeting held on 21 October 2005, during an earlier year, the Company has given interest-free loan of Rs, 2,174.28 Lacs to HT Media Employee Welfare Trust which in turn purchased 468,044 Equity Shares of Rs, 10/- each of HT Media Limited (as on date equivalent to 2,340,220 Equity Shares of Rs, 2/- each) from the open market [average cost per share - Rs, 92.91 based on Equity Share of Rs, 2/- each], for the purpose of granting Options under the âHTML Employee Stock Option Schemeâ (the Scheme), to eligible employees.
During the financial year 2007-08, the Scheme was modified to the effect - (a) Options granted w.e.f. 15 September 2007 shall vest as per previous revised schedule of vesting period; and (b) to extend the coverage of the Scheme to the eligible full-time employees of the subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of vesting period which are hereinafter referred to as âPlan Aâ, âPlan Bâ (applicable to Options granted w.e.f. 15 September 2007) and Plan C (applicable to Options granted w.e.f. 8 October 2009). Options granted under both the plans are exercisable for a period of 10 years after the scheduled vesting date of the last tranche of the Options as per the Scheme.
10 years after the scheduled vesting date of the last tranche of the
Exercise Period
Options, as per the Scheme
Employee remaining in the employment of the Company during the
Vesting Conditions
vesting period
Difference between employee compensation cost (calculated using the fair value of stock options) and the employee compensation cost (calculated on the intrinsic value of the options) is Rs, Nil (Previous year credit of Rs,14.02 Lacs) which will result into profit of Rs, Nil (Previous year profit of Rs, 14.02 Lacs).
II. The subsidiary company, Firefly e-Ventures Private Limited has given Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of Firefly e-Ventures Limited at a fixed price within a specific period of time.
Difference between employee compensation cost (calculated using the fair value of stock options) and the employee compensation cost (calculated on the intrinsic value of the options) is Rs, 2.75 Lacs (credit) (Previous Year Rs, 0.57 Lacs) which will result into profit of Rs, 2.75 Lacs. However, these have not been charged back to the company by the subsidiary company, hence not accounted for by the Company.
III HT Media Limited has given loan of Rs, 242.70 Lacs to âHT Group Companies - Employee Stock Option Trustâ which in turn has purchased 37,338 Equity Shares of Rs, 10/- each of Hindustan Media Venture Limited (HMVL) - Subsidiary Company of HT media Limited, for the purpose of granting Options under the âHT Group Companies -Employee Stock Option Schemeâ (the Scheme), to eligible employees of the group. On these purchased shares, the trust has also received 238,964 shares out of the bonus shares issued by the HMVL on 21 February 2010.
Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of the HMVL at a fixed price within a specific period of time.
Options granted are exercisable for a period of 10 years after the scheduled vesting date of last tranche as per the Scheme.
The Company has recognized an expense of Rs, Nil (Previous year Rs, Nil) during the year for intrinsic value charge of ESOPs issued to its employees under this Scheme.
Difference between employee compensation cost (calculated using the fair value of stock options) and the employee compensation cost (calculated on the intrinsic value of the options) is Rs, Nil (Previous Year Rs, Nil).
IV. The subsidiary company, HT Mobile Solution Limited has given Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares of HT Mobile Solution Limited at a fixed price within a specific period of time.
Difference between employee compensation cost (calculated using the fair value of stock options) and the employee compensation cost (calculated on the intrinsic value of the options) is Rs, 0.22 Lacs(credit) (Previous Year Rs, 1.18 Lacs ) which will result into profit of Rs, 0.22 Lacs. However, these have not been charged back to the company by the subsidiary company, hence not accounted for by the Company.
Had the fair value method been used for accounting in all schemes above, the profit would have been higher by Rs, 2.97 Lacs (Previous year Rs, 12.27 Lacs) and adjusted basic and diluted EPS would have been Rs, 4.64 (Previous year Rs, 4.89) per share.
Commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital Goods (âEPCGâ) Scheme for importing capital goods at a concessional rate of customs duty against submission of bonds in September 2008.
Under the terms of the respective scheme, the Company is required to export goods or/and services of FOB value equivalent to eight times the duty saved in respect of licenses within eight years from the date of issuance of license.
Accordingly, the Company is required to export goods and services of FOB value of Rs, 20,016.89 Lacs by 18 September 2018. The balance export obligation left as on 31 March 2016 is Rs, 5,505.92 Lacs (Previous Year Rs, 7,958.46 Lacs). The management is confident of fulfilling the said commitment within the stipulated time or extended time as allowed.
Commitment to Invest in Specific Funds
As on 31 March 2016, the Company has invested in Tandem III, LPâ, âBlume Ventures Fund IAâ and âTrifecta Venture Debt Fund - Iâ USD 10.00 Lacs, Rs, 240.00 Lacs and Rs, 747.80 Lacs, respectively.
Under the terms of respective agreements, as on Mar 31, 2016 the company is required to further invest USD 40.00 Lacs (Previous Year: USD 40.00 Lacs), Rs, 60.00 Lacs (Previous Year: Rs, 180 Lacs), and Rs, 1,252.20 Lacs (Previous Year Rs, Nil) in Tandem III, LPâ, âBlume Ventures Fund IAâ and âTrifecta Venture Debt Fund - Iâ, respectively.
5. GRATUITY (POST EMPLOYMENT BENEFIT PLAN)
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made based on actuarial valuation done by independent valuer.
The following table summarizes the components of net benefit expenses recognized in the Statement of Profit and Loss Account and the funded status and amount recognized in the Balance Sheet for respective plans:
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors on long term basis. The Company expects to contribute '' 840.49 Lacs (Previous year Rs, 898.16 Lacs) to gratuity fund during the year 2016-17.
Disclosure of the amount required by paragraph 120(n) of AS-15:
6. INTEREST IN JOINT VENTURE
During the year 2011-12, the Company had entered into an agreement with Apollo Global Singapore Holdings Pte. Ltd., part of Apollo Group, Inc. (U.S.A.), to participate in a 50:50 joint venture company which is intended to provide high quality educational services and programs in India. For this purpose, India Education Services Private Limited (IESPL) was incorporated as a wholly-owned subsidiary on 24 October 2011, which later became a 50:50 joint venture w.e.f. 21 December 2011 in terms of the said agreement.
7. RELATED PARTY DISCLOSURES (AS PER ACCOUNTING STANDARD 18) i) List of Related Parties and Relationships:-
Parties having direct or indirect control over the Company (Holding Earthstone Holding(Two) Limited*
Company) The Hindustan Times Limited
Subsidiaries (with whom transactions have occured during the year) Hindustan Media Ventures Limited
HT Music and Entertainment Company Limited
Firefly e- Ventures Limited
HT Digital Media Holdings Limited
HT Mobile Solutions Limited
HT Overseas Pte. Limited
HT Education Limited
HT Learning Centers Limited
HT Global Education
HT Digital Information Private Limited (Formerly Ed World Private Limited)
HT Digital Streams Limited Topmovies Entertainment Limited
Ivy Tlent India Private Limited (Relationship ceased w.e.f.
Joint Venture India Education Services Private Limited
MyParichay Services Private Limited (Relationship ceased
Associate
w.e.f. 31 March 2016)
Group companies where common control exists Paxton Trexim Private Limited (Relationship ceased w.e.f.
(with whom transactions have occurred during the year) 18 January 2016)
Shobhana Bhartia
Key Management Personnel and their relatives Shamit Bhartia
Rajiv Verma
*Earthstone Holding (Two) Limited is the holding Company of The Hindustan Times Limited.
* The advance consists of Investments in Zero-coupon Compulsory Convertible Debentures of HT Digital Media Holdings Limited. The loan have been utilised by HT Digital Media Holdings Limited for making investments in its subsidiaries. These debentures were converted into equity shares during the year.
** The inter-corporate deposit given to Ivy Talent India Private Limited is unsecured and was repayable on or before 30 June 2015. The loan carries interest @ 10% p.a. The loan has been utilized by Ivy Talent India Private Limited to meet its operational needs.
8. a) Capital Advances include Rs, 100.94 lacs (Previous year Rs, 100.94 lacs) paid towards Companyâs proportionate
share for right to use in the Common Infrastructure for channel transmission (for its four stations) to be built on land owned by Prasar Bharti and to be used by all the broadcasters at respective stations as per the terms of bid document on FM Radio Broadcasting (Phase II).
b) During the year, the Company has launched its second radio station, Radio Nasha 107.2 FM, in Delhi. The commercial launch of Radio Nasha 107.2 FM in Delhi on 9 March 2016 is the first of the phase III radio launches by the Company, which had acquired 10 new frequencies across Delhi, Mumbai, Hyderabad and UP during the phase III radio licence auction for validity of 15 years, against bid(s) for an aggregate Non-Refundable One-time Entry Fee of '' 33,979 Lacs. Recently, the Company has also launched its second radio station, Radio Nasha 91.9 FM, in Mumbai from 4 April 2016. The Company is in the process of getting the remaining 8 New Channels commercially operationalized subject to requisite approvals and completion of infrastructure.
9. In accordance with the opinion of Expert Advisory Committee (EAC) of âThe Institute of Chartered Accountants of Indiaâ (issued in the month of March 2014), the Company has consolidated the financial statements of HT Media Employee Welfare Trust (âTrustâ) in the standalone financial statements of the Company. Accordingly, the amount of loan of Rs, 2,003.78 Lacs (previous year Rs, 2,003.78 Lacs) outstanding in the name of Trust in the books of the Company at the year end has been eliminated against the amount of loan outstanding in the name of Company appearing in the books of Trust at the year end. Further, the investment of Rs, 2,068.10 Lacs (previous year Rs, 2,068.10 Lacs) made by the Trust in the equity shares of the Company (through secondary market) has been shown as deduction from the Share Capital to the extent of face value of the shares [Rs, 44.57 Lacs (previous year Rs, 44.57 Lacs)] and Securities Premium Account to the extent of amount exceeding face value of equity shares [Rs, 2,023.53 Lacs (previous year Rs, 2,023.53 Lacs)]. Further, the amount of dividend of Rs, 8.91 Lacs (previous year Rs, 9.30 Lacs) received by the Trust from the Company during the year end has been added back to the surplus in the statement of profit and loss.
10. CSR EXPENDITURE
Pursuant to the applicability of CSR (Corporate social responsibility) provisions of the Companies Act, 2013, the Company has made the requisite expenditure towards CSR as per details below:
a) Gross amount required to be spent by the Company during the year is Rs, 245 Lacs (Previous Year: Rs, 272 Lacs).
11. CAPITALIZATION OF EXPENDITURE
During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.
For detailed particulars and purpose of above loans refer note 34 (I) and 34 (III).
*The loan given to HT Media Employee Welfare Trust has been eliminated on consolidation of HT Media Employee Welfare Trust in the standalone financial statements of the Company (refer note 49).
For details of loans and advances provided to related parties, refer note 39 Details of Investments made are given under the respective notes.
Note:-
a) During the year, Company has sold the Hindi Business Brand [i.e. Hindustan, Hindustan.in, Nandan, Kadambini, Hum Tum and certain other Hindi publication related trademarks (the âHindi Business Trademarksâ)] to its subsidiary company, Hindustan Media Ventures Limited.
b) The Company made provision of Rs. 4,096.00 Lacs for diminution in value of its investment held in a step down subsidiary Firefly e-Ventures Limited (FEVL) . The provision consists of Rs 1,699.84 lacs in the value of Investments held directly by the Company in FEVL and Rs 2,396.16 lacs for investment held by the Company in FEVL through its wholly owned subsidiary HT Digital Media Holdings Limited (parent company of FEVL). The provision is triggered by substantial decline in net worth of FEVL.
c) During the previous year, Ivy Talent India Private Limited (a wholly owned subsidiary), had made a provision of Rs 1,669.23 lacs towards permanent decline in the value of investments held by it in MyParichay Services Private Limited triggered by substantial decline in the scale of operation of MyParichay Services Private Limited due to certain permanent adverse business development. Consequently, a provision amounting to Rs 1,669.23 lacs for diminution in value of investment was made by the Company in Ivy Talent India Private Limited accounted for and disclosed as exceptional item in these financial statements.
