Mar 31, 2016
1 Summary of Significant Accounting Policies 1. 1 Basis of Preparation
These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India, under the historical cost convention, on accrual basis. As per Rule 7 of The Companies(Accounts) Rules, 2014, the standards of accounting as specified under the Companies Act,1956 shall be deemed to be the accounting standards until accounting standards are specified by the Central Government under Section 133 of the Companies Act,2013. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act,1956 [Companies (Accounting Standards) Rules,2006 ] and the relevant provisions of the Companies Act,2013.
Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. The Company has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities.
1.2 Use of Estimates
The preparation of financial statements requires the management to make estimates and assumptions, which are considered to arrive at the reported amounts of assets and liabilities and disclosure of contingent liabilities as on the date of the financial statements and the reported income and expenses during the reporting year. Although these estimates are based upon the managementâs best knowledge of current events and actions, actual results could differ from these estimates. The difference between the actual results and the estimates are recognized in the periods in which the results are known / materialized. Any revision to the accounting estimates is recognized prospectively in the current and future years.
1.3 Fixed Assets, Depreciation / Amortization and Impairment
i) Fixed Assets
Tangible Assets are carried at acquisition cost, net of accumulated depreciation and accumulated impairment losses, f any. Cost comprises of the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. Own developed assets are capitalized at cost including an appropriate share of directly attributable overheads. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realizable value and are shown separately in the financial statements. Any expected loss is recognized immediately in the Statement of Profit and Loss. Borrowing costs relating to acquisition of fixed assets, which take substantial period of time to get ready for their intended use, are also capitalized to the extent they relate to the period till such assets are ready to put to use.
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Cost comprises of the purchase price and any directly attributable expenditure on making the asset ready for its intended use. Intangible assets, comprising of amounts relating to Computer Software, Goodwill and Non Compete Fee, are recognized only if they are separately identifiable and the company expects to receive future economic benefits arising out of them. The amortization period and amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from the previous estimate, the amortization period is changed accordingly.
ii) Depreciation / Amortizations
a) Depreciation on tangible assets other than Freehold and Leasehold Land, including assets acquired under finance lease, is provided over the estimated useful life of assets, in accordance with Schedule II to the Companies Act, 2013. The residual value of assets is considered at 5%.
For the purpose of estimating the useful life of tangible assets as required under Schedule II , the Company has broadly divided the tangible assets in two categories viz., (a) assets which are specific to its industry and (b) assets which are general in nature. For the assets which are specific to its industry, the Company has estimated the useful life of such assets based on its past experience in this regard, which has been duly supported by independent technical advice. For assets which are general in nature, the Company has adopted the useful life as specified in Schedule II to the Companies Act, 2013.
Accordingly, the useful lives of tangible assets of the Company which are different from the useful lives as specified by Schedule II are as given below :
Leasehold Land is amortized over the period of lease.
b) Intangible assets are amortized on a straight line basis over their expected useful life as follows:
a) Non compete fees is amortized over the period of agreement with the Local Cable Operators (âLCOsâ), in equal installments.
b) Computer software and Goodwill are amortized over a period of five years.
iii) Impairment
The carrying amount of assets is reviewed at each Balance Sheet date to determine if there is any indication of impairment, based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation, if there was no impairment.
1.4 Inventories
Inventories comprising of Stores and Spares are stated at lower of cost and net realizable value. The Company follows the first-in, first-out (FIFO) basis for valuation of inventory. Cost comprises of expenditure incurred in the normal course of business in bringing such inventories to their location and condition. Obsolete, slow moving and defective inventories are identified at the time of physical verification and where necessary, provision is made for such inventories. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
1.5 Borrowing Costs
Borrowing costs relating to the acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.
All other costs related to borrowings are recognized as expense in the year in which they are incurred.
1.6 Leases Where the Company is lessee: Finance Lease
(i) Assets acquired under leases where all the risks and rewards of ownership have been substantially transferred in favor of the Company are classified as finance leases. Such Leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.
Operating lease
(ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. Operating lease rentals are charged to the Statement of Profit and Loss on accrual basis.
Where the Company is less or: Operating lease
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in Fixed Assets. Lease income on an operating lease is recognized in the Statement of Profit and Loss on accrual basis. Costs, including depreciation are recognized in the Statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc are recognized immediately in the Statement of Profit and Loss.
1.7 Investments
Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with Accounting Standard 13 on âAccounting for Investmentsâ. All other investments are classified as non-current investments.
