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Notes to Accounts of Sun TV Network Ltd.

Mar 31, 2023

The Company has one class of equity shares having a face value of Rs.5.00 each. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2023, the Board of Directors have declared an interim dividend of Rs.5 per share (100%), Rs.3.75 per share (75%), Rs.3.75 per share (75%) and Rs. 2.50 per share (50%) at their respective Board meeting held on August 12, 2022, November 11, 2022, February 3, 2023 and March 13, 2023. (March 31, 2022: Rs.13.75 /- share)

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. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Disclosure for Ind AS 115:

Disaggregated revenue information

Revenue is recognized when the performance obligations under the contract with customers are satisfied. In respect of all classes of revenue from operations as disclosed above, the performance obligation is satisfied at a point in time. For disaggregation of revenue by geographical regions, refer Note 33 - Segment information.

Trade Receivables and Contract assets / liabilities

Trade receivable and Unbilled revenue : The Company classifies the right to consideration in exchange for deliverables as contract receivable / unbilled revenue. A receivable is a right to consideration that is unconditional upon passage of time. Revenues in excess of billings is recorded as unbilled revenue and is classified as a other current asset. Trade receivable and unbilled revenues are presented net of impairment in Note 10 and Note 8.2 respectively. Deferred income / unearned revenue : Billings in excess of revenue recognised are disclosed as “Deferred Revenues” under other current liabilities - Note 19;

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company 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 of the Company 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.

Note 29. Leases disclosures

The Company has entered into operating leases on KU band Satellite transponders on non cancellable operating lease, with lease terms between 1 and 5 years. The Company has also entered into operating lease arrangements for office premises.

A) Defined Contribution plans

i) Contribution to Provident Fund : Contributions towards Employees Provident Fund made to the Regional / Employee Provident Fund are recognised as expenses in the year in which the services are rendered.

ii) Contribution to Employee State Insurance : Contributions to Employees State Insurance Scheme are recognised as expense in the year in which the services are rendered.

B) Defined benefit plan - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on cessation of employment at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company (LIC) in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. Based on the experience of the previous years, the Company expects to contribute about Rs.1.40 crores to the gratuity fund in the next year. However, the actual contribution by the Company will be based on the actuarial valuation report received from the insurance Company.

The Company contributes all ascertained liabilities towards gratuity to the Sun TV Network Ltd Employees Group Gratuity Trust and the Trustees also administer the contributions so made to the trust. As of March 31, 2023 and March 31,2022 the plan assets have been primarily invested in insurer managed funds.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analysis are based on a change in significant assumption, keeping all other assumptions constant. The sensitivity analysis may not be a representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

Note 31. Contingencies A) Contingent Liabilities

a. Matters wherein management has concluded that the Company’s liability is probable has been provided for.

b. Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

ii) a present obligation arising from past events, when no reliable estimate is possible. (Refer note below for the related disclosure)

Contingent assets are disclosed where an inflow of economic benefits is probable. Provision, contingent liabilities, and contingent assets are reviewed at each Balance Sheet date.

c. Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process, in relation to civil and criminal matters.

Disputed taxes not provided for in respect of:

As at March 31, 2023

As at March 31, 2022

a) Claims related to Income Tax**

20.23

10.35

b) Claims related to Custom duty

-

63.63

c) Claims related to Service Tax*

29.09

27.27

d) Claims related to Goods and Service Tax*

4.41

-

Total

53.73

101.25

*The Company received show cause cum demand notice from the Service Tax and Goods and Service Tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices /orders received with various authorities. The Company based on the judicial pronouncements and other submissions that believes its position is likely to be accepted by the authorities.

**The Company is contesting certain disallowances to the taxable income and demands raised by the Income tax authorities. The management, based on internal assessment and considering the views of its tax advisors, believe that its position will likely be upheld in the appellate process and ultimate outcome of these proceedings will not have a material adverse effect on the Company’s financial position and results of operations.

B) Commitments for capital contracts

Particulars

As at March 31, 2023

As at March 31, 2022

Estimated amount of contracts remaining to be executed on capital expenditure and not provided for

Outstanding commitments on capital contracts

0.18

0.17

Commitments for acquisition of film and program broadcasting rights, Production and distribution related rights

393.96

228.75

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Note 36. Description of valuation techniques used and key inputs to valuation on investment in tax free and taxable bonds:

The valuation for tax free and taxable bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has disclosed fair value of the tax free and taxable bonds using IMaCS standard methodology which captures the market condition as on given day of valuation on T 1 basis.

The Company has no restrictions on the disposal of its tax free bonds.

Significant unobservable Inputs:

The Independent valuer has made detailed study based on standards methodology for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also considered with market participant to understand the movement in levels. In the case of liquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried forward.

Note 37. Fair value disclosure on Investment properties:

The Company’s investment properties consists of office premises/ commercial properties let out on lease.

As at March 31,2023 and March 31,2022, the fair values of the properties are Rs.113.83 crores and Rs.105.93 crores respectively.

These valuations are based on valuations performed by an registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company has fair valued the office premises and commercial property let out on lease using Market approach method.

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depreciation and other leasehold improvements made by the Company to the respective properties.