12. DISCONTINUING OPERATIONS
The Board of Directors of the Company at its meetings held on 19 November 2015, on the recommendation of the Audit Committee, had approved the transfer and vesting of the Multi-media Content Management Undertaking of the Company (âMMCM Undertakingâ) to and in HT Digital Streams Limited (Transferee Company), a wholly-owned subsidiary, as a âgoing concernâ on a slump exchange basis by way of issue of fully paid-up equity shares of the Transferee Company to the Company.
The proposed transfer of the MMCM Undertaking to Transferee Company shall be in terms of a Scheme of Arrangement u/s 391-394 of the Companies Act, 1956 (âSchemeâ). During the quarter BSE and NSE have given their âNo Objectionâ to the Scheme as per clause 24(f) of the erstwhile Listing Agreement. Further, pursuant to the order of Honâble High Court of Delhi, meeting of Shareholders, Secured and Unsecured creditors of the Company was convened, wherein, the Scheme was approved with requisite majority. The petition seeking sanction of the Scheme has been filed by the Company with Honâble High Court of Delhi, and same has been listed for hearing on 13 July 2016.
Pending sanction of the Scheme, the impact of the Scheme is not considered in these financial statements.
I n terms of Accounting Standard (AS) 24 Discontinuing Operations, notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016, additional information with respect to transfer of the MMCM undertaking of the Company into HT Digital Streams Limited is as under:
13. Previous yearâs figures have been regrouped/reclassified to conform with current yearâs classification
Mar 31, 2015
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 ''Hindustan Times'', an English daily,
and ''Mint'', 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 ''Fever
104'' in cities of Delhi, Mumbai, Kolkata and Bangalore. The digital
business of the Company comprises of ''shine.com'' (job portal),
''hindustantimes.com'' (News Website) and ''livemint. com'' (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
Company''s 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 fnancial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
3. Contingent Liabilities
a) Income-tax authorities have raised additional demands for Rs. 761.08
Lacs for various financial years. The tax demands are mainly on account
of disallowances of expenses claimed by the company under the
Income-tax Act. The matters are pending before various authorities. The
Company is contesting the demands and the management believes that its
position will likely be upheld. No tax expenses have been accrued in
the financial statements for these tax demands.
b) Service-tax authorities have raised additional demands for Rs. 316.67
Lacs for various financial years. The matters are pending before
Service Tax Appellate Tribunal. The Company is contesting the demands
and the management believes that its position will likely be upheld. No
tax expenses have been accrued in the financial statements for these
tax demands.
c) During the year ended March 31, 2005, the Company acquired the
printing undertaking at New Delhi from The Hindustan Times Limited
(HTL). Ex-workmen of HTL challenged the transfer of business by way of
a writ in Hon''ble Delhi High Court, which was quashed on May 9, 2006.
Thereafter these workmen raised the industrial dispute before various
forums like Delhi Government, Industrial Tribunal-I, New Delhi
(Tribunal) and Delhi High Court.
The case was decided by way of award by Industrial Tribunal, on January
23, 2013, wherein the workmen were granted "relief of treating them in
continuity of services under terms and conditions of service as before
their alleged termination w.e.f. October 3, 2004. As per the award,
they will not be entitled to any notice pay or compensation u/s 25 FF
of Industrial Dispute Act. The said notice pay or compensation, if any,
received by them, will have to be refunded to the Company."
The said award after publication came into operation w.e.f. April 1,
2012. The Management issued several letter(s) to the workmen followed
by the public notice asking them to refund the notice pay and
retrenchment compensation so received, as directed by Industrial
Tribunal, however, there was no response from the workman.
The workman also filed the Execution Proceeding for Back wages on April
2, 2012, Execution Court vide its order dated October 8, 2012, held
that "No Back Wages" have been granted and decree in relation thereto
cannot be executed". The Execution Court vide its order dated January
04, 2013 directed the management to reinstate the workman without
insisting for refund of notice pay and retrenchment compensation The
said order of the Ld. Execution Court was challenged and pending
decision before High Court of Delhi. As HTL has no factory, the
management has offered a notional reinstatement w.e.f. April 18, 2013
and salary from April 18, 2013. The Petitioner informed the High Court
of Delhi in September, 2013 that since the management is currently
engaged in real estate management and investment, it can give fresh
non-industrial work to a maximum of 38 (thirty eight) workmen based on
seniority. It was also submitted that the petitioner company has no
work to offer except as stated above and will accordingly exercise its
rights and remedies as available under the Industrial Disputes Act,
1947 qua the remaining workmen. In terms of its submissions, the
management issued letter of posting to 38 workmen on December 4, 2013
and paid compensation under Section 25FFF of the Industrial Dispute
Act, 1947 to remaining 167 workmen on account of closure of printing
undertaking/factory long back. Final arguments were concluded and the
Judgment reserved by Delhi High Court on May 27, 2014, which is still
pending for judgment.
After the Petition of management, the workmen also filed Writ Petition
against the order of Ld. Execution Court dated October 08, 2012 denying
them back wages. The Single Bench of Delhi High Court pronounced the
judgment on November 17, 2014 in favour of the workmen that Back wage
are payable to them. The management challenged the said order before
Division Bench of Delhi High Court, which pronounced the judgment on
February 23, 2015, wherein it held that no back wages are granted to
the workmen vide award dated January 23, 2012. The workmen have
approached Supreme Court against the said order. The Supreme Court has
issued notice to HTL in the matter. The management is confident that
the outcome of the above matter would be in favour of the Company.
4 Segment Information
The primary segment reporting format is determined to be business
segments as the Company''s risks and rates of return are affected
predominantly by the differences in the products and services produced.
Secondary information is reported geographically. The operating
businesses are organised and managed separately according to the nature
of products and services provided, with each segment representing a
strategic business unit that offers different products.
Primary Segment
Business Segment
The Company is presently engaged in the business of Printing and
Publication of Newspapers & Periodicals , business of radio broadcast
and all other related activities through its Radio channels operating
under brand name ''Fever 104'' in India and business of providing
internet related services through a job portal Shine.com and a news
website hindustantimes.com. Accordingly the Company has organised its
operations into three major businesses: "Printing and Publishing of
Newspapers and Periodicals", "Radio Broadcast & Entertainment" and
"Digital".
Secondary Segment
Geographical Segments
The Company''s operations are mostly within India and do not have
operations in economic environments with different risks and returns.
Hence, it is considered operating in single geographical segment.
5. In terms of the Scheme of Arrangement and Restructuring u/s
391-394 read with Sections 100-104 of the Companies Act, 1956 between
the Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the Hon''ble Delhi High Court, the assets and
liabilities of the radio business of the Demerged company were taken
over as at January 1, 2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, is now amortized against the credit balance of Securities
Premium Account instead of changing to the statement of profit and
loss, over the useful life of the said licenses or their unexpired
period (whichever is lower) from date of Merger of Radio business as
per the approved Scheme. Consequently an amount of Rs. 765.42 lacs
(Previous Year Rs. 765.42 lacs) towards amortization of Radio Licences
has been debited to the Securities Premium Account.
6. Share Based Compensation
The Institute of Chartered Accountants of India has issued a Guidance
Note on Accounting for ''Employees Share-based Payments'', which is
applicable to employee share based payment plans. The scheme detailed
below is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the group company and the
parent company. To have an understanding of the scheme, relevant
disclosures are given below.
I As approved by the shareholders at their Extra-ordinary General
Meeting held on October 21, 2005, during an earlier year, the Company
has given interest-free loan of Rs. 2,174.28 lacs to HT Media Employee
Welfare Trust which in turn purchased 468,044 Equity Shares of Rs. 10/-
each of HT Media Limited (as on date equivalent to 2,340,220 Equity
Shares of Rs.2/- each) from the open market [average cost per share -
T92.91 based on Equity Share of Rs.2/- each], for the purpose of granting
Options under the ''HTML Employee Stock Option Scheme'' (the Scheme), to
eligible employees.
During the financial year 2007-08, the Scheme was modified to the
effect - (a) Options granted w.e.f. September 15, 2007 shall vest as
per previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of the
subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of
vesting period which are hereinafter referred to as ''Plan A'', ''Plan B''
(applicable to Options granted w.e.f. September 15, 2007) and Plan C
(applicable to Options granted w.e.f. October 8, 2009). Options granted
under both the plans are exercisable for a period of 10 years after the
scheduled vesting date of the last tranche of the Options as per the
Scheme.
Difference between employee compensation cost (calculated using the
fair value of stock options) and the employee compensation cost
(calculated on the intrinsic value of the options) is Rs.14.02 Lacs
(Credit) (Previous year credit of T46.68 Lacs) which will result into
profit of Rs.14.02 Lacs (Previous year profit of Rs. 46.68 Lacs).
III HT Media Limited has given loan of Rs. 242.70 lacs to "HT Group
Companies - Employee Stock Option Trust" which in turn has purchased
37,338 Equity Shares of Rs. 10/- each of Hindustan Media Venture Limited
(HMVL) - Subsidiary Company of HT media Limited, for the purpose of
granting Options under the ''HT Group Companies -Employee Stock Option
Scheme'' (the Scheme), to eligible employees of the group. On these
purchased shares, the trust has also received 238,964 shares out of the
bonus shares issued by the HMVL on February 21, 2010.
7. Commitments
Particulars 31 March 2015 31 March 2014
A. Capital Commitments
Estimated amount of contracts
remaining to be executed on capital
account and not provided for (net
of capital advances) 3,917.73 1,050.97
B. Other Commitments
Commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital
Goods (''EPCG'') Scheme for importing capital goods at a concessional
rate of customs duty against submission of bonds in September 2008.
Under the terms of the respective scheme, the Company is required to
export goods or/and services of FOB value equivalent to eight times the
duty saved in respect of licenses within eight years from the date of
issuance of license.
Accordingly, the Company is required to export goods and services of
FOB value of Rs. 20,016.89 lacs by September 18, 2016. The balance export
obligation left as on 31 March 2015 is Rs. 7,958.46 Lacs.
Commitment to Invest in Specific Funds
During the year ended 31 March 2015, the Company has invested in
''Tandem III, LP'' and ''Blume Ventures Fund 1A'', USD 10 Lacs and Rs.120
Lacs respectively.
Under the terms of respective agreements, the company is required to
further invest USD 40 Lacs in ''Tandem III, LP'' andRs.180 Lacs in ''Blume
Ventures Fund 1A''.
8. Interest in Joint Venture Company
During the year 2011-12, the Company had entered into an agreement with
Apollo Global Singapore Holdings Pte. Ltd., part of Apollo Group, Inc.
(U.S.A.), to participate in a 50:50 joint venture company which is
intended to provide high quality educational services and programs in
India. For this purpose, India Education Services Private Limited
(IESPL) was incorporated as a wholly-owned subsidiary on 24th October,
2011, which later became a 50:50 joint venture w.e.f. 21st December,
2011 in terms of the said agreement.
9. Leases
Rental expenses in respect of operating leases are recognized as an
expense in the statement of profit and loss, on a straight-line basis
over the lease term. Operating Lease (for assets taken on Lease)
a) The Company has taken various residential, office and godown
premises under operating lease agreements. These are generally
cancellable leases and are renewable by mutual consent on mutually
agreed terms with or without rental escalations.
b) Lease payments recognized for the year are Rs.3,881.99 lacs (Previous
year Rs.3,788.91 lacs) and are disclosed as Rent in note no. 27 of these
financial statements.
c) The future minimum lease payments under non-cancellable operating
leases
- Not later than one year is Rs.1,397.49 lacs (Previous year Rs.1,260.76
lacs);
- Later than one year but not later than fve years is Rs.2,171.77 lacs
(Previous year Rs.3,274.43 lacs);
- Later than fve years is Rs.319.42 lacs (Previous year Rs.217.66 lacs)
10. Capital Advances include Rs.100.94 lacs (Previous year Rs.100.94 lacs)
paid towards Company''s proportionate share for right to use in the
Common Infrastructure for channel transmission (for its four stations)
to be built on land owned by Prasar Bharti and to be used by all the
broadcasters at respective stations as per the terms of bid document on
FM Radio Broadcasting (Phase II).