Current investments are carried at lower of cost and fair value.
Non-current investments are carried at cost. However, provision for diminution in value, other than temporary in nature, is made to recognize a decline, for each investment individually.
1.8 Foreign Currency Transactions and Translations
The reporting currency of the Company is the Indian Rupee (Rs.).
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the prevailing exchange rate between the reporting currency and the foreign currency, as on the date of the transaction.
ii) Conversion
As at the reporting date, foreign currency monetary items are reported using the year end rate. Nonmonetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates prevailing at the date when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement or reporting of monetary items, at rates different from those at which they were initially recorded during the year or reported in previous financial statements and / or on conversion of monetary items, are recognized as income or expense in the year in which they arise.
1.9 Revenue Recognition
a) Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company, it can be reliably measured and it is reasonable to expect ultimate collection.
b) Service revenue comprises subscription fees, channel carriage fees, use of infrastructure facilities and other services. Income from services is recognized upon completion of services as per the terms of contracts with the customers. Period based services are accrued and recognized prorata over the contractual period.
c) Connection fees is recognized as revenue in the month of activation of service.
1.10. Other Income
Income is recognized in the Statement of Profit and Loss on an accrual basis.
Interest : Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Insurance Claims: It is not practicable to estimate the amount at which an Insurance Claim will be settled. Hence, Insurance Claims are recognized as income on settlement with the insurers.
1.11 Provision for Doubtful Receivables
In case of retail trade receivables, the entire amount which is outstanding for more than six months is provided for in the Statement of Profit & Loss.
For other receivables, provision is made based on managementâs assessment of each receivable separately.
1.12. Bad Debts
In case of retail customers, the entire outstanding dues as on the date of disconnection of service for any reason is written off as Bad Debts.
For other receivables, amount is written off based on managementâs assessment of each receivable separately.
1.13. Employee Benefits Post Employment Benefits:
(i) Provident Fund
This is a defined contribution plan. Contributions to the recognized Provident Fund maintained by the Regional Provident Fund Commissioner are charged to the Statement of Profit and Loss on accrual basis. The Company has no further obligations for future provident fund benefits other than its contributions.
(ii) Gratuity
This is a defined benefit plan covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment. The Companyâs scheme is administered by Life Insurance Corporation of India (LICI). The liability is determined based on year end actuarial valuation using projected unit credit method. Actuarial gains/losses are recognized immediately in the Statement of Profit and Loss as income or expense. The fair value of the plan assets is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on net basis. Past Service Costs, to the extent its benefits already vested, is recognized immediately in the Statement of Profit and Loss.
(iii) Leave Encashment
Accumulated compensated absences, which are expected to be available or encased beyond 12 months from the end of the year are treated as other long term employee benefits. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses / gains are recognized in the Statement of Profit and Loss in the year in which they arise.
(iv) Superannuation fund
The Company operates a superannuation scheme for its eligible employees with LICI towards which the Company contributes up to a maximum of 15% of the employeesâ current salary, which is charged to the Statement of Profit and Loss. The above benefit is in the nature of a defined contribution plan.
1.14. Employee Stock Option Expenses
Measurement and disclosure is done in accordance with the relevant guidelines and regulations issued by Securities and Exchange Board of India in this respect and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India (ICAI). The Company measures compensation cost relating to employee stock options using the intrinsic value method. The deferred employee stock compensation is charged to Statement of Profit and Loss on straight line basis over the vesting period of the option.
1.15. Taxes on Income
Tax expense comprises of current tax [(net of Minimum Alternate Tax (MAT) credit entitlement)] and deferred tax.
Current tax is the amount of tax payable on the taxable income for the year, determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax reflects the impact of timing differences between taxable income and accounting income for the current reporting year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities. The deferred tax assets and deferred tax liabilities relate to the taxes on income levied by the same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the guidance note issued by The Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
1.16. Segment Reporting
The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. There is no intersegment revenue. Revenue and expenses have been identified to segments on the basis of their relationship with the operating activities of the segment. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under âUnallowable expenses net of incomeâ.
1.17. Programming Cost
Programming Cost represents amount paid / payable to Broadcasters to telecast their respective channels.
1.18. Provision, Contingent Liabilities and Contingent Assets
A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are not recognized but are disclosed in the notes to financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.
1.19. Earnings Per Share (EPS)
Basic EPS is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
1.20 Prior Period, Exceptional and Extra Ordinary Items
Prior Period, Exceptional and Extra Ordinary items having material impact on the financial affairs of the Company are disclosed separately.