Note 38. Financial risk management objectives and policies

The Company''s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 two types of risk: currency risk and other price risk, such as equity price risk. The value of financial instruments may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. Financial instrument affected by market risk includes investment in equity instruments etc.

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. As per the Forex policy, the Company, takes forward contract for transactions where the foreign currency risk on account of movement in exchange rate expected to be high and which is material to the Company. The impact of foreign exchange rate fluctuations is evaluated by assessing its exposure to exchange rates risks. Exposure to foreign exchange fluctuation risks is with monetary receivables / payables denominated in AFD Alin IlSn HAH RRP 7ARanHSm

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31,2022 and as forecasted for volatile currencies.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations and arises principally from the Company’s receivables, deposits given, investments made and balances at bank. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as

well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

The maximum exposure to the credit risk is equal to the carrying amount of financial assets as of March 31,2023 and March 31, 2022 respectively. On account of adoption of Ind AS 109 on ‘Financial Instruments’, the Company uses expected credit loss model to assess the impairment loss or gain.

Liquidity risk

The Company''s prime source of liquidity is cash and cash equivalents and the cash flow generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2023, the Company had a working capital of Rs.4,876.07 crores (March 31, 2022 - Rs.4,359.90 crores) including cash and cash equivalents of Rs.127.13 crores (March 31,2022 - Rs.215.73 crores) and current investment of Rs.3,499.34 crores (March 31,2022 - Rs. 2,421.98 crores).

As of March 31,2023 and March 31,2022 there are no material liability which is outstanding. Accordingly, no liquidity risk is perceived.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Note 39. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

Note 43. The Company has no borrowings or charge created as at March 31, 2023 and March 31,2022. In earlier years, the Company had registered "Satisfaction of Charges" with Registrar of Companies (ROC) in respect of 3 charges amounting to Rs.0.29 Crores; However these charges are appearing as "open" in MCA website due to non updation and the Company is following up with MCA for necessary corrections.

Note 44. The Company has reclassified / regrouped previous year figures to conform to this year''s classification. Note 45. Approval of financial statements

The standalone financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors at their meeting held on May 19, 2023.


Mar 31, 2022

Note 7.3.1 - Investment in Bharat bonds ETF

The Company holds 2,50,000 Bharat Bonds Exchange Traded Fund issued by Edelweiss Mutual Fund ("issuer"), having face value of Rs.1000/- per bond. These bonds listed on the Stock Exchange, carry the highest credit rating of AAA. These bonds have a defined maturity period and will mature in April, 2023 and at maturity, Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the debentures till maturity or upon the sale of the same to another investor before the debentures are redeemed by the issuer.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Note 7.3.2 - Investment in Nippon India ETF Nifty SDL-2026 units issued by Nippon India Mutual Fund

During the current year, the Company invested in the long term 744,079 units of Nippon India ETF Nifty SDL- 2026 issued by Nippon India Mutual Fund ("issuer"), having face value of Rs.10/- per unit. These units are listed on the Stock Exchange and proceeds from the sale of these units would predominantly be utilized for investment into State Development Loans (SDLs) representing Nifty SDL Apr 2026 Top 20 Equal Weight Index. The units have a defined maturity period and will mature in April 30, 2026. Upon maturity, the Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the unit till maturity or upon the sale prior to the maturity.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

During the current year, the Company invested in the long term 978,260 units of Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 issued by Nippon India Mutual Fund ("issuer"), having face value of Rs.10/- per unit. These units are listed on the Stock Exchange and proceeds from the sale of these units would predominantly be utilized for investment into Central Public Sector Enterprises (CPSEs), Public Financial Institutions(PFIs) and State Development Loans (SDLs) of Top 5 States / union Territory representing Nifty CPSE Bond Plus SDL Sep 2024, 50:50 Index. The units have a defined maturity period and will mature in September 30, 2024. Upon maturity, the Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the unit till maturity or upon the sale prior to the maturity.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Note 7.3.4 - Investment in Non-Convertible Debentures of Aseem Infrastructure Limited

During the current year,the Company holds 250 Non-Convertible Debentures issued by Aseem Infrastructure Limited ("issuer"), having face value of Rs.10,00,000/- per debenture. These bonds are listed on the Stock Exchanges and carry the highest credit rating of AAA. These bonds have a defined maturity period and will mature in October, 2024 and at maturity, Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the debentures till maturity or upon the sale of the same to another investor before the debentures are redeemed by the issuer.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Note 7.3.5 - Investment in units of India Infrastructure Trusts managed by Brookfield India Infrastructure Manager Private Limited

During the current year, the Company invested in the long term 24,00,000 units of India Infrastructure Trusts, an infrastructure investment trust (InvIT) whose Investment Managers are Brookfield India Infrastructure Manager Private Limited (“BIIMPL”). These units have a face value of Rs.100/- per unit and the initial investment proceeds were utilised to finance the construction of a pipeline system for transport of natural gas. The main customer for the InvIT is Reliance Industries Limited which company has executed a minimum guarantee to deliver an assured return of 9.24 % p.a. over the duration of the investment with a best case return of 12.65 % p.a. The InvIT has been assigned Corporate Credit rating of AAA/Stable by CRISIL and are not listed on any Stock Exchange. This InvIT has a defined maturity period and will mature in the year 2039 and the Company has the option to hold till maturity or sell prior to the maturity, at which time, the Company will get back the investments. The return on this investment will be realized during the period of holding and these units provide a steady cash flow distribution by way of interest/dividends/ principal payouts etc.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