11. In accordance with the opinion of Expert Advisory Committee (EAC)
of The Institute of Chartered Accountants of I"ndia'' (issued in the
month of March 2014), the Company has consolidated the financial
statements of HT Media Employee Welfare Trust ("Trust") in the
standalone financial statements of the Company. Accordingly, the amount
of loan of Rs.2,003.78 lacs (previous year Rs.2,109.78 lacs) outstanding in
the name of Trust in the books of the Company at the year end has been
eliminated against the amount of loan outstanding in the name of
Company appearing in the books of Trust at the year end. Further, the
investment of Rs.2,068.10 lacs (previous year Rs.2,158.25 lacs) made by the
Trust in the equity shares of the Company (through secondary market)
has been shown as deduction from the Share Capital to the extent of
face value of the shares [T44.57 lacs (previous year T46.51 lacs)] and
Securities Premium Account to the extent of amount exceeding face value
of equity shares [Rs.2,023.53 lacs (previous year Rs.2,111.74 lacs)].
Further, the amount of dividend of T9.30 lacs (previous year T9.30
lacs) received by the Trust from the Company during the year end has
been added back to the surplus in the statement of profit and loss.
12. Adjustment to the carrying value of investments in Ivy Talent
India Private Limited
During the year, Ivy Talent India Private Limited (a wholly owned
subsidiary), has made a provision of Rs.1,669.23 lacs towards permanent
decline in the value of investments held by it in MyParichay Services
Private Limited triggered by substantial decline in the scale of
operation of MyParichay Services Private Limited due to certain
permanent adverse business development. Consequently, a provision
amounting to Rs.1,669.23 lacs for diminution in value of investment made
by the Company in Ivy Talent India Private Limited has been accounted
for and disclosed as exceptional item in these financial statements.
13. Previous year''s figures have been regrouped/reclassified to
conform with current year''s classification
Mar 31, 2014
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 ''Hindustan Times'', an English daily,
and ''Mint'', 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 ''Fever
104'' in cities of Delhi, Mumbai, Kolkata and Bangalore. The digital
business of the Company comprises of ''shine. com'' (job portal),
''hindustantimes.com'' (News Website) and ''livemint.com'' (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
Company''s 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 notifed under the
Companies (Accounting Standards), Rules 2006, (as amended) and the
relevant provisions of the Companies Act, 1956, read with General
Circular 08/2014 dated April 4, 2014, issued by the Ministry of
Corporate Affairs (MCA) in respect of Section 133 of the Companies Act
2013 and relevant provisions of the Companies Act, 1956. 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.
3. CONTINGENT LIABILITIES
a. During the year ended March 31, 2005, the Company acquired the
printing undertaking at New Delhi from its holding company namely The
Hindustan Times Limited (HTL). Ex-workmen of HTL challenged the
transfer of business by way of a writ petition fled in Hon''ble Delhi
High Court, this petition was quashed by Hon''ble Delhi High Court on
May 9, 2006. Thereafter these workmen have raised the industrial
dispute before various forums like before Delhi Government, Industrial
Tribunal-I, Karkardooma Courts, New Delhi (Tribunal) and Hon''ble Delhi
High Court.
The case was decided by way of award by Industrial Tribunal, New Delhi
on January 23, 2013, wherein the workmen were granted "relief of
treating them in continuity of services under terms and conditions of
service as before their alleged termination w.e.f. October 3, 2004. As
per the award, they will not be entitled to any notice pay or
compensation u/s 25 FF of Industrial Dispute Act. The said notice pay
or compensation, if any, received by them, will have to be refunded to
the Company."
The said award was published as per letter dated March 2, 2012, and
came into operation w.e.f. April 1, 2012. The Management issued several
letter(s) to the workmen following the public notice asking them to
refund the notice pay and retrenchment compensation so received, as
directed by Industrial Tribunal, however, there was no response from
the workman.
The workman had also fled the Execution Proceeding for Back wages on
April 2, 2012, After several rounds of proceeding and submissions by
the both parties before the Ld. Execution Court, the Ld. Execution
Court vide its order dated October 8, 2012, held that "No Back Wages"
have been granted and decree in relation thereto cannot be executed.
However, the Ld. Execution Court recorded the willingness of the
management to reinstate the workmen, however, the management''s
statement regarding the extent it is capable of doing, there being no
factory, was not recorded. The Ld. Execution Court vide its order dated
January 04, 2013 directed the management to reinstate the workman
without insisting for refund of notice pay and retrenchment
compensation with further advice to the parties to get clarity on
refund of notice pay and retrenchment compensation from Industrial
Tribunal. The said order of the Ld. Execution Court has been
challenged and pending before Hon''ble High Court of Delhi. Though there
is no factory, the management has offered a notional reinstatement
w.e.f. April 18,2013 and salary for the period from April 18, 2013 to
April 30, 2013 due to notional reinstatement has been paid on May 7,
2013. After continuing the payment for some time, the Petitioner
informed the Hon''ble High Court of Delhi as recorded in order dated
September 25, 2013 that the management is currently engaged in real
estate management and investment, it can give option of fresh
non-industrial work to a maximum of 38 (thirty eight) workmen based on
seniority. It was also submitted that the petitioner company has no
work to offer except as stated above who will accordingly exercise its
rights and remedies as available under the Industrial Disputes Act,
1947 qua the remaining workmen. In terms of its submissions, the
management issued letter of posting to 38 workmen on December 4, 2013
and paid compensation under Section 25FFF of the Industrial Dispute
Act, 1947 to 167 workmen on account of closure of printing
undertaking/factory on July 4, 2008. The matter is partly heard and is
pending before Hon''ble High Court for final arguments and conclusion.
After the Petition of management, the workman has also fled Writ
Petition against the order of Ld. Execution Court dated October 08,
2012 denying them back wages. The management based on legal advice
obtained, is confdent that no back wages was ever granted to them by
Industrial tribunal and accordingly they are not entitled to any back
wages. The matter is now listed before Hon''ble High Court for final
arguments in July, 2014.
4. Segment Information Identifcation of Segments Primary Segment
Business Segment
The Company is presently engaged in the business of Printing and
Publication of Newspapers & Periodicals , business of radio broadcast
and all other related activities through its Radio channels operating
under brand name ''Fever 104'' in India and business of providing
internet related services through a job portal Shine.com and a news
website ht.com. Accordingly the Company has organized its operations
into three major businesses: "Printing and Publishing of Newspapers and
Periodicals", "Radio Broadcast & Entertainment" and "Digital".
Secondary Segment
Geographical Segments
The Company''s operations are mostly within India and do not have
operations in economic environments with different risks and returns.
Hence, it is considered operating in single geographical segment.
5. In terms of the Scheme of Arrangement and Restructuring u/s
391-394 read with Sections 100-104 of the Companies Act, 1956 between
the Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the Hon''ble Delhi High Court, the assets and
liabilities of the radio business of the Demerged company were taken
over as at January 1, 2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, is now amortized against the credit balance of Securities
Premium Account over the useful life of the said licenses or their
unexpired period (whichever is lower) from date of Merger of Radio
business as per the approved Scheme. Consequently an amount of Rs.765.42
lacs (Previous Year Rs.765.42 lacs) has been debited to the Securities
Premium Account in the current year.
6. Adjustment to the carrying value of investments in HT Digital
Media Holdings Limited
a) (i) A Scheme of Arrangement and Restructuring u/s 391-394 r/w
Sections 100-104 of the Companies Act, 1956 (the Scheme)
between the Company and Firefy e- Ventures Limited (FEVL, a subsidiary
Company) for, interalia, demerger of Job Portal Undertaking of FEVL
(shine.com) and transfer and vesting thereof into the Company w.e.f.
from April 1, 2012 (Appointed Date), was sanctioned by the Hon''ble
Delhi High Court on April 18, 2013. The financial impact of the Scheme
w.e.f. April 1, 2012, was considered in the financial statements of the
Company for the year ended March 31, 2013. Consequent to the scheme, 6
equity shares of Rs. 2/- each were allotted to the erstwhile shareholders
of FEVL on March 31, 2014 at a premium of Rs. 136/- per equity share.
(ii) Pursuant to the Scheme becoming effective, during the year ended
March 31, 2013, FEVL converted the Zero Coupon Compulsorily Convertible
Debentures of Rs.11,690 lacs issued by it to its holding company viz. HT
Digital Media Holdings Limited aggregating into 1,169,000,000 Equity
Shares of Rs.10 each fully paid up and paid up share capital post this
conversion became Rs. 17,190 lacs divided into 17,19,00,000 equity shares
of Rs.10 each fully paid. Paid up equity share capital of FEVL, after
taking into consideration of conversion of Zero Coupon Compulsorily
Convertible Debentures above, was reduced from Rs.17,190 lacs divided
into 17,19,00,000 equity shares of Rs.10 each fully paid to Rs.1,250 lacs
divided into 1,25,00,000 equity shares of Rs. 10 each by cancelling
15,94,00,000 equity shares of Rs.10 each without extinguishment or
reduction of liability on said shares and without any payment of the
cancelled value of the said shares to the shareholders of the FEVL
namely HT Digital Media Holdings Limited. This capital reduction in
books of FEVL resulted into diminution in value of investments held in
FEVL by HT Digital Media Holdings Limited of an equivalent amount of
Rs.15,940 lacs. HT Digital Media Holdings Limited as a result had written
off the investments held by it in FEVL by Rs. 15,940 lacs to refect the
above diminution during the year ended March 31, 2013.
(iii) The write-off of investment by HT Digital triggered a
corresponding provision for diminution in value of investments held by
the Company in HT Digital Media Holding Limited and a provision for
diminution in value of investments of Rs.15,940.00 lacs was recorded and
disclosed as exceptional item in financial statements of the Company for
the Year ended march 31, 2013.
b) Consequent to the Scheme referred in a) above, during the year, HT
Digital Media Holdings Limited had fled a petition with the Hon''ble
Delhi High Court u/s 100 to 105 of the Companies Act, 1956 for
reduction of its equity share capital by Rs.15,940 Lacs. The Petition was
approved by the Hon''ble Delhi High Court vide order dated February 26,
2014. Consequent upon the approval of above capital reduction, equity
share capital of HT Digital was reduced from Rs. 17,664 Lacs to Rs. 1,724
Lacs. Accordingly, the Company reduced its equity investment in HT
Digital from Rs. 17,664 Lacs to Rs. 1,724 Lacs by writing off the
investment by Rs. 15,940 Lacs. However, this has no impact on the
financial statements of the Company, as an amount to the extent of
capital reduction of Rs. 15,940 Lacs was already provided in the books of
accounts in FY 2012-13 and disclosed as an exceptional item. The table
below summarises the movement of Company''s Investments in the equity
shares of HT Digital Media Holdings Limited:
7. Share Based Compensation
The Institute of Chartered Accountants of India has issued a Guidance
Note on Accounting for ''Employees Share-based Payments'', which is
applicable to employee share based payment plans. The scheme detailed
below is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the group company and the
parent company. To have an understanding of the scheme, relevant
disclosures are given below.
I. As approved by the shareholders at their Extra-ordinary General
Meeting held on October 21, 2005, during an earlier year, the Company
has given interest-free loan of Rs.2,174.28 lacs to HT Media Employee
Welfare Trust which in turn purchased 468,044 Equity Shares of Rs.10/-
each of HT Media Limited (as on date equivalent to 2,340,220 Equity
Shares of Rs.2/- each) from the open market [average cost per share Â
Rs.92.91 based on Equity Share of Rs.2/- each], for the purpose of granting
Options under the ''HTML Employee Stock Option Scheme'' (the Scheme), to
eligible employees.
During the financial year 2007-08, the Scheme was modifed to the effect
 (a) Options granted w.e.f. September 15, 2007 shall vest as per
previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of the
subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of
vesting period which are hereinafter referred to as ''Plan A'', ''Plan B''
(applicable to Options granted w.e.f. September 15, 2007) and Plan C
(applicable to Options granted w.e.f. October 8, 2009). Options
granted under both the plans are exercisable for a period of 10 years
after the scheduled vesting date of the last tranche of the Options as
per the Scheme.
The relevant details of the Scheme are as under.
*Adjusted for face value of Rs.2/- after stock split
Note: Approvals obtained from the Board of Directors and Shareholder''s
of the Company for the ''Plan B'' were with retrospective effect from
September 15, 2007.
Difference between employee compensation cost (calculated using the
fair value of stock options) and the employee compensation cost
(calculated on the intrinsic value of the options) is Rs.46.68 lacs
(Credit) (Previous year credit of Rs.46.22 lacs) which will result into
profit of Rs.46.68 lacs (Previous year profit of Rs.46.22 lacs).
II. The subsidiary company, Firefy e-Ventures Private Limited has
given Employee Stock Options (ESOPs) to employees of HT Media Limited
(HTML).
A. Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of Firefy e-Ventures Limited at a fixed price within a Specific period of
time.
Weighted average fair value of the options outstanding of Plan B is
Rs.4.82 (Previous year Rs.Nil) per option.
Difference between employee compensation cost (calculated using the
fair value of stock options) and the employee compensation cost
(calculated on the intrinsic value of the options) is Rs.3.67 Lacs
(Previous Year Rs.19.39 lacs). However, these have not been charged back
to the company by the subsidiary company, hence not accounted for by
the Company.
III HT Media Limited has given loan of Rs.242.70 lacs to "HT Group
Companies  Employee Stock Option Trust" which in turn has purchased
37,338 Equity Shares of Rs.10/- each of Hindustan Media Venture Limited
(HMVL) Â Subsidiary Company of HT media Limited, for the purpose of
granting Options under the ''HT Group Companies ÂEmployee Stock Option
Scheme'' (the Scheme), to eligible employees of the group. On these
purchased shares, the trust has also received 238,964 shares out of the
bonus shares issued by the HMVL on February 21, 2010.
Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of the HMVL at a fixed price within a Specific period of time.
Options granted are exercisable for a period of 10 years after the
scheduled vesting date of last tranche as per the Scheme.
The Company has recognized an expense of Rs. Nil (Previous year Rs. Nil)
during the year for intrinsic value charge of ESOPs issued to it''s
employees under this Scheme.
Difference between employee compensation cost (calculated using the
fair value of stock options) and the employee compensation cost
(calculated on the intrinsic value of the options) is NIL (Previous
Year Rs.0.54 lacs).
IV. The subsidiary company, HT Mobile Solution Limited has given
Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of Firefy e-Ventures Limited at a fixed price within a Specific period of
time.
Weighted average fair value of the options outstanding is Rs.4.74 per
option.
Difference between employee compensation cost (calculated using the
fair value of stock options) and the employee compensation cost
(calculated on the intrinsic value of the options) is Rs.1.72 Lacs
(Previous Year Rs.Nil ). However, these have not been charged back to the
company by the subsidiary company, hence not accounted for by the
Company.
Had the fair value method been used for accounting in all schemes above
, the profit would have been higher by Rs.41 lacs (Previous year Rs.26.00
lacs) and adjusted basic and diluted EPS would have been Rs.6.68
(Previous year Rs.1.04) per share.
8. Gratuity (Post Employment benefit plan)
The Company has a Defined benefit gratuity plan. Every employee who has
completed five years or more of services gets a gratuity on separation
at 15 days salary (last drawn salary) for each completed year of
service. The Company has formed a Gratuity Trust to which contribution
is made based on actuarial valuation done by independent valuer.
The following table summarizes the components of net benefit expenses
recognized in the profit and Loss Account and the funded status and
amount recognized in the Balance Sheet for respective plans:
The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the year over
which the obligation is to be settled.
The estimates of future salary increases, considered in actuarial
valuation, take account of infation, seniority, promotion and other
relevant factors on long term basis. The Company expects to contribute
Rs.398.97 lacs (Previous year Rs. 323.08 Lacs) to gratuity fund during the
year 2014-15
9. Interest in Joint Venture Company.
a) During the year 2011-12, the Company had entered into an agreement
with Apollo Global Singapore Holdings Pte. Ltd., part of Apollo Group,
Inc. (U.S.A.), to participate in a 50:50 joint venture company which is
intended to provide high quality educational services and programs in
India. For this purpose, India Education Services Private Limited
(IESPL) was incorporated as a wholly-owned subsidiary on October 24,
2011, which later became a 50:50 joint venture w.e.f. December 21, 2011
in terms of the said agreement.
The Company''s share of the assets, liabilities, income and expenses of
the jointly controlled entity as at and for the year ended March 31,
2014 and March 31, 2013 are as follows-
10. Names of Related Parties
Parties having direct or indirect control over the Company (Holding
Company) : The Hindustan Times Limited
Subsidiaries :
Hindustan Media Ventures Limited
HT Music and Entertainment Company Limited
Firefy e- Ventures Limited
HT Digital Media Holdings Limited
HT Burda Media Limited (ceased to be a subsidiary w.e.f. 30.09.2013)
HT Mobile Solutions Limited
HT Overseas Pte. Limited
HT Education Limited
HT Learning Centers Limited
HT Global Education
ED World Private Limited (formerly Peacock Education Services Private
Ltd)
Ivy Talent India Private Limited (W.e.f. 9-11-2012)
Topmovies Entertainment Limited (w.e.f 24-05-2013)
Fellow Subsidiaries
(whether transactions with them have occurred or not) :
HT Interactive Media Properties Limited
Go4i.com (Mauritius) Limited
Go4i.com (India) Private Limited
HT Films Limited White Tide Amusement Limited
Group companies where common control exists (whether transactions with
them have occurred or not) :
Paxton Trexim Private Limited
Duke Commerce Limited
Joint Venture : India Education Services Private Limited
Associate : MyParichay Services Private Limited
Key Management Personnel :
Shobhana Bhartia (Chairperson& Editorial Director)
Priyavrat Bhartia (Whole-time Director)
Shamit Bhartia (Whole-time Director)
Rajiv Verma (Whole-time Director and Chief Executive officer)
Enterprises owned or significantly infuenced by Key Management Personnel
or their relatives (whether transactions with them have occurred or
not) * For sake of brevity, companies which are already considered
above have not been included here :
Jubilant Food Works Limited
Goldmerry Investment & Trading Company Limited
Earthstone Holding Private Limited*
Earthstone Holding (One) Private Limited
Earthstone Holding (Two) Private Limited*
Earthstone Holding (Three) Private Limited*
Earthstone Holding Overseas Private Limited
Shine Foundation (section 25 company)
Priyavrat Traders*
Billigiri Rangan Coffee Estate*
Kumaon Orchards*
Shobhana Print Media LLP
Shobhana Communications LLP
PSB Trustee Company Private Limited
SB Trusteeship Services Private Limited
Shobhana Trustee Company Private Limited
SSB Trustee Company Private Limited
*Relationship ceased during the year.
11. Leases
Rental expenses in respect of operating leases are recognized as an
expense in the statement of profit and loss, on a straight-line basis
over the lease term.
Operating Lease (for assets taken on Lease)
a) The Company has taken various residential, office and godown premises
under operating lease agreements. These are generally cancellable
leases and are renewable by mutual consent on mutually agreed terms
with or without rental escalations.
b) Lease payments recognized for the year are Rs.3788.91 lacs (Previous
year Rs.3,212.78 lacs) and are disclosed as Rent in note no. 27 of these
financial statements.
c) The future minimum lease payments under non-cancellable operating
leases
- Not later than one year is Rs.1,260.76 lacs (Previous year Rs.714.71
lacs);
- Later than one year but not later than five years is Rs.3,274.43 lacs
(Previous year Rs.2,606.69 lacs);
- Later than five years is Rs.217.66 lacs (Previous year Rs.216.82 lacs)
12. Capital Advances include Rs.100.94 lacs (Previous year Rs.100.94 lacs)
paid towards Company''s proportionate share for right to use in the
Common Infrastructure for channel transmission (for its four stations)
to be built on land owned by Prasar Bharti and to be used by all the
broadcasters at respective stations as per the terms of bid document on
FM Radio Broadcasting (Phase II).
13. During the previous year, the Board of Directors of the Company
had accorded it''s ''in-principle'' approval to sale of the Company''s 51%
equity shareholding in its subsidiary HT Burda Media Limited to Burda
Druck GmbH or it''s nominee for an aggregate consideration of Rs.6,000.00
lacs, subject to the customary adjustments at the time of closing of
transaction. Accordingly, during the year, the Company sold its holding
of 5,15,09,990 equity shares of Rs.10/- each of HT Burda Media Limited
(subsidiary company) to Burda Druck GmbH for an aggregate consideration
of Rs.6,000 lacs. The profit on sale of this investment (net of expenses)
of Rs.841 lacs has been disclosed in note 23 of these financial statements
under Other Income.
14. During the year, In order to achieve minimum 25% public
shareholding in Hindustan Media Ventures Limited (Subsidiary Company)
as set out in second proviso to Rule 19(2)(b)(ii) of the Securities
Contracts (Regulation) Rules, 1957, on July 11, 2013, the Company (as
Promoter of Hindustan Media Ventures Limited) sold 19,39,027 equity
shares of HMVL (constituting 2.64% of its paid-up equity capital) in
the secondary market, by way of ''Offer for Sale of Shares through the
Stock Exchange Mechanism'', for an aggregate net consideration of Rs.2,312
lacs. The profit on sale of this investment of Rs.2,117 lacs has been
disclosed in note 23 of these financial statements under Other Income.
Consequently, the Companies holding in Hindustan Media Ventures Limited
has reduced to 5,45,33,458 (74.30%) equity shares of Rs. 10/- each.
15. In accordance with the recent opinion of Expert Advisory Committee
(EAC) of ''The Institute of Chartered Accountants of India'' (issued in
the month of March 2014), the Company has during the year, consolidated
the financial statements of HT Media Employee Welfare Trust ("Trust") in
the standalone financial statements of the Company. Accordingly, the
amount of loan of Rs. 2,109.78 lacs outstanding in the name of Trust in
the books of the Company at the year end has been eliminated against
the amount of loan outstanding in the name of Company appearing in the
books of Trust at the year end. Further, the investment of Rs.2,158.25
lacs made by the Trust in the equity shares of the Company (through
secondary market) has been shown as deduction from the Share Capital to
the extent of face value of the shares (Rs. 46.51 lacs) and Securities
Premium Account to the extent of amount exceeding face value of equity
shares (Rs. 2, 111.74 lacs). Further, the amount of dividend of Rs. 9.30
lacs received by the Trust from the Company till the year end has been
added back to the surplus in the statement of profit and loss.
Mar 31, 2013
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.
It''s share are listed on the National stock exchange and Bombay stock
exchange. The Company publishes ''Hindustan Times'', an English
daily, and ''Mint'', 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 ''Fever 104'' in cities of Delhi, Mumbai, Kolkata and Bangalore.
The digital business of the Company comprises of ''shine.com'' (job
portal merged with the Company w.e.f., April 1, 2012 as detailed in
note 34 below), ''hindustantimes.com'' (News Website) and
''livemint.com'' (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
Company''s 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 aspects with the Accounting Standards notified
under the Companies (Accounting Standards), Rules 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. 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.
3. Contingent Liabilities
a. During the year ended March 31, 2005, the Company acquired the
printing undertaking at New Delhi from its holding company namely The
Hindustan Times Limited (HTL). Ex-workmen of HTL challenged the
transfer of business by way of a writ petition filed in Hon''ble Delhi
High Court, this petition was quashed by Hon''ble Delhi High Court on
May 9, 2006. Thereafter these workmen have raised the industrial
dispute before various forums like before Delhi Government, Industrial
Tribunal-I, Karkardooma Courts, New Delhi (Tribunal) and Hon''ble
Delhi High Court
The case was decided by way of award by Industrial Tribunal, New Delhi
on 23.01.2013, wherein the workmen were granted "relief of treating
them in continuity of services under terms and conditions of service as
before their alleged termination w.e.f. 03.10.04. As per the award,
they will not be entitled to any notice pay or compensation u/s 25 FF
of Industrial Dispute Act. The said notice pay or compensation, if any,
received by them, will have to be refunded to the Company."
The said award was published as per letter dated March 2, 2012, and
came into operation w.e.f. April 1, 2012. The Management issued several
letter(s) to the workmen following the public notice asking them to
refund the notice pay and retrenchment compensation so received, as
directed by Industrial Tribunal, however, there was no response from
the workman.
The workman had also filed the Execution Proceeding for Back wages on
April 2, 2012, After several rounds of proceeding and submissions by
the both parties before the Ld. Execution Court, the Ld. Execution
Court vide its order dated 08.10.2012, held that "No Back Wages"
have been granted and decree in relation thereto cannot be executed.
However, the Ld. Execution Court recorded the willingness of the
management to reinstate the workmen, however, the management''s
statement regarding the extent it is capable of doing, there being no
factory, was not recorded. The Ld. Execution Court vide its order dated
January 04, 2013 directed the management to reinstate the workman
without insisting for refund of notice pay and retrenchment
compensation with further advice to the parties to get clarity on
refund of notice pay and retrenchment compensation from Industrial
Tribunal. The said order of the Ld. Execution Court has been
challenged and pending before Hon''ble High Court of Delhi. Though
there is no factory,, the management has offered a notional
reinstatement w.e.f. April 18,2013 and salary for the period from April
18, 2013 to April 30, 2013 due to notional reinstatement has been paid
on May 7, 2013.