Mar 31, 2015
1.1 Basis of Preparation
These financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India, under the historical
cost convention, on accrual basis. As per Rule 7 of The
Companies(Accounts) Rules, 2014, the standards of accounting as
specified under the Companies Act,1956 shall be deemed to be the
accounting standards until accounting standards are specified by the
Central Government under Section 133 of the Companies Act,2013.
Consequently, these financial statements have been prepared to comply
in all material aspects with the accounting standards notified under
Section 211(3C) of the Companies Act,1956 [Companies (Accounting
Standards) Rules,2006 ] and the relevant provisions of the Companies
Act,2013.
Operating Cycle
All assets and liabilities have been classified as current or non-
current as per the Company's operating cycle and other criteria set out
in Schedule III of the Companies Act, 2013. The Company has ascertained
its operating cycle as twelve months for the purpose of
current/non-current classification of assets and liabilities.
1.2 Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions, which are considered to arrive at the
reported amounts of assets and liabilities and disclosure of contingent
liabilities as on the date of the financial statements and the reported
income and expenses during the reporting year. Although these estimates
are based upon the management's best knowledge of current events and
actions, actual results could differ from these estimates. The
difference between the actual results and the estimates are recognized
in the periods in which the results are known / materialized. Any
revision to the accounting estimates is recognized prospectively in the
current and future years.
1.3 Fixed Assets, Depreciation / Amortisation and Impairment
i) Fixed Assets
Tangible Assets are carried at acquisition cost, net of accumulated
depreciation and accumulated impairment losses, if any. Cost comprises
of the purchase price and any directly attributable cost of bringing
the asset to its working condition for its intended use. Own developed
assets are capitalized at cost including an appropriate share of
directly attributable overheads. Subsequent expenditures related to an
item of fixed asset are added to its book value only if they increase
the future benefits from the existing asset beyond its previously
assessed standard of performance. Items of fixed assets that have been
retired from active use and are held for disposal are stated at the
lower of their net book value and net realizable value and are shown
separately in the financial statements. Any expected loss is recognized
immediately in the Statement of Profit and Loss. Borrowing costs
relating to acquisition of fixed assets, which take substantial period
of time to get ready for their intended use, are also capitalised to the
extent they relate to the period till such assets are ready to put to
use.
Intangible assets are stated at acquisition cost, net of accumulated
amortisation and accumulated impairment losses, if any. Cost comprises
of the purchase price and any directly attributable expenditure on
making the asset ready for its intended use. Intangible assets
comprises of amounts relating to Computer Software, Goodwill and Non
Compete Fee, are recognised only if they are separately identifiable
and the company expects to receive future economic benefits arising out
of them. The amortisation period and amortisation method are reviewed
at least at each financial year end. If the expected useful life of the
asset is significantly different from the previous estimate, the
amortisation period is changed accordingly.
(ii) Depreciation and Amortisation
a) Depreciation on tangible assets other than Freehold and Leasehold
Land, including assets acquired under finance lease, is provided over
the estimated useful life of assets, in accordance with Schedule II to
the Companies Act, 2013. The residual value of assets is considered at
5%. For the year ended 31 March 2014, depreciation was provided in
accordance with Schedule XIV to the Companies Act, 1956.
For the purpose of estimating the useful life of tangible assets as
required under Schedule II , the Company has broadly divided the
tangible assets in two categories viz., (a) assets which are specific
to its industry and (b) assets which are general in nature.
For the assets which are specific to its industry, the Company has
estimated the useful life of such assets based on it's past experience
in this regard, which has been duly supported by independent technical
advice. For assets which are general in nature, the Company has adopted
the useful life as specified in Schedule II to the Companies Act, 2013.
Accordingly, the useful lives of tangible assets of the Company which
are different from the useful lives as specified by Schedule II are as
given below :
Asset Description(as per Estimated useful Estimated useful
Note No.11) life duty Life as per
supported Schedule
by Technical II(Years)
Advice(Years)
Cable Backbone Network 21 13,18
Cable Network- Drop 12,21 13,18
Cable Network- ILL & IFL 21 13,18
Maintenance Equipments 21 15
Head End Equipments 21 13
Broadband NOC Equipments 21 13
Depreciation / Amortisation on assets purchased / sold during the
reporting year is recognised on a pro-rata basis. Leasehold Land is
amortised over the period of lease.
b) Intangible assets are amortised on a straight line basis over their
expected useful life as follows:
a) Non compete fees is amortised over the period of agreement with the
Local Cable Operators ("LCOs"), in equal installments.
b) Computer software and Goodwill are amortised over a period of five
years.
iii) Impairment
The carrying amount of assets is reviewed at each Balance Sheet date to
determine if there is any indication of impairment, based on internal /
external factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation, if there was no
impairment.