During the current year, the Company invested in the long term 1,98,40,473 units of AXIS AAA Bond Plus SDL ETF issued by Axis Mutual Fund ("issuer"), having face value of Rs.1/- per unit. These units are listed on the Stock Exchange and proceeds from the sale of these units would predominantly be utilized for investment into AAA rated Corporate Bonds & State Development Loans (SDLs) represented by Nifty AAA Bond Plus SDL Apr 2026 50 : 50 Index. The units have a defined maturity period and will mature in April, 2026. Upon maturity, the Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the unit till maturity or upon the sale prior to the maturity.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Fair value hierarchy disclosures for investment in Non Convertible debentures have been provided in Note 35 - 37. Note 7.4.2 - Investment in Non Convertible debentures issued by Axis Finance

The Company holds 250 redeemable non-convertible debentures issued by Axis Finance Ltd ("issuer"), having face value of Rs. 10,00,000 /- debenture and the principal is protected at maturity. These debentures listed on the National Stock Exchange, carry the highest credit rating of AAA and will be redeemed in June 30, 2022 at a price being the last traded (closing) price of 6.45 Gsec 2049 as on 30th May 2022. The return on this investment will be realised either by holding the debentures till maturity or upon the sale of the same to another investor before the debentures are redeemed by the issuer.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Fair value hierarchy disclosures for investment in Non Convertible debentures have been provided in Note 35 - 37.

(ii) Term/Rights attached to Equity Shares

The Company has one class of equity shares having a face value of Rs.5.00 each. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2022, The Board of Directors have declared an interim dividend of Rs.3.75 per share (75%), Rs.2.50 per share (50%), Rs.2.50 per share (50%) and Rs. 5.00 per share (100%) at their respective Board meeting held on August 13, 2021, November 5, 2021, February 10, 2022 and March 7, 2022. (March 31,2021: Rs.5.00 /- share)

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. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Disaggregated revenue information

Revenue is recognized when the performance obligations under the contract with customers are satisfied. In respect of all classes of revenue from operations as disclosed above, the performance obligation is satisfied at a point in time. For disaggregation of revenue by geographical regions, refer Note 33 - Segment information.

Trade Receivables and Contract assets / liabilities

Trade receivable and unbilled revenue : The Company classifies the right to consideration in exchange for deliverables as contract receivable / unbilled revenue.

A receivable is a right to consideration that is unconditional upon passage of time. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset. Trade receivable and unbilled revenues are presented net of impairment in Note 10 and Note 9.2 respectively.

Deferred income / unearned revenue : Billings in excess of revenue recognised are disclosed as “Deferred Revenues” under other current liabilities - Note 19; As against the opening balance of deferred revenue of Rs.27.20 crores , revenue recognised during the year amounts to Rs.23.79 crores ;

Note: "For the year ended March 31,2021 Taxes relating to earlier years" represents income tax determined by the Income Tax Authorities based on the Company''s application under the Direct Tax Vivad se Vishwas Act, 2020, in respect of pending income tax litigations pertaining to Financial years 2003-04 to 2016-17 amounting to Rs.236.66 crores and provision created on similar basis for the subsequent financial years 2017-18 to 2019-20 amounting to Rs.136.98 crores and recorded by the Company in the current financial year. This has been done inter alia to reduce pending income tax litigation in respect of the claims under Income Tax Act,1961 and de-risking the Company’s financial position, notwithstanding the fact that the Company’s position have consistently been upheld in the past by Appellate Authorities.

Note 28. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company 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 of the Company 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.

A) Defined Contribution plans

i) Contribution to Provident Fund : Contributions towards Employees Providend Fund made to the Regional / Employee Provident Fund are recognised as expenses in the year in which the services are rendered.

ii) Contribution to Employee State Insurance : Contributions to Employees State Insurance Scheme are recognised as expense in the year in which the services are rendered.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on cessation of employment at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company (LIC) in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. Based on the experience of the previous years, the Company expects to contribute about Rs.1.65 crores to the gratuity fund in the next year. However, the actual contribution by the Company will be based on the actuarial valuation report received from the insurance Company.

Note 31. Contingencies A) Contingent Liabilities

a. Matters wherein management has concluded that the Company’s liability is probable has been provided for . Refer Note 42.

b. Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

ii) a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are disclosed where an inflow of economic benefits is probable. Provision,contingent liabilities, and contingent assets are reviewed at each Balance Sheet date.

c. Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote.This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process, in relation to civil and criminal matters.

Disputed taxes not pr0vided for in respect of:_March 31,1022 March 31, ^

a) Claims related to Income Tax 10.35 10.35

b) Claims related to Custom duty**@ 63.63 63.63

c) Claims related to Service Tax*** 27.27 27.44

Total 101.25_101.42

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has filed an appeal against the said demand, and based on its submissions at such appellate proceedings, management believes that the Company’s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause / demand notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 60.18 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and accordingly the company is confident of recovering the duty paid.