After the Petition of management, the workman has also filed Writ
Petition against the order of Ld. Execution Court dated October 08,
2012 denying them back wages. The management based on legal advice
obtained, is confident that no back wages was ever granted to them by
Industrial tribunal and accordingly they are not entitled to any back
wages.
b. Guarantee issued by the Company to Bank against line of credit
sanctioned to Hi Burda Media Limited, a subsidiary, Rs.3,500 Lac
(Previous year Rs.3,500 Lac)
Guarantee issued by Company''s bankers on behalf of Hi Burda Media
Limited, a subsidiary, to third parties Rs.Nil (Previous year Rs.18.00
Lac)
4. SEGMENT INFORMATION
Identification of Segments Primary Segment Business Segment the Company
is presently engaged in the business of Printing and Publication of
Newspapers & Periodicals , business of radio broadcast and all other
related activities through its Radio channels operating under brand
name ''Fever 104'' in India and business of providing internet
related services through a job portal Shine.com and a news website
ht.com. Accordingly the Company has organised its operations into three
major businesses: "Printing and Publishing of Newspapers and
Periodicals", "Radio Broadcast & Entertainment" and
"Digital".
Secondary Segment Geographical Segments
The Company''s operations are mostly within India and do not have
operations in economic environments with different risks and returns.
Hence, it is considered operating in single geographical segment.
5. In terms of the Scheme of Arrangement and Restructuring u/s
391-394 read with Sections 100-104 of the Companies Act, 1956 between
the Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the Hon''ble Delhi High Court, the assets and
liabilities of the radio business of the Demerged company were taken
over as at |anuary 1, 2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, is now amortized against the credit balance of Securities
Premium Account over the useful life of the said licenses or their
unexpired period (whichever is lower) from date of Merger of Radio
business as per the approved Scheme. Consequently an amount of
Rs.765.42 Lac (Previous Year Rs.767.52 Lac) has been debited to the
Securities Premium Account in the current year.
6. (A) MERGER OF JOB PORTAL BUSINESS
The Board of Directors of the company ("Resulting company ") and
Firefly e-Ventures Limited (FEVL) ("Demerged company"), (FEVL is a
step down subsidiary of the company through company''s wholly owned
subsidiary HT Digital Media Holdings Limited ), had during the previous
year accorded an ''in-principle'' approval to a Scheme of Arrangement
and Restructuring u/s 391-394 read with sections 100-104 of the
Companies Act, 1956 (herein referred to as "the Scheme"). The
Scheme, inter-alia, provided for demerger of |ob Portal undertaking of
FEVL and transfer and vesting thereof into the Company, w.e.f. from
April 1, 2012 (the Appointed Date).
The Scheme was approved by the Equity Shareholders, Secured and
Unsecured Creditors of the two Companies, at their respective meetings
held on July 14, 2012 in terms of the Order made on May 30, 2012 by the
Hon''ble Delhi High court. The Scheme has been sanctioned by the
Hon''ble Delhi High Court on April 18, 2013 and became effective from
May 6, 2013 on its filing with Registrar of companies, NcT and Haryana.
With the scheme becoming effective from the appointed date i.e., w.e.f.
April 1, 2012, the assets and liabilities, rights and obligation of
FEVL relatable to Job Portal Undertaking have been vested with the
Company. The Scheme has, accordingly, been given effect to in these
financial statements
The impact in financial statements of the Company for the year ended
March 31, 2013 is as below:
a) The Company recorded the assets and liabilities of the Job Portal
Undertaking vested in it pursuant to this Scheme, at the respective
book values thereof, as appearing in the books of FEVL on the day
immediately preceding the Appointed Date. Deficit in the value of net
assets of Job Portal Undertaking transferred to the Company pursuant to
the Scheme over the fair value of the New Equity Shares to be allotted
by Company has been adjusted first against balance of Securities
Premium Account, to the extent of Share Premium to be created pursuant
to Scheme and the remaining amount has been adjusted against the
Capital Reserve.
b) In terms of Scheme, no shares shall be issued to the holding company
of FEVL namely HT Digital Media Holding Company Limited, being a
subsidiary of the Company.
c) The income and expenses of Job Portal Undertaking w.e.f. April 1,
2012 have been recorded as income and expenses of the Company and
following numbers relatable to Job Portal Undertaking have been
included in Statement of Profit and Loss of the Company for the year
ended March, 31, 2013:
d) Pursuant to the Scheme becoming effective, the carry forward
business loss of Rs.15,698.63 Lac as per Income-tax Act relatable to
Job Portal Undertaking is available with the Company. The tax loss so
transferred has been considered for the purpose of computation of
current tax provision for the current year. This has made the current
tax payable under normal tax provisions to be nil and therefore
provision for tax is created under the provisions of Minimum Alternate
Tax (MAT). The company has accounted for deferred tax assets of
Rs.522.79 Lac on unabsorbed business losses. The Company is confident
that subsequent realisation of the deferred tax assets created is
virtually certain in the near future based on profit earned during the
financial year 2013-14 so far.
e) the Company has recognized Rs.3,773.00 Lac on March 31, 2013 as
Minimum Alternate tax (MAi) credit entitlement, which represents that
portion of the MAT Liability, the credit of which would be available
based on the provisions of Section 115 JAA of the Income tax Act, 1961.
the Management based on the future profitability projections is
confident that there would be sufficient taxable profit in future which
will enable the Company to utilize the above MAT credit entitlement.
(B) Adjustment to the carrying value of investments in HT Digital Media
Holdings Limited
Pursuant to the Scheme becoming effective: (i) FEVL converted the Zero
Coupon Compulsorily Convertible Debentures of Rs.11,690 Lac issued by
it to its holding company viz. HT Digital Media Holdings Limited
aggregating into 11,69,00,000 Equity Shares of Rs.10 each fully paid up
and paid share capital post this conversion became Rs.17,190 Lac
divided into 17,19,00,000 equity shares of Rs.10 each fully paid (ii)
Paid up equity share capital of FEVL, after taking into consideration
of conversion of Zero Coupon Compulsorily Convertible Debentures of
above, has been reduced from Rs.17,190 Lac divided into 17,19,00,000
equity shares of Rs.10 each fully paid to Rs.1,250 Lac divided into
1,25,00,000 equity shares of Rs.10 each by cancelling 15,94,00,000
equity shares of Rs.10 each without extinguishment or reduction of
liability on said shares and without any payment of the cancelled value
of the said shares to the shareholders of the FEVL namely HT Digital
Media Holdings Limited. This capital reduction in books of FEVL has led
to diminution in value of investments held in FEVL by HT Digital Media
Holdings Limited of an equivalent amount of Rs.15,940 Lac. Ht Digital
Media Holdings Limited as a result has written off the investments held
by it in FEVL by Rs.15,940 Lac to reflect the above diminution.
The write-off of investment by HT Digital has triggered a corresponding
provision for diminution in value of investments held by the Company in
HT Digital Media Holding Limited and a provision for diminution in
value of investments of Rs.15,940.00 Lac has been recorded and
disclosed as exceptional item in financial statements of the Company.
7. SHARE BASED COMPENSATION
The Institute of Chartered Accountants of India has issued a Guidance
Note on Accounting for ''Employees Share-based Payments'', which is
applicable to employee share based payment plans. the scheme detailed
below is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the group company and the
parent company. To have an understanding of the scheme, relevant
disclosures are given below.
I. As approved by the shareholders at their Extra-ordinary General
Meeting held on October 21, 2005, during an earlier year, the Company
has given interest-free loan of Rs.2,174.28 Lac to HT Media Employee
Welfare Trust which in turn purchased 468,044 Equity Shares of Rs.10/-
each of HT Media Limited (as on date equivalent to 2,340,220 Equity
Shares of Rs.2/- each) from the open market [average cost per share -
Rs.92.91 based on Equity Share of Rs.2/- each], for the purpose of
granting Options under the ''HTML Employee Stock Option Scheme'' (the
Scheme), to eligible employees.
During the financial year 2007-08, the Scheme was modified to the
effect - (a) Options granted w.e.f. September 15, 2007 shall vest as
per previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of the
subsidiary companies.
The Options granted under the Scheme shall vest as per the Schedules of
vesting period which are hereinafter referred to as ''Plan A'',
''Plan B'' (applicable to Options granted w.e.f. September 15, 2007)
and Plan C (applicable to Options granted w.e.f. October 8, 2009).
Options granted under both the plans are exercisable for a period of 10
years after the scheduled vesting date of the last tranche of the
Options as per the Scheme.
8. GRATUITY (POST EMPLOYMENT BENEFIT PLAN)
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of services gets a gratuity on separation
at 15 days salary (last drawn salary) for each completed year of
service. The Company has formed a Gratuity Trust to which contribution
is made based on actuarial valuation done by independent valuer.
The following table summarizes the components of net benefit expenses
recognized in the Statement of Profit and Loss and the funded status
and amount recognized in the Balance Sheet for respective plans:
9. INTEREST IN JOINT VENTURE COMPANY
a) During the year 2011-12, the Company had entered into an agreement
with Apollo Global Singapore Holdings Pte. Ltd., part of Apollo Group,
Inc. (U.S.A.), to participate in a 50:50 joint venture company which is
intended to provide high quality educational services and programs in
India. For this purpose, India Education Services Private Limited
(IESPL) was incorporated as a wholly-owned subsidiary on 24th October,
2011, which later became a 50:50 joint venture w.e.f. 21st December,
2011 in terms of the said agreement.
The Company''s share of the assets, liabilities, income and expenses
of the jointly controlled entity as at and for the year ended March 31,
2013 and March 31, 2012 are as follows-
10. LEASES
Rental expenses in respect of operating leases are recognized as an
expense in the statement of profit and loss, on a straight-line basis
over the lease term.
Operating Lease (for assets taken on Lease)
a) The Company has taken various residential, office and godown
premises under operating lease agreements. These are generally
cancellable leases and are renewable by mutual consent on mutually
agreed terms with or without rental escalations.
b) Lease payments recognized for the year are Rs.3,212.78 Lac (Previous
year Rs.2,876.02 Lac) and are disclosed as Rent in note no. 27 of these
financial statements.
c) the future minimum lease payments under non-cancellable operating
leases
- Not later than one year is Rs.714.71 Lac (Previous year Rs.435.55
Lac);
- Later than one year but not later than five years is Rs.2,606.69
Lac (Previous year Rs.1,694.06 Lac);
- Later than five years is Rs.216.82 Lac (Previous year Rs.18.15
Lac).
11. Capital Advances include Rs.100.94 Lac (Previous year Rs.100.94
Lac) paid towards company''s proportionate share for right to use in
the common Infrastructure for channel transmission (for its four
stations) to be built on land owned by Prasar Bharti and to be used by
all the broadcasters at respective stations as per the terms of bid
document on FM Radio Broadcasting (Phase II).
12. The Board of Directors of the Company has accorded it''s
''in-principle'' approval to sale of the Company''s entire 51%
equity shareholding in it''s subsidiary HT Burda Media Limited to
Burda Druck GmbH or it''s nominee for an aggregate consideration of
Rs.6,000.00 Lac, subject to the customary adjustments at the time of
closing of transaction. Accordingly, the investment in HT Burda Media
Limited has been classified as Current Investment.
13. Previous year''s figures have been regrouped/reclassified to
conform with current year''s classification.
Mar 31, 2012
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. It's
share are listed on the National Stock Exchange and Bombay Stock
Exchange. The Company publishes 'Hindustan Times', an English daily,
and 'Mint', 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
'Fever 104' in cities of Delhi, Mumbai, Kolkata and Bangalore.
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,
'hindustantimes.com' and 'livemint.com'.
2. Basis of preparation
The financial statements of the company have been prepared in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material aspects with the Accounting Standards notified
under the Companies (Accounting Standards),Rules 2006, (as amended) and
the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention except in case of assets for which provision
for impairment is made and revaluation is carried out.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below:
(a) 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 dividend 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 2012, the amount of per share dividend
recognized as distribution to equity shareholders is Rs.0.40 (Previous
year Rs.0.36).
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.