1.4 Inventories
Inventories comprising of Stores and Spares are stated at lower of cost
and net realisable value. The Company follows first-in, first-out
(FIFO) basis for valuation of inventory.
Cost comprises of expenditure incurred in the normal course of business
in bringing such inventories to their location and condition. Obsolete,
slow moving and defective inventories are identified at the time of
physical verification and where necessary, provision is made for such
inventories. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.
1.5 Borrowing Costs
Borrowing costs relating to the acquisition / construction of
qualifying assets are capitalised until the time all substantial
activities necessary to prepare the qualifying assets for their
intended use are complete. A qualifying asset is one that necessarily
takes a substantial period of time to get ready for its intended use.
All other costs related to borrowings are recognised as expense in the
year in which they are incurred.
1.6 Leases
Where the Company is lessee :
Finance Lease
(i) Assets acquired under leases where all the risks and rewards of
ownership have been substantially transferred in favour of
the Company are classified as finance leases. Such Leases are
capitalised at the inception of the lease at lower of the fair value or
the present value of the minimum lease payments and a liability is
created for an equivalent amount. Each lease rental paid is allocated
between the liability and the interest cost, so as to obtain a constant
periodic rate of interest on the outstanding liability for each period.
Operating lease
(ii) Assets acquired under leases where a significant portion of the
risks and rewards of ownership are retained by the lessor are
classified as operating leases. Operating lease rentals are charged to
the Statement of Profit and Loss on accrual basis.
Where the Company is lessor:
Operating lease
Leases in which the Company does not transfer substantially all the
risks and rewards of ownership of the asset are classified as operating
leases. Assets subject to operating leases are included in Fixed
Assets. Lease income on an operating lease is recognised in the
Statement of Profit and Loss on accrual basis. Costs, including
depreciation are recognised in the Statement of Profit and Loss.
Initial direct costs such as legal costs, brokerage costs, etc are
recognised immediately in the Statement of Profit and Loss.
1.7 Investments
Investments which are readily realisable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments in accordance with Accounting
Standard 13 on 'Accounting for Investments'. All other investments are
classified as non-current investments.
Current investments are carried at lower of cost and fair value.
Non-current investments are carried at cost. However, provision for
diminution in value, other than temporary in nature, is made to
recognise a decline, for each investment individually.
1.8 Foreign Currency Transactions and Translations
The reporting currency of the Company is the Indian Rupee (Rs.).
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the prevailing exchange rate
between the reporting currency and the foreign currency, as on the date
of the transaction.
ii) Conversion
As at the reporting date, foreign currency monetary items are reported
using the year end rate. Non-monetary items which are carried in terms
of historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction. Non-monetary items
which are carried at fair value or other similar valuation denominated
in a foreign currency are reported using the exchange rates prevailing
at the date when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement or reporting of monetary
items, at rates different from those at which they were initially
recorded during the year or reported in previous financial statements
and / or on conversion of monetary items, are recognised as income or
expense in the year in which they arise.
1.9 Revenue Recognition
a) Revenue is recognised to the extent it is probable that the economic
benefits will flow to the Company, it can be reliably measured and it
is reasonable to expect ultimate collection.
b) Service revenue comprises subscription fees, channel carriage fees,
use of infrastructure facilities and other services. Income from
services is recognised upon completion of services as per the terms of
contracts with the customers. Period based services are accrued and
recognised prorata over the contractual period.
c) Connection fees is recognised as revenue in the month of activation
of service.
1.10 Other Income
Income is recognised in the Statement of Profit and Loss on an accrual
basis.
Interest : Interest income is recognized on a time proportion basis
taking into account the amount outstanding and the rate applicable.
Insurance Claims: It is not practicable to estimate the amount at which
an Insurance Claim will be settled. Hence, Insurance Claims are
recognised as income on settlement with the insurers.
1.11 Provision for Doubtful Receivables
In case of retail trade receivables, the entire amount which is
outstanding for more than six months is provided for in the Statement
of Profit & Loss.