***The Company received show cause cum demand notice from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services.The Company has filed appeals for all such show cause notices /orders received with various authorities. The Company based on the judicial pronouncements and other submissions believes its position is likely to be accepted by the authorities.

B) Commitments for capital contracts

Particulars

As at March 31, 2022

As at March 31, 2021

a) Estimated amount of contracts remaining to be executed on capital expenditure and not provided for

Outstanding commitments on capital contracts

0.17

0.25

Commitments for acquisition of film and program broadcasting rights, Production and distribution related rights

228.75

428.55

Terms & Conditions of Transactions with Related Party

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2022, the company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2021: INR Nil).

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Note 36. Description of valuation techniques used and key inputs to valuation on investment in tax free and taxable bonds:

The valuation for tax free bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has disclosed fair value of the tax free bonds using IMaCS standard methodology which captures the market condition as on given day of valuation on T 1 basis.

The Company has no restrictions on the disposal of its tax free bonds.

Significant unobservable Inputs:

The I ndependent valuer has made detailed study based on standards methodoloy for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also considered with market participant to understand the movement in levels. In the case of liquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried forward.

The group’s investment properties consists of office premises/ commercial properties let out on lease.

As at March 31,2022 and March 31,2021, the fair values of the properties are Rs.103.57 crores and Rs.67.28 crores respectively.

These valuations are based on valuations performed by an registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company has fair valued the office premises and commercial property let out on lease using Market approach method

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depreciation and other leasehold improvements made by the Company to the respective properties.

Note 38. Financial risk management objectives and policies

The group''s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 two types of risk: currency risk and other price risk, such as equity price risk. The value of financial instruments may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. Financial instrument affected by market risk includes investment in equity instruments etc.

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. As per the Forex policy, the Company, takes forward contract for transactions where the foreign currency risk on account of movement in exchange rate expected to be high and which is material to the Company. The impact of foreign exchange rate fluctuations is evaluated by assessing its exposure to exchange rates risks. Exposure to foreign exchange fluctuation risks is with monetary receivables / payables denominated in USD, CAD, ZAR and SGD.

The Company''s prime source of liquidity is cash and cash equivalents and the cash flow generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2022, the Company had a working capital of Rs.4,359.83 crores (March 31, 2021 - Rs.4,134.02 crores) including cash and cash equivalents of Rs.509.95 crores (March 31,2021 - Rs.461.28 crores) and current investment of Rs.2,391.70 crores (March 31,2021 - Rs. 2,393.25 crores ).

As of March 31,2022 and March 31,2021 there are no material liability which is outstanding. Accordingly, no liquidity risk is perceived.

Note 39. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s 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. The Company’s policy for capital management aims to enhance capital efficiency by the long-term improvement of its value through business growth, while maintaining a sound financial structure. Indicators for monitoring the capital management include total equity attributable to owners of the parent and ROCE (ratio of Profit before taxes to total equity attributable to owners of the parent).

Reason for change more than 25%

Current Ratio - Increase in Current Ratio is due to higher current tax provision in the previous year as the Company had opted to settle earlier year tax demand under Direct Tax Vivad se Vishwas Act, 2020 which had been reduced in the current year due to tax remittance.

Trade Payable Turnover Ratio - The Ratio for the financial year ended March 31,2021 was lower than normal levels because of the Covid induced impacts on production of serials/movies/other programming during the most months of that financial year. The operations stabilized during the subsequent financial year ended March 31,2022, and the ratio has risen as expenses on content acquisitions have normalised at pre-pandemic levels.

Return on Investment - Quoted in active market - During the year ended March 31, 2022, the debt markets were extremely volatile which necessitated certain mark to market provisions. Further on account of the uncertainty, the Company decided to hold most of its investments in short term papers on which yields are much lower.

Note 43. The Company has no borrowings or charge created as at March 31,2022 and March 31,2021. In earlier years, the Company has registered "Satisfaction of Charges" with Registrar of Companies (ROC) in respect of 3 charges amounting to Rs.0.29 Crores; However these charges are appearing as "open" in MCA website due to non updation and the Company is following up with MCA for necessary corrections.

Note 44. Impact of COVID-19 on its financial statements

The outbreak of COVID -19 pandemic and consequent lock down has impacted the regular business operations of the Company in the initial quarter. The financial statements for the year ended March 31, 2022 are therefore not comparable with those for the earlier periods presented. The Company has assessed the impact of the pandemic on its financial statements / position based on the internal and external information, to the extent known and available up to the date of approval of these financial statements and based on the current estimates, the Company expects no further adjustments to the carrying amounts as at March 31,2022 of the investments, intangible assets, receivables and other financial assets. This assessment and the outcome of the pandemic as regards the aforesaid matters is highly dependent on the circumstances / developments, as they evolve in the subsequent periods.

Note 45. Approval of financial statements

The standalone financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors at their meeting held on May 27, 2022.