1. Term loan from HDFC bank carries interest @ PLR minus 7.75% p.a.
(Rate of Interest was linked to PLR for the first 2 years from the date
of first 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 first
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 first 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 installments of USD
5,155,670 each , after 4 years from the date of first 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 first drawdown. The
loan is secured by way of first 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.
1. Overdraft facility from Deutsche Bank is secured by way of pledge
on the Company's investment in the Mutual Fund Units of FMPs (Kotak FMP
Series 58, L&T FMP IV, Tata FMP 38A, BSL FMP Series DP, HDFC FMP 24M
Sep, ICICI Pru FMP Series 58, Reliance FMP XIX Series 20, Reliance FMP
XX Series 31, IDFC FMP 2yS1, Reliance FMP XX Series 32, Reliance FMP XX
Series 33, Tata FMP 38B, ICICI Pru FMP Series 57, IDFC FMP 3ys5, DWS
FMP Series 91, Kotak FMP Series 55)
2. Buyer's 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, 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.
3. Buyer's credit from Royal Bank of Scotland is secured by way of
first pari-passu charge over current asstes with other banks in
multiple banking arrangements of the Company.
3. Contingent Liabilities
a. During the year ended March 31, 2005, the Company acquired the
printing undertaking at New Delhi from its holding company namely The
Hindustan Times Limited (HTL). The writ petition filed by the ex Ã
workmen of HTL challenging the transfer of business was quashed by the
Hon'ble Delhi High Court on May 9, 2006. Thereafter, the ex-workmen of
HTL raised the industrial dispute before Delhi Government, who referred
the dispute to Industrial Tribunal-I, Karkardooma Courts, New Delhi
(Tribunal). During the course of the proceedings before Tribunal, the
ex-workmen moved application for interim relief. The Tribunal vide its
order dated March 8, 2007, granted interim relief to the ex-workmen of
HTL to the extent of 50% of last drawn wages from the date of such
order till the disposal of the matter
However, HTL challenged the said order before Honble Delhi High Court
in a Writ Petition, wherein the Hon'ble Court modified the order of the
Tribunal to the extent that the amount equivalent to 50% so received by
ex-workmen will be set off against their retrenchment compensation (not
encashed by the above ex-workmen till date), in the event of HTL
succeeding in the writ petition. The Honble Court further clarified
that payment will be made only from date of the High Court order (i.e.
March 23, 2007) till the disposal of writ petition and it further
stayed the order and proceedings pending before the Tribunal.
The said writ stands disposed of by Delhi High Court vide order dated
16.01.2009 by holding that it was agreed between the parties to make
the payment to ex-workmen till the amount of their Retrenchment
Compensation is exhausted. The stay on the proceedings before the
Industrial Tribunal was also vacated by Hon'ble Delhi High Court and
accordingly proceedings before the Industrial Tribunal has re- started.
The matter after final arguments stands disposed by the Industrial
Tribunal. The Tribunal has granted reinstatement to all the workers
with continuity of services w.e.f. 03.10.2004 in The Hindustan Times
Limited subject to workers refunding the Retrenchment Compensation
received by them. No relief has been granted against the Company by the
Tribunal.
In the meanwhile the workmen in question in the said Writ Petition has
filed contempt petition against The Hindustan Times Limited and its
Directors and same stands dismissed by Hon able High Court on 16th
March 2012.
b. Guarantee issued by the Company to Bank against line of credit
sanctioned to HT Burda Media Limited, a subsidiary, Rs.3,500 lacs
(Previous year Rs.3,500 lacs)
c. Guarantee issued by Company's bankers on behalf of HT Burda Media
Limited, a subsidiary, to third parties Rs.18.00 lacs (Previous year
Rs.51.01 lacs)
d. Income tax department has raised a demand of Rs.2.36 lacs (Previous
year Rs.2.36 lacs) for the Assessment Year 2004-05 in respect of penalty
levied in the assessment proceedings by Assessing Officer. The Company
has filed an appeal against the order of the Assessing Officer to
Commissioner of Income Tax (Appeals). The Commissioner of Income Tax
(Appeals) has upheld the levy of penalty. The Company has filed an
appeal against the order of the Commissioner of Income Tax (Appeals) to
Income Tax Appellate Tribunal. The Company has based on legal advice
obtained is confident of winning the above case and is of view that no
provision is required
4. Segment Information
Identification of Segments Primary Segment
Business Segment
The Company is presently engaged in the business of Printing and
Publication of Newspapers & Periodicals and in the business of radio
broadcast and all other related activities through its Radio channels
operating under brand name 'Fever 104' in India. Accordingly the
Company has organised its operations into two major businesses:
"Printing and Publishing of Newspapers and Periodicals" and
"Radio Broadcast & Entertainment".
Secondary Segment
Geographical Segments
The Company's operations are mostly within India and do not have
operations in economic environments with different risks and returns.
Hence, it is considered operating in single geographical segment.
5. In terms of the Scheme of Arrangement and Restructuring u/s
391-394 read with Sections 100-104 of the Companies Act, 1956 between
the Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the Hon'ble Delhi High Court, the assets and
liabilities of the radio business of the Demerged company were taken
over as at January 1, 2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, is now amortized against the credit balance of Securities
Premium Account over the useful life of the said licenses or their
unexpired period (whichever is lower) from date of Merger of Radio
business as per the approved Scheme. Consequently an amount of Rs.767.52
lacs (Previous Year Rs.765.44 lacs) has been debited to the Securities
Premium Account in the current year.
6. The Company has till date invested Rs.5,500 lacs in Firefly
e-Ventures Limited through its wholly owned subsidiary company HT
Digital Media Holdings Limited (formerly known as Hindustan Media
Limited) by way of Equity Share Capital. Firefly is engaged in the
internet related business like Job portals, Social Networking, etc.
Firefly is presently operating three websites [businesses] in the name
of Shine.com, HT Campus.com and Desimartini. com.
Firefly has been presently incurring losses and the accumulated losses
as at March 31, 2012 are Rs.12,122.81 lacs (Previous year Rs.9,519.67
lacs). The Company, however, is of the view that the nature of business
of Firefly being such, the losses were expected in the initial years
and that based on future projections prepared by Firefly for next five
years expects to generate sufficient income which will enable it to
offset the entire amount of accumulated losses incurred up to date. In
view of this, no impairment provision is considered against this
investment.
During the year a Scheme of Arrangement and Restructuring u/s 391-394
read with Sections 100-104 of the Companies Act, 1956, between Firefly
e-Ventures Limited (Firefly), and parent company, has filed with Honble
Delhi High Court which provides for demerger of Job Portal undertaking
of Firefly and transfer and vesting thereof into the Parent Company
w.e.f from the Appointed Date i.e. April 1, 2012. The Scheme was
approved by Committee of Board of Directors of Parent Company on 19th
March, 2012, subject to requisite approval(s) and sanctioned by the
Hon'ble Delhi High Court.
Since the Scheme is awaiting sanction by the Honble Delhi High Court,
therefore the impact of the Scheme has not been taken in the Standalone
Financial Statements of the Parent Company or Firefly for the year
ended March 31, 2012.
In the past, a similar scheme was approved by the requisite majority of
shareholders and creditors of both the Companies, which was withdrawn
with the leave of the Hon'ble Delhi High Court
7. Share Based Compensation
The Institute of Chartered Accountants of India has issued a Guidance
Note on Accounting for 'Employees Share-based Payments', which is
applicable to employee share based payment plans. The scheme detailed
below is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the group company and parent
company. To have an understanding of the scheme, relevant disclosures
are given below.
I. As approved by the shareholders at their Extra- ordinary General
Meeting held on October 21, 2005, during an earlier year, the Company
has given interest- free loan of Rs.2,174.28 lacs to HT Media Employee
Welfare Trust which in turn purchased 468,044 Equity Shares of Rs.10/-
each of HT Media Limited (as on date equivalent to 2,340,220 Equity
Shares of Rs.2/- each) from the open market [average cost per share Ã
Rs.92.91 based on Equity Share of Rs.2/- each], for the purpose of granting
Options under the 'HTML Employee Stock Option Scheme' (the Scheme),
to eligible employees.
During the financial year 2007-08, the Scheme was modified to the
effect à (a) Options granted w.e.f. September 15, 2007 shall vest as
per previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of the
subsidiary companies
The Options granted under the Scheme shall vest as per the Schedules of
vesting period which are hereinafter referred to as 'Plan A', 'Plan
B' (applicable to Options granted w.e.f. September 15, 2007) and Plan C
(applicable to Options granted w.e.f. October 8, 2009). Options granted
under both the plans are exercisable for a period of 10 years after the
scheduled vesting date of the last tranche of the Options as per the
Scheme.
The weighted average fair value of stock options granted during the
Previous year was Rs.113.70. The Black Scholes valuation model has been
used for computing the weighted average fair value considering the
following inputs
II. The subsidiary company, Firefly e-Ventures Limited has given
Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of Firefly e-Ventures Limited at a fixed price within a specific period
of time.
III HT Media Limited has given loan of Rs.242.70 lacs to "HT Group
Companies à Employee Stock Option Trust" which in turn has
purchased 37,338 Equity Shares of Rs.10/- each of Hindustan Media
Ventures Limited (HMVL) Ã Subsidiary Company of HT Media Limited, for
the purpose of granting Options under the 'HT Group Companies
ÃEmployee Stock Option Scheme' (the Scheme), to eligible employees of
the group. On these purchased shares, the trust has also received
238,964 shares out of the bonus shares issued by the HMVL on February
21, 2010.
Options granted are exercisable for a period of 10 years after the
scheduled vesting date of last tranche as per the Scheme
The Company has recognized an expense of Rs.102.15 lacs (Previous year
Rs.Nil) during the year for intrinsic value charge of ESOPs issued to
it's employees under this Scheme.
Difference between employee compensation cost (calculated using the
intrinsic value of stock options) and the employee compensation cost
(calculated on the fair value of the options) is Rs.27.02 lacs (Previous
Year Rs.5.34 lacs).
Had the fair value method been used for accounting in all the schemes
above , the profit would have been lower by Rs.189.57 lacs (Previous year
Rs.290.97 lacs) and adjusted basic and diluted EPS would have been Rs.6.71
(Previous year Rs.7.44 per share)
8. Gratuity (Post Employment Benefit plan)
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of services gets a gratuity on separation
at 15 days salary (last drawn salary) for each completed year of
service. The Company has formed a Gratuity Trust to which contribution
is made based on actuarial valuation done by independent valuer.
The following table summarizes the components of net benefit expenses
recognized in the Profit and Loss Account and the funded status and
amount recognized in the Balance Sheet for respective plans:
The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the year over
which the obligation is to be settled.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors on long term basis. The Company expects to contribute
Rs.213.10 lacs (Previous year Rs.233.53 Lacs) to gratuity fund during the
year 2012-13
Disclosure of the amount required by paragraph 120(n) of AS-15 for the
year 2007-08 is not be given as the Company has adopted the standard
from the year 2008-09.
9. Interest in Joint Venture Company.
a) During the year, the Company sold its entire investment in the
equity share capital of Joint Venture Company namely, Metropolitan
Media Company Private Limited (MMCPL), to Joint Venture Partner for a
lump sum consideration of Rs.600 lacs. This consideration is included in
'Other Income' as the investment was fully provided for in the books
in earlier years.
b) During the year, the Company has entered into an agreement with
Apollo Global Singapore Holdings Pte. Ltd., part of Apollo Group, Inc.
(U.S.A.), to participate in a 50:50 joint venture company which is
intended to provide high quality educational services and programs in
India. For this purpose, India Education Services Private Limited
(IESPL) was incorporated as a wholly-owned subsidiary on 24th October,
2011, which later became a 50:50 joint venture w.e.f. 22nd December,
2011 in terms of the said agreement.
The Company's share of the assets, liabilities, income and expenses of
the jointly controlled entity as at and for the year ended March 31,
2012 are as follows-
10. Leases
Rental expenses in respect of operating leases are recognized as an
expense in the statement of Profit and Loss, on a straight- line basis
over the lease term.