For other receivables, provision is made based on management's
assessment of each receivable separately.
1.12 Bad Debts
In case of retail customers, the entire outstanding dues as on the date
of disconnection of service for any reason is written off as Bad Debts.
For other receivables, amount is written off based on management's
assessment of each receivable separately.
1.13 Employee Benefits
Post Employment Benefits:
(i) Provident Fund
This is a defined contribution plan. Contributions to the recognised
Provident Fund maintained by the Regional Provident Fund Commissioner
are charged to the Statement of Profit and Loss on accrual basis. The
Company has no further obligations for future provident fund benefits
other than its contributions.
(ii) Gratuity
This is a defined benefit plan covering eligible employees in
accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan
provides a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee's salary and the tenure of employment. The
Company's scheme is administered by Life Insurance Corporation of India
(LICI). The liability is determined based on year end actuarial
valuation using projected unit credit method. Actuarial gains/losses
are recognized immediately in the Statement of Profit and Loss as
income or expense. The fair value of the plan assets is reduced from
the gross obligation under the defined benefit plan, to recognise the
obligation on net basis. Past Service Costs, to the extent its benefits
already vested, is recognised immediately in the Statement of Profit
and Loss.
(iii) Leave Encashment
Accumulated compensated absences, which are expected to be available or
encashed beyond 12 months from the end of the year are treated as other
long term employee benefits. The Company's liability is actuarially
determined (using the Projected Unit Credit method) at the end of each
year. Actuarial losses / gains are recognised in the Statement of
Profit and Loss in the year in which they arise.
(iv) Superannuation fund
The Company operates a superannuation scheme for its eligible employees
with LICI towards which the Company contributes upto a maximum of 15%
of the employees' current salary, which is charged to the Statement of
Profit and Loss. The above benefit is in the nature of a defined
contribution plan.
1.14 Employee Stock Option Expenses
Measurement and disclosure is done in accordance with the relevant
guidelines and regulations issued by Securities and Exchange Board of
India in this respect and the Guidance Note on Accounting for Employee
Share-based Payments issued by the Institute of Chartered Accountants
of India (ICAI). The Company measures compensation cost relating to
employee stock options using the intrinsic value method. The deferred
employee stock compensation is charged to Statement of Profit and Loss
on straight line basis over the vesting period of the option.
1.15 Taxes on Income
Tax expense comprises of current tax [(net of Minimum Alternate Tax
(MAT) credit entitlement)] and deferred tax. Current tax is the amount
of tax payable on the taxable income for the year, determined in
accordance with the provisions of the Income Tax Act, 1961.
Deferred tax reflects the impact of timing differences between taxable
income and accounting income for the current reporting year and
reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the Balance Sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities. The deferred tax assets and deferred tax liabilities
relate to the taxes on income levied by the same governing taxation
laws. Deferred tax assets are recognised only to the extent that there
is reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. In
situations where the company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they
can be realised against future taxable profits.
At each Balance Sheet date, the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with the
recommendations contained in the guidance note issued by The Institute
of Chartered Accountants of India, the said asset is created by way of
a credit to the Statement of Profit and Loss and shown as MAT Credit
Entitlement. The Company reviews the same at each Balance Sheet date
and writes down the carrying amount of MAT Credit Entitlement to the
extent there is no longer convincing evidence to the effect that the
Company will pay normal income tax during the specified period.
1.16 Segment Reporting
The accounting policies adopted for segment reporting are in conformity
with the accounting policies adopted for the Company. There is no
inter-segment revenue. Revenue and expenses have been identified to
segments on the basis of their relationship to the operating activities
of the segment. Revenue and expenses, which relate to the Company as a
whole and are not allocable to segments on a reasonable basis, have
been included under 'Unallocated expenses net of income'.
1.17 Programming Cost
Programming Cost represents amount paid / payable to Broadcasters to
telecast their respective channels.
1.18 Provision, Contingent Liabilities and Contingent Assets
A provision is recognised when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance the notes to financial statements. Contingent Assets are
neither recognised nor disclosed in the financial statements.
1.19 Earnings Per Share (EPS)
Basic EPS is calculated by dividing the net profit or loss for the
period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted EPS, the net profit or loss for
the period attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
1.20 Prior Period, Exceptional and Extra Ordinary Items
Prior Period, Exceptional and Extra Ordinary items having material
impact on the financial affairs of the Company are disclosed
separately.