Mar 31, 2021

Note 7.3.1- Investments in Bharat bonds - ETF

The Group holds 2,50,000 Bharat Bonds Exchange Traded Fund issued by Edelweiss Mutual Fund ("issuer"), having face value of Rs. 1000/- per bond. These bonds listed on the Stock Exchange, carry the highest credit rating of AAA. These bonds have a defined maturity period and will mature on April, 2023 and at maturity, Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the debentures till maturity or upon the sale of the same to another investor before the debentures are redeemed by the issuer.

The Company has irrevocably designated the debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Note 7.3.2 - Investment in Nippon India ETF Nifty SDL-2026 units issued by Nippon India Mutual Fund

During the current year, the Company invested in the long term 744,079 units of Nippon India ETF Nifty SDL- 2026 issued by Nippon India Mutual Fund ("issuer"), having face value of Rs.10/- per unit. These units are listed on the Stock Exchange and proceeds from the sale of these units would predominantly be utilized for investment into State Development Loans (SDLs) representing Nifty SDL Apr 2026 Top 20 Equal Weight Index. The units have a defined maturity period and will mature on 30th April, 2026. Upon maturity, the Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the unit till maturity or upon the sale prior to the maturity.

During the current year, the Company invested in the long term 978,260 units of Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 issued by Nippon India Mutual Fund ("issuer"), having face value of Rs.10/- per unit. These units are listed on the Stock Exchange and proceeds from the sale of these units would predominantly be utilized for investment into Central Public Sector Enterprises (CPSEs), Public Financial Institutions(PFIs) and State Development Loans (SDLs) of Top 5 States / union Territory representing Nifty CPSE Bond Plus SDL Sep 2024, 50:50 Index. The units have a defined maturity period and will mature on 30th September, 2024. Upon maturity, the Company will get back the investments along with return indicated. The return on this investment will be realized either by holding the unit till maturity or upon the sale prior to the maturity.

The Company holds 250 redeemable non-convertible debentures issued by Axis Finance Ltd ("issuer"), having face value of Rs. 10,00,000 /- debenture and the principal is protected at maturity. These debentures listed on the National Stock Exchange, carry the highest credit rating of AAA and will be redeemed on June 30, 2022 at a price being the last traded (closing) price of 6.45 Gsec 2049 as on 30th May 2022. The return on this investment will be realised either by holding the debentures till maturity or upon the sale of the same to another investor before the debentures are redeemed by the issuer.

The Company has irrevocably designated these debentures to be subsequently measured at FVTPL, in order to eliminate measurement inconsistency.

Fair value hierarchy disclosures for investment in Non Convertible debentures have been provided in Note 35.

(ii) Term / Rights attached to Equity Shares

The Company has one class of equity shares having a face value of Rs. 5.00 each. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2021 ,The Board of Directors have declared an interim dividend of Rs. 5.00 per share (100%) at their Board meeting held on February 8,2021. (March 31,2020: Rs. 25.00/-per share)

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. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Disclosure for Ind AS 115:

Trade Receivables and Contract assets / liabilities

Trade receivable and Unbilled revenue : The Company classifies the right to consideration in exchange for deliverables as contract receivable / unbilled revenue.

A receivable is a right to consideration that is unconditional upon passage of time. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset. Trade receivable and unbilled revenues are presented net of impairment in Note 10 and Note 9.2 respectively.

Deferred income / unearned revenue : Billings in excess of revenue recognised are disclosed as “Deferred Revenues” under other current liabilities - Note 19; As against the opening balance of deferred revenue of Rs. 11.25 crores, revenue recognised during the year amounts to Rs. 10.66 crores;

‘"Taxes relating to earlier years" represents income tax determined by the Income Tax Authorities based on the Company''s application under the Direct Tax Vivad se VishwasAct, 2020, in respect of pending income tax litigations pertaining to Financial years 2003-04 to 2016-17 amounting to Rs.236.66 crores and provision created on similar basis for the subsequent financial years 2017-18 to 2019-20 amounting to Rs.136.98 crores and recorded by the Company in the current financial year. This has been done inter alia to reduce pending income tax litigation in respect of the claims under Income Tax Act,1961 and de-risking the Company’s financial position, notwithstanding the fact that the Company’s position have consistently been upheld in the past by Appellate Authorities.

29.5. The average incremental borrowing rate applied to lease liabilities is 10.50%

29.6. Ind AS 116 resulted in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments.

Note 30. Employee benefit plansA) Defined Contribution plans

i) Contribution to Provident Fund : Contributions towards Employees Providend Fund made to the Regional / Employee Provident Fund are recognised as expenses in the year in which the services are rendered.

ii) Contribution to Employee State Insurance : Contributions to Employees State Insurance Scheme are recognised as expense in the year in which the services are rendered.

B) Defined benefit plan - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on cessation of employment at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company (LIC) in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

a. Matters wherein management has concluded that the Company’s liability is probable has been provided for. Refer Note 38.

b. Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

ii) a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are disclosed where an inflow of economic benefits is probable. Provision, contingent liabilities, and contingent assets are reviewed at each Balance Sheet date.

c. Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote.This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process, in relation to civil and criminal matters.