Operating Lease (for assets taken on Lease)
a) The Company has taken various residential, office and godown
premises under operating lease agreements. These are generally
cancellable leases and are renewable by mutual consent on mutually
agreed terms with or without rental escalations.
b) Lease payments recognized for the year are Rs.2,876.02 lacs (Previous
year Rs.2,784.56 lacs) and are disclosed as Rent in note no. 27 of these
financial statements.
c) The future minimum lease payments under non-cancellable operating
leases
- Not later than one year is Rs.435.55 lacs (Previous year Rs.403.27
lacs);
- Later than one year but not later than five years is Rs.1,694.06 lacs
(Previous year Rs.1,589.58 lacs);
- Later than five years is Rs.18.15 lacs (Previous year Rs.222.84 lacs).
11. Capital Advances include Rs.100.94 lacs (Previous year Rs.231.92 lacs)
paid towards Company's proportionate share for right to use in the
Common Infrastructure for channel transmission (for its four stations)
to be built on land owned by Prasar Bharti and to be used by all the
broadcasters at respective stations as per the terms of bid document on
FM Radio Broadcasting (Phase II).
12. Current tax is net of tax credit amounting to Rs.65.55 lacs
(Previous year includes tax charge Rs.211.88) with respect to earlier
years.
13. Previous year figures
Till the year ended March 31, 2011, the Company was using pre-revised
Schedule VI to the Companies Act, 1956, for preparation and
presentation of its financial statements. During the year ended March
31, 2012, the Revised Schedule VI notified under the Companies Act,
1956, has become applicable to the Company. The Company has
reclassified Previous year figures to conform to this year's
classification.
Mar 31, 2011
1. Nature of Operations
The Company publishes Hindustan Times.an English daily.andMint.a
Business paper daily except on Sunday. 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
nameFever 104 in cities of Delhi, Mumbai, Kolkata and Bangalore.
Till November 2009, the Company was also engaged in publishing
Hindustan, a Hindi Daily and two monthly magazines Nandan and
Kadambani. With effect from December 1,2009, the Company has sold the
"Hindi Business Undertaking" comprising ofHindustan, the Hindi Daily,
Nandan and Kadambani, 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
hindustantimes.com and livemint.com.
2. Basis of preparation
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by theCompanies
(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 estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year end. Although these estimates are based upon managements best
knowledge of current events and actions.actual results
coulddifferfromtheseestimates.
4. Contingent Liabilities
a) During the year ended March 31,2005, the Company acquired the
printing undertaking at New Delhi from its holding company namely The
Hindustan Times Limited (HTL).The writ petition filed by the ex-workmen
of HTL challenging the transfer of business was quashed by the Honble
Delhi High Court on May 9,2006. Thereafter, the ex-workmen of HTL
raised the industrial dispute before Delhi Government, who referred the
dispute to Industrial Tribunal-I, Karkardooma Courts, New Delhi
(Tribunal). During the course of the proceedings before the Tribunal,
the ex-workmen moved application for interim relief. The Tribunal vide
its order dated March 8,2007, granted interim relief to theex-workmen
of HTL to the extent of 50% of last drawn wages from thedateof such
order till the disposal of the matter. However, HTL challenged the
said order before Honble Delhi High Court in a Writ Petition, wherein
the Honble Court modified the order of the Tribunal to the extent that
the amount equivalent to 50% so received by ex-workmen will be set off
against their retrenchment compensation (not encashed by the above
ex-workmen till date), in the event of HTL succeeding in the writ
petition. The Honble Court further clarified that payment will be made
only from date of the High Court order (i.e. March 23,2007) till the
disposal of writ petition and it further stayed the orderand
proceedings pending before the Tribunal. The said writ stands disposed
of by Delhi High Court vide order dated 16.012009 by holding that it
was agreed between the parties to make the payment to ex-workmen till
the amount of their Retrenchment Compensation is exhausted. The stay on
the proceedings before the Industrial Tribunal was also vacated by High
Court and accordingly proceedings before the Industrial Tribunal has
re-started.
The matter has reached the stage of final arguments and no additional
adverse order has been passed against thecompany during the
currentfinancial year. In the meanwhile the workmen in question in the
said Writ Petition has filed contempt petition against the Hindustan
Times Limited and its Directors and is pending before the court.
Considering the merits of the case and discussions with the solicitors,
the Company believes that there is fair chance of decision in its
favour and hence no provision is considered necessary against thesame
at this point in time.
b) Guarantee to Bank against line of credit sanctioned to HT Burda
Media Limited, a subsidiary,Rs.3,500 lacs (Previous year Nil)
c) Income tax department has raised a demand of Rs.618.79 lacs (Previous
year Nil) for the Assessment Year 2008-09 in respect of certain
expenses disallowed by Assessing Officer. The Company has filed an
appeal against the order of the Assessing Officer to Commissioner of
Income Tax (Appeals). TheCompany based on legal adviceobtained is
confident of winning the above case and is of view that no provision is
required.
d) GuaranteeissuedbyCompanysbankerson behalf of HTBurda Media
Limited.a subsidiary, to third parties Rs.5101 lacs (Previous year Nil).
5. In the previous year the Company has sold its Hindi business
undertaking comprising of "Hindustan" (Hindi news daily), "Nandan" &
"Kadambini" (Hindi magazines) and its related facilities (the Hindi
Business) relating to publication business segments, on slump sale and
going concern basis to Hindustan Media Ventures Limited, a subsidiary
of the Company with effect from December 1,2009 on Book Value as on
November 30,2009 (closing), for a lump-sum cash consideration of
Rs.14,318.27 lacs comprising of fixed assets of Rs. 12,534.26 lacs and net
working capital of Rs.1,784.01 lacs. Since the sale was made on book
value therefore there was no gain or loss on such transaction and
considering the brought forward long term capital losses, there was no
tax impact of such transaction. Due to the sale of Hindi business
undertaking, the results for the year ended March 31,2011 are not
comparable with the results fortheyearended March 31,2010
6. In terms of the Scheme of Arrangement and Restructuring u/s 391-394
read with Sections 100-104 of the Companies Act, 1956 between the
Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the Honble Delhi High Court, the assets and
liabilities of the radio business of the Demerged company were taken
over as at January 1,2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, is now amortized against the credit balance of Securities
Premium Account over the useful lifeof the said licenses or their
unexpired period (whichever is lower) from date of merger of Radio
business as per the approved Scheme. Consequently an amount of Rs.765.44
lacs (Previous Year Rs.765.44 lacs) has been debited to the Securities
Premium Account in thecurrent year.
7. The Company has till date invested Rs.5,500 lacs in Firefly
e-Ventures Limited through its wholly owned subsidiary company HT
Digital Media Holdings Limited (formerly known as Hindustan Media
Limited) by way of Equity Share Capital. Firefly is engaged in the
internet related business like Job portals, Social Networking, etc.
Firefly is presently operating three websites [businesses] in the
nameofShine.com.HTCampus.com and Desimartini.com. Firefly has been
presently incurring losses and the accumulated losses as at March
31,2011 are Rs.9,519.67 lacs (Previous year Rs. 6,740.29 lacs). The
Company, however, is of the view that the nature of business of Firefly
being such, the losses were expected in the initial years and that
based on future projections prepared by Firefly for next five years
expects to generate sufficient income which will enable it to offset
the entire amount of accumulated losses incurred up to date. In view of
this, no impairment provision is considered against this investment.
During the current year, the Company has also filed a Scheme of
Arrangement and Restructuring u/s 391-394 read with Sections 100-104 of
the Companies Act, 1956 (the Scheme) with Firefly. The Scheme provides
for demerger of Job Portal Undertaking of Firefly [Shine.com ] and
transfer and vesting thereof into the Company w.e.f the appointed date,
i.e. January 1,2011. The Scheme was approved by a Committee of Board
of Directors of the Company on December 8,2010, subject to requisite
approval(s) and sanction by the Honble Delhi High Court. The Scheme
has been approved by the equity shareholders and creditors of both
thecompanies and at present is awaiting sanction by the Honble Delhi
High Court. Since the Scheme is awaiting sanction by the Honble Delhi
High Court, therefore, the impact of the Scheme has not been taken in
the books of the Company for the year ended March 312011
8. Share Based Compensation
The Instituteof Chartered Accountants of India has issueda
GuidanceNoteon Accounting for Employees Share-based Payments, which
is applicable to employee share based payment plans. The scheme
detailed below is managed and administered, compensation benefits in
respect of the scheme is assessed and accounted by the Group Company
and parent company and there is no cross charge to the Company for
obligation towards expenses. Accordingly, the Company is of the
opinion that there is no further accounting required. However, to
haveanunderstandingofthescheme, relevant disclosuresaregiven below. I.
As approved by the shareholders at their Extra-ordinary General Meeting
held on October 21, 2005, during an earlier year, the Company has given
interest-free loan of Rs.2,174.28 lacs to HT Media Employee Welfare Trust
which in turn purchased 468,044 Equity Shares of Rs.10/- each of HT Media
Limited (as on date equivalent to 2,340,220 Equity Shares of %2j- each)
from the open market [average cost per share - Rs.92.91 based on Equity
Shareof fl/- each], for the purpose of granting Options under the HTML
Employee Stock Option Scheme (the Scheme), toeligibleemployees.
During the financial year 2007-08, the Scheme was modified to the
effect - (a) Options granted w.e.f. September 15,2007 shall vest as per
previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of
thesubsidiary company.
The Options granted under the Scheme shall vest as per the Schedules of
vesting period which are hereinafter referred to as Plan A, Plan B
(applicable to Options granted w.e.f. September 15, 2007) and Plan C
(applicable to Options granted w.e.f. October 8, 2009). Options
granted under both the plans are exercisable for a period of 10 years
after the scheduled vesting dateofthelasttrancheoftheOptions as
pertheScheme.
A. Details of these plans are given below:
Employee Stock Options
Astockoptiongivesan employee, the right to purchase equitysharesof
Firefly e-Ventures Limited at a fixed pricewithina specific period of
time. Thegrantprice(orstrikeprice) for options granted during
thefinancialyear 2009-10 shall be Rs.10 each per option
Weighted average fair value of the options outstanding is Rs.4.82
(Previous year Rs.4.43) per option. Since no options have been exercised
during the period, thus weighted average share price has not been
disclosed.
HT Media Limited has given loan of Rs.242.70 lacs (Previous Year-
Rs.242.70 lacs) along withTheHindustanTimes Limited (theparent company)
to"HTGroupCompanies-EmployeeStockOption Trust" which in turn has
purchased 37,338 Equity Shares of Rs.10/- each of Hindustan Media
Ventures Limited (HMVL) - Subsidiary Company of HT Media Limited, for
the purpose of granting Options under theHTGroup Companies -Employee
StockOptionScheme(theScheme), to eligible employees of thegroup. On
these purchased shares, the trust has also received 238,964 shares out
of the bonus shares issued by HMVL on February 21,2010.
A. Details of these plansare given below: Employee Stock Options
Astockoptiongivesanemployee, the righttopurchaseequityshares of
HMVLatafixedpricewithinaspecific period of time.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors on long term basis. The Company expects to contribute
Rs. 233.53 lacs to gratuity fund in the year2011-12
9. Leases
Rental expenses in respect of operating leases are recognized as an
expense in the Profit and Loss Account, on a straight-line basis over
the lease term. Operating Leasefforassetstakenon Lease)
a) The Company has taken various residential, office and godown
premises under operating lease agreements. These are generally
cancellable leases and are renewable by mutual consent on mutually
agreedtermswithorwithoutrentalescalations.
b) Lease payments recognized for the year are Rs.2,78456 lacs (Previous
year Rs.2,639.19 lacs) and are disclosed as Rent under Schedule 18.
c) Thefuture minimum lease payments under non-cancellable operating
leases .Not later than one year is Rs.403.27 lacs (Previousyear Rs.393.97
lacs);
.Later than one year but not later than five years is Rs.688.64 lacs
(Previous year Rs.1,022.51 lacs);
.Laterthan five years is Rs.222.84 lacs (Previous year f 227.13 lacs).
d) Sub-lease Income recognized
fortheyearareRs.43.00lacs(PreviousyearRs.73.00 lacs)
10. Exceptional Items
a. Exceptional item includes of provision of Nil (Previous Year Rs.2,750
lacs) towards diminution in Companys investment in eguity share
capital of thejoint venture and provision of Nil (PreviousYear Rs.287
lacs) towards amount recoverable from the said joint venture.
b. With effect from current year, the provision for impairment related
to "Partnership for Growth" business has been considered as part of
operating expenses. Accordingly Rs.550 lacs for financial year ended
March 31, 2010 have been reclassified from exceptional items to
operating expenses. The provision are estimated by management based on
valuations carried out by independent valuers.