* During the Financial year, to inter alia reduce pending income tax litigation in respect of the claims under Income Tax Act, 1961, the Company had made necessary applications under the Direct Tax Vivad se VishwasAct, 2020 in respect of the Financial years 2003-04 to 2016-17. The same have been approved by the Income Tax Department based on which taxes demanded have been recorded in full as required and accounted for in the books of accounts as of March 31,2021 resulting in significant drop in disputed income taxes as at March 31,2021. Rs.204.02crores has also been since paid.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has filed an appeal against the said demand, and based on its submissions at such appellate proceedings, management believes that the Company’s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause / demand notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 60.18 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and accordingly the company confident of recovering the duty paid.

***The Company received show cause cum demand notice from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices /orders received with various authorities. The Company based on the judicial pronouncements and other submissions believes its position is likely to be accepted by the authorities.

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

There have been no transfers between Level 1 and Level 2 during the period.

Note 35.1 Description of valuation techniques used and key inputs to valuation on investment in tax free bonds:

The valuation for tax free bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has disclosed fair value of the tax free bonds using IMaCS standard methodology which captures the market condition as on given day of valuation on T 1 basis.

The Company has no restrictions on the disposal of its tax free bonds.

Significant unobservable Inputs:

The Independent valuer has made detailed study based on standards methodoloy for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also considered with market participant to understand the movement in levels. In the case of liquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried forward.

The Company’s investment properties consists of office premises let out on lease.

As at March 31, 2021 and March 31, 2020, the fair values of the properties are Rs.67.28 crores and Rs.61.20 crores respectively.

These valuations are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of investment properties. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties orfor repairs, maintenance and enhancements.

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depreciation and other leasehold improvements made by the Company to the respective properties.

Note 36. Financial risk management objectives and policies

The Company''s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 two types of risk: currency risk and other price risk, such as equity price risk. The value of financial instruments may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. Financial instrument affected by market risk includes investment in equity instruments etc.

Liquidity risk

The Company''s prime source of liquidity is cash and cash equivalents and the cash flow generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2021, the Company had a working capital of Rs.4,160.67 crores (March 31, 2020 - Rs.3,460.24 crores) including cash and cash equivalents of Rs.461.28 crores (March 31, 2020 - Rs.402.48 crores) and current investment of Rs.2,393.25 crores (March 31,2020 - Rs. 1,957.95 crores).

As of March 31,2021 and March 31,2020 there are no material liability which is outstanding. Accordingly, no liquidity risk is perceived.

Note 37. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s 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. The Company’s policy for capital management aims to enhance capital efficiency by the long-term improvement of its value through business growth, while maintaining a sound financial structure. Indicators for monitoring the capital management include total equity attributable to owners of the parent and ROE (ratio of Profit before taxes to total equity attributable to owners of the parent).

Note 39. Impact of COVID-19 on its financial statements

The outbreak of CO VID -19 pandemic and consequent lockdown has impacted the regular business operations of the Company. The financial statements for the year ended March 31,2021 are therefore not comparable with those for the earlier periods presented. The Company has assessed the impact of the pandemic on its financial statements / position based on the internal and external information, to the extent known and available up to the date of approval of these financial statements and based on the current estimates, the Company expects no further adjustments to the carrying amounts as at March 31,2021 of the investments, intangible assets, receivables and other financial assets. This assessment and the outcome of the pandemic as regards the aforesaid matters is highly dependent on the circumstances / developments, as they evolve in the subsequent periods.

Note 40. Approval of financial statements

The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors at their meeting held on June 11,2021.


Mar 31, 2019

NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2019

(All amounts are in crores of Indian Rupees, unless otherwise stated)

Note 28. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent 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 of the parent 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 followinq reflects the income and share data used in the basic and diluted EPS computations:

Year Ended

March 31, 2019

March 31, 2018

Profit after tax (Rs. in crores)

1,394.86

1,093.04

Weighted average number of shares

- Basic

39,40,84,620

39,40,84,620

- Diluted

39,40,84,620

39,40,84,620

Earning per share of Rs. 5.00 each

- Basic

35.39

27.74

- Diluted

35.39

27.74

Note 29. Operating lease disclosures Company as a lessee -

a) Lease commitment for transponders

The Company has entered into operating leases on KU band Satellite transponders on non cancellable operating lease, with lease terms between 1 and 5 years.

The Company has paid Rs.22.21 crores (March 31, 2018: Rs.22.42 crores) during the year towards minimum lease payment.

The Operating lease agreements, are renewable on a periodic basis and can be extended upto a maximum of 5 years from their respective dates of inception. There are no price escalation clause in the agreement.

Future minimum rentals payable under non-cancellable operating leases as at March 31, 2019 are as follows:

Year Ended

March 31, 2019

March 31, 2018

Within one year

22.11

17.33

After one year but not more than five years

23.11

39.00

More than five years

-

-

45.22

56.33

b) Other operating lease commitments

The Company has entered into operating lease arrangements for office premises. The leases are non-cancellable / lock in period for a period of 2 to 3 years and after which it may be renewed / cancellable based on the mutual agreement of the parties.

The Company has paid Rs.1.54 crores (March 31, 2018: Rs.0.84 crores) during the year towards minimum lease payment.

Future minimum rentals payable under non-cancellable operating leases as at March 31, 2019 are as follows:

Year Ended

March 31, 2019

March 31, 2018

Within one year

0.85

1.03

After one year but not more than five years

0.71

0.22

More than five years

-

-

1.56

1.25

Lease rentals paid during the year in respect of cancellable operating lea

6.35

6.69

Note 30. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on cessation of employment at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company (LIC) in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

Statement of Profit and Loss

Particulars

Year ended March 31, 2019

Year ended March 31, 2018

Recognized in profit or loss:

Current service cost

2.08

2.05

Net Interest income on benefit obligation / assets

0.08

(0.12)

Recognized in other comprehensive income:

Remeasurement gains / (losses) in other comprehensive income

arising from changes in demographic assumptions

0.06

0.28

Remeasurement gains / (losses) in other comprehensive income arising from changes in financial assumptions

0.04

(0.77)

Experience adjustments

0.68

1.00

Return on Plan Assets (greater) / less than Discount rate

0.05

0.10

Recognized in other comprehensive income

0.83

0.61

Net benefit expense

2.16

1.93

Particulars

As at March 31, 2019

As at March 31, 2018

Defined benefit obligation

15.91

13.16

Fair value of plan assets

13.43

12.07

Plan Liability / (Asset)

2.48

1.09

Changes in the present value of the defined benefit obligation are as follows:

Particulars

As at March 31, 2019

As at March 31, 2018

Opening defined benefit obligation

13.16

11.93

Current service cost

2.08

2.05

Interest cost

0.95

0.82

Remeasurement gains / (losses) on obligation

0.78

0.50

Benefits paid

(1.06)

(2.14)

Closing defined benefit obligation

15.91

13.16

Changes in the fair value of plan assets are as follows:

Particulars

As at March 31, 2019

As at March 31, 2018

Fair value of planned assets at the beginning of the year

12.07

11.42

Expected return on plan assets

0.93

0.94

Contributions

1.59

1.96

Benefits paid

(1.13)

(2.14)

Remeasurement gains / (losses) on plan assets

(0.03)

(0.11)

Fair value of plan assets at the end of the year

13.43

12.07

The principal actuarial assumptions used in determining gratuity obligation for the company''s plans are shown below:

Particulars

As at March 31, 2019

As at March 31, 2018

Discount rate

7.52%

7.55%

Expected rate of return on assets

7.52%

8.25%

Employee turnover

9.32%

10.00%

Mortality rates

Indian Assured

Indian Assured

Lives Mortality (2006-08)

Lives Mortality (2006-08)

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. Based on the experience of the previous years, the Company expects to contribute about Rs. 2.16 crores to the gratuity fund in the next year. However, the actual contribution by the Company will be based on the actuarial valuation report received from the insurance company.

The major categories of plan assets of the fair value of the total plan assets are as follows:

Investments details:

Funds with LIC Total

Gratuity plan

March 31, 2019

March 31, 2018

13.43

12.07

13.43

12.07

The Company contributes all ascertained liabilities towards gratuity to the Sun TV Network Ltd Employees Group Gratuity Trust and the Trustees also administer the said contributions so made to the trust. As of March 31, 2019 and March 31, 2018 the plan assets have been primarily invested in insurer managed funds.

A quantitative sensitivity analysis for significant assumption as at March 31, 2019 is as shown below:

Gratuity plan: Assumptions

March 31, 2019

Discount rate

Future salary increases

Sensitivity Level Impact on defined benefit obligation

1% increase 1% decrease

1% increase

1 % decrease

(1.14)

1.29

1.14

(1.04)

A quantitative sensitivity analysis for significant assumption as at March 31, 2018 is as shown below:

March 31, 2018

Assumptions

Discount rate

Future salary increases

Sensitivity Level

1% increase

1 % decrease

1% increase

1 % decrease

Impact on defined benefit obligation

(0.78)

0.87

0.74

(0.68)

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Maturity profile of defined benefit obligation:

March 31, 2019

March 31, 2018

Expected contribution to the plan for the next annual reporting period

2.16

2.04

1 to 5 Years

6.06

6.12

6 to 10 Years

3.80

3.35

Total expected payments

12.02

11.51

The average duration of the defined benefit plan obligation at the end of the reporting period is 7.98 years (March 31, 2018 : 6.85 years).

Note 31. Contingencies A) Contingent Liabilities

a. Matters wherein management has concluded that the Company''s liability is probable has been provided for. Refer Note 38.

b. Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

ii) a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are disclosed where an inflow of economic benefits is probable. Provision, contingent liabilities, and contingent assets are reviewed at each Balance Sheet date.

c. Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process, in relation to civil and criminal matters.

Disputed taxes not provided for in respect of:

March 31, 2019

March 31, 2018

a) Claims related to Income Tax*

736.32

542.43

b) Claims related to Custom duty**@

63.63

63.63

c) Claims related to Service Tax***

25.46

25.66

Total

825.41

631.72

*The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the concerned authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has filed an appeal against the said demand, and based on its submissions at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause / demand notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 60.18 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and accordingly the company confident of recovering the duty paid.

***The Company received show cause cum demand notice from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices / orders received with various authorities. The Company based on the judicial pronouncements and other submissions believes its position is likely to be accepted by the authorities.