11. Previous Year comparatives
Previous year/years figures have been regrouped/ rearranged where
necessary to conform tothis years classification.
Mar 31, 2010
1. During the year ended March 31, 2005, the Company acquired the
printing undertaking at New Delhi from its holding company namely The
Hindustan Times Limited (HTL). The writ petition filed by the ex
Ãworkmen of HTL challenging the transfer of business was quashed by the
HonÃble Delhi High Court on May 9, 2006. Thereafter, the ex-workmen of
HTL raised the industrial dispute before Delhi Government, who referred
the dispute to Industrial Tribunal-I, Karkardooma Courts, New Delhi
(Tribunal). During the course of the proceedings before Tribunal, the
ex- workmen moved application for interim relief. The Tribunal vide its
order dated March 8, 2007, granted interim relief to the ex-workmen of
HTL to the extent of 50% of last drawn wages from the date of such
order till the disposal of the matter.
However, HTL challenged the said order before HonÃble Delhi High Court
in a Writ Petition, wherein the HonÃble Court modified the order of the
Tribunal to the extent that the amount equivalent to 50% so received by
ex-workmen will be set off against their retrenchment compensation (not
encashed by the above ex-workmen till date), in the event of HTL
succeeding in the writ petition. The HonÃble Court further clarified
that payment will be made only from date of the High Court order (i.e.
March 23, 2007) till the disposal of writ petition and it further
stayed the order and proceedings pending before the Tribunal.
The said writ stands disposed of by Delhi High Court vide order dated
16.01.2009 by holding that it was agreed between the parties to make
the payment to ex-workmen till the amount of their Retrenchment
Compensation is exhausted. The stay on the proceedings before the
Industrial Tribunal was also vacated by High Court and accordingly
proceedings before the Industrial Tribunal has re-started.
In the meanwhile the workmen in question in the said Writ Petition has
filed contempt petition against Hindustan Times Limited and its
Directors and is pending before the court. Considering the merits of
the case and discussions with the solicitors, the Company believes that
there is fair chance of decision in its favour and hence no provision
is considered necessary against the same at this point in time.
2. In terms of the shareholderÃs approval u/s 293(1)(a) of the
Companies Act, 1956 and pursuant to the resolution passed at the Board
meeting held on November 16, 2009, the Company has sold its Hindi
business undertaking comprising of "Hindustan" (Hindi news daily),
"Nandan" & "Kadambini" (Hindi magazines) and its related facilities
(the Hindi Business) relating to publication business segments, on
slump sale and going concern basis to Hindustan Media Ventures Limited,
a 98.85% subsidiary of the Company with effect from December 1, 2009 on
Book Value as on November 30, 2009 (closing), for a lump-sum cash
consideration of Rs.14,318.27 lacs comprising of fixed assets of
Rs.12,534.26 lacs and net working capital of Rs.1,784.01 lacs which has
been subsequently received by the Company. Since the sale was made on
book value therefore there was no gain or loss on such transaction and
considering the brought forward long term capital losses, there was no
tax impact of such transaction.
3. Segment Information Identification of Segments Primary Segment
Business Segment
The Company is presently engaged in the business of Printing and
Publication of Newspapers & Periodicals and in the business of radio
broadcast and all other related activities through its Radio channels
operating under brand name ÃFever 104Ã in India. Accordingly the
Company has organised its operations into two major businesses:
ÃPrinting and Publishing of Newspapers and Periodicalsà and ÃRadio
BroadcastÃ.
Secondary Segment
Geographical Segments
The Companys operations are mostly within India and do not have
operations in economic environments with different risks and returns.
Hence, it is considered operating in single geographical segment.
4. In terms of the Scheme of Arrangement and Restructuring u/s 391-394
read with Sections 100-104 of the Companies Act, 1956 between the
Company and HT Music and Entertainment Company Limited (Demerged
Company) as approved by the HonÃble Delhi High Court, the assets and
liabilities of the radio business of the Demerged Company were taken
over as at January 1, 2009. One Time Entry Fees (OTEF) paid for
acquiring license for Radio business paid by the Demerged Company in
earlier years which was capitalized and amortized on straight line
basis, shall be amortized against the credit balance of Securities
Premium Account over the useful life of the said licenses or their
unexpired period (whichever is lower) from date of Merger of Radio
business as per the approved Scheme. Consequently an amount of
Rs.765.44 lacs (Previous year Rs.188.73 lacs) has been debited to the
Securities Premium Account in the current year.
5. The Company has till date, invested in Firefly e-Ventures Limited
through its wholly owned subsidiary company HT Digital Media Holdings
Limited (formerly Hindustan Media Limited), Rs.5,550 lacs by way of
Equity Share Capital. Firefly is engaged in the internet related
business like Job portals, Social Networking, etc.
The aforesaid Company has been presently incurring losses. The
accumulated losses as at March 31, 2010 are Rs.6,740.29 lacs. The
Company, however, is of the view that the nature of business of the
said Company being such, the losses were expected in the initial years
and the said Company based on future projections prepared for next five
years expects to generate sufficient income which will enable it to
offset the entire amount of accumulated losses incurred upto date. In
view of this, no impairment provision is considered against this
investment.
6. Share Based Compensation
The Institute of Chartered Accountants of India has issued a Guidance
Note on Accounting for Employees Share-based Payments, which is
applicable to employee share based payment plans. The scheme detailed
below is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the group company and parent
company and there is no cross charge to the Company for obligation
towards expenses. Accordingly, the Company is of the opinion that there
is no further accounting required. However, to have an understanding of
the scheme, relevant disclosures are given below. I As approved by the
shareholders at their Extra-ordinary General Meeting held on October
21, 2005, during an earlier year, the Company has given interest-free
loan of Rs.2,174.28 lacs to HT Media Employee Welfare Trust which in
turn purchased 468,044 Equity Shares of Rs.10/- each of HT Media
Limited (as on date equivalent to 2,340,220 Equity Shares of Rs.2/-
each) from the open market [average cost per share à Rs.92.91 based on
Equity Share of Rs.2/- each], for the purpose of granting Options under
the ÃHTML Employee Stock Option Schemeà (the Scheme), to eligible
employees.
During the financial year 2007-08, the Scheme was modified to the
effect à (a) Options granted w.e.f. September 15, 2007 shall vest as
per previous revised schedule of vesting period; and (b) to extend the
coverage of the Scheme to the eligible full-time employees of the
subsidiary company.
The Options granted under the Scheme shall vest as per two Schedules of
vesting period which are hereinafter referred to as ÃPlan AÃ , ÃPlan BÃ
(applicable to Options granted w.e.f. September 15, 2007) and Plan C
(applicable to Options granted w.e.f. October 8, 2009). Options
granted under both the plans are exercisable for a period of 10 years
after the scheduled vesting date of the last tranche of the Options as
per the Scheme.
Difference between employee compensation cost (calculated using the
intrinsic value of stock options) and the employee compensation cost
(calculated on the fair value of the options) is Rs.282.89 lacs
(Previous year Rs.332.89 lacs) which will result into income of
Rs.282.89 lacs (Previous year - loss of Rs. 332.89 lacs). Had the fair
value method been used the profit would have been higher by Rs.282.89
lacs (Previous year profit would have been lower by Rs. 332.89 lacs) &
adjusted basic & diluted EPS would have been Rs.5.43 (Previous year
Rs.3.50) (Nominal value of share Rs.2/-).
I The subsidiary company, Firefly e-Ventures Limited has given
Employee Stock Options (ESOPs) to employees of HT Media Limited (HTML).
A. Details of these plans are given below:
Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of Firefly e-Ventures Limited at a fixed price within a specific period
of time. The grant price (or strike price) is fixed as below:
i. For options granted during the financial year 2009-10 shall be
Rs.10/- each per option
ii. For options granted in any financial year commencing on or after
April 1, 2010 shall be the fair market value of one share as on the
date of grant or face value of share whichever is higher.
Difference between employee compensation cost (calculated using the
intrinsic value of stock options) and the employee compensation cost
(calculated on the fair value of the
options) is Rs.45.61 lacs (Previous year Rs.Nil). However, these have
not been charged back to the Company by the subsidiary company, hence
not accounted for by the Company.
III HT Media Limited has given loan of Rs.242.70 lacs (Previous year Ã
Rs. Nil) along with The Hindustan Times Limited (the Parent Company) to
ÃHT Group Companies à Employee
Stock Option Trustà which in turn has purchased 37,338 Equity Shares of
Rs. 10/- each of Hindustan Media Ventures Limited (HMVL) Ã Subsidiary
Company of HT Media Limited,
for the purpose of granting Options under the ÃHT Group Companies
ÃEmployee Stock Option Schemeà (the Scheme), to eligible employees of
the group. On these purchased
shares, the trust has also received 238,964 shares out of the bonus
shares issued by the HMVL on February 21, 2010.
A. Details of these plans are given below: Employee Stock Options
A stock option gives an employee, the right to purchase equity shares
of the HMVL at a fixed price within a specific period of time. The
details of exercise price for stock options outstanding at the end of
the current year ended March 31, 2010 are:
Difference between employee compensation cost (calculated using the
intrinsic value of stock options) and the employee compensation cost
(calculated on the fair value of the options) is Rs.90.91 lacs
(Previous Year Rs.20.10 lacs). However, these will not be charged back
to the Company by the trust, Parent and Ultimate Parent Company, hence
not accounted for by the Company.
7. In terms of the Scheme of Arrangement and Restructuring under
Sections 391 - 394 read with Sections 100 Ã 104 of the Companies Act,
1956 between the Company and HT Music and Entertainment Company Limited
(HT Music), a subsidiary company, during the current period, 769,230
Equity Shares of Rs. 2/- each of the Company have been allotted on May
27, 2009 to a shareholder of HT Music viz. ÃThe Hindustan Times
Limitedà (Holding Company).
8. Gratuity (Post Employment Benefit plan)
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of services gets a gratuity on separation
at 15 days salary (last drawn salary) for each completed year of
service. The Company has formed a Gratuity Trust to which contribution
is made based on actuarial valuation done by independent valuer. The
following table summarizes the components of net benefit expenses
recognized in the Profit and Loss Account and the funded status and
amount recognized in the Balance Sheet for respective plans:
9. Leases
Rental expenses in respect of operating leases are recognized as an
expense in the Profit and Loss Account on a straight-line basis over
the lease term. Operating Lease (for assets taken on Lease)
a) The Company has taken various residential, office and godown
premises under operating lease agreements. These are generally
cancellable leases and are renewable by mutual consent on mutually
agreed terms with or without rental escalations.
b) Lease payments recognized for the year are Rs.2,639.19 lacs
(Previous year Rs.2,227.36 lacs) and are disclosed as Rent under
Schedule 18.
c) The future minimum lease payments under non-cancellable operating
leases
- Not later than one year is Rs.603.17 lacs (Previous year Rs.998.84
lacs);
- Later than one year but not later than five years is Rs.2,222.46 lacs
(Previous year Rs.2,411.25 lacs);
- Later than five years is Rs.1,162.95 lacs (Previous year Rs.1,921.76
lacs).
d) Sub-lease income recognized for the year are Rs.191.00 lacs
(Previous year Rs.53.00 lacs)
10. Exceptional Items:
a) i) During the year, the Company has made a provision of Rs.2,750.00
lacs (Previous year
Rs. Nil) (towards diminution in its investment in equity share capital
of Joint Venture ( Metropolitan Media Company Private Limited) due to
discontinuation of its operations, thereby fully impairing the
investment of Rs.2,750.00 lacs in the Joint Venture.
ii) Provision of Rs.287.00 lacs (Previous year Rs. Nil) was also made
towards amount recoverable from the above Joint Venture.
iii) Provision of Rs. Nil (Previous Year Rs.852.50 lacs) towards
diminution in long term investments as estimated by management based on
valuation done by independent valuer.
b) During the year, the Company has made a provision of Rs.550.00 lacs
(Previous year Rs.276.50 lacs) towards diminution in value of advances
paid for purchase of properties, as estimated by management based on
valuations carried out by independent valuers.
c) One time and non-recurring expenditure of Rs. Nil (Previous year
Rs.752.51 lacs) towards consultancy charges paid for drawing up
strategic plan(s) for new areas of business.
11. Previous Year comparatives
Previous year/yearÃs figures have been regrouped / rearranged where
necessary to conform to this yearÃs classification.