B) Commitments for capital contracts

Particulars

March 31, 2019

March 31, 2018

a) Estimated amount of contracts remaining to be executed on capital expenditure and not provided for

Outstanding commitments on capital contracts

0.31

0.63

Commitments for acquisition of film and program broadcasting rights

231.29

272.68

Note 32 Related party transactions Names of the related parties

Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

Enterprises in which Key Management Personnel or their relatives have significant influence

Kal Comm Private Limited

Sun Foundation

Kal Cables Private Limited

Murasoli Maran Family Trust

Sun Direct TV Private Limited

Kal Media Services Private Limited

Udaya FM Private Limited

Kal Airways Private Limited

Sun Distribution Services Private Limited

Network Cable Solutions Private Limited

Sun Business Solutions Private Limited

Gemini TV Distribution Services Private Limited

Kal Publications Private Limited

Subsidiary Company

Kal Radio Limited

Joint Venture / Associates of the Joint Venture

South Asia FM Limited

Digital Radio (Mumbai) Broadcasting Limited

Asia Radio Broadcast Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Digital Radio (Delhi) Broadcasting Limited

Optimum Media Services Private Limited

South Asia Multimedia Private Limited

Deccan Digital Networks (Hyderabad) Private Limited

AV Digital Networks (Hyderabad) Private Limited

Metro Digital Networks (Hyderabad) Private Limited

Key Management Personnel

Mr. Kalanithi Maran - Executive Chairman

Mr. K. Vijaykumar - Managing Director and Chief Executive Officer (upto March 31, 2019)

Mr. R. Mahesh Kumar- President (Managing Director with effect from April 1, 2019)

Mrs. Kavery Kalanithi - Executive Director

Mr. V.C. Unnikrishnan - Chief Financial Officer

Mr. R. Ravi - Company Secretary

Directors

Mr. S. Selvam - Non Executive Director

Mr. J. Ravindran - Independent Director

Mr. M.K. Harinarayanan - Independent Director

Mr. Nicholas Martin Paul - Independent Director

Mr. R. Ravivenkatesh - Independent Director

Relatives of Key Management Personnel

Mrs. Mallika Maran

Ms. Kaviya Kalanithi Maran (Executive Director with effect from April 1, 2019)

Terms & Conditions of Transactions with Related Party

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2019, the company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2018: INR Nil).

Transactions and balances with related parties

Particulars

Enterprises in which Key Management Personnel or their relatives have significant influence

Subsidiary/ Joint Ventures / Associates of the Joint Venture

Key Managerial Personnel / Relatives of Key Managerial Personnel / Directors

31.03.2019

31.03.2018

31.03.2019

31.03.2018

31.03.2019

31.03.2018

Income:

Subscription Income

Sun Distribution Services Private Limited

155.55

240.28

-

-

-

-

Sun Direct TV Private Limited

278.39

232.84

-

-

-

-

Kal Media Services Private Limited

135.55

82.43

-

-

-

-

Gemini TV Distribution Services Private Limited

59.73

-

-

-

-

-

Advertising Income

Kal Publications Private Limited

0.30

0.35

-

-

-

-

Income from IPL

Sun Direct TV Private Limited

-

3.00

-

-

-

-

Digital Radio (Delhi) Broadcasting Limited

-

-

3.55

3.00

-

-

Digital Radio (Mumbai) Broadcasting Limited

-

-

2.43

2.00

-

-

Kal Radio Limited

-

-

-

2.00

-

-

Digital Radio (Kolkata) Broadcasting Limited

-

-

2.21

2.00

-

-

Income from Movie distribution

Sun Business Solutions Private Limited

51.06

-

-

-

-

-

Finance Income

Sun Direct TV Private Limited

9.98

7.92

-

-

-

-

Rental and Business Support Income

Kal Radio Limited

-

-

0.77

0.68

-

-

South Asia FM Limited

-

-

0.30

0.26

-

-

Sun Direct TV Private Limited

1.89

1.81

-

-

-

-

Kal Publications Private Limited

1.36

1.30

-

-

-

-

Others

0.91

0.96

-

-

-

-

Movie Content Income

Sun Direct TV Private Limited

4.43

9.34

-

-

-

-

Program production expenses

Kal Publications Private Limited

4.38

4.39

-

-

-

-

Pay channel service charges

Sun Distribution Services Private Limited

51.34

20.73

-

-

-

-

Kal Media Service Private Limited

-

5.71

-

-

-

-

Legal and Professional Fees

Mrs. Mallika Maran

-

-

-

-

0.02

0.02

Rent Expense

Kal Publications Private Limited

2.90

2.79

-

-

-

-

Expenditure on Corporate Social Responsibility

Sun Foundation

16.66

11.26

-

-

-

-

Selling Expenses

Kal Publications Private Limited

0.07

0.02

-

-

-

-

Sun Business Solutions Private Limited

0.51

-

-

-

-

-

Sun Direct TV Private Limited

1.41

-

-

-

-

-

Remuneration paid (including ex-gratia/bonus)

Salary - Mr. Kalanithi Maran

-

-

-

-

13.87

13.83

Salary - Mrs. Kavery Kalanithi

-

-

-

-

13.87

13.83

Salary - Mr. K Vijaykumar

-

-

-

-

0.96

0.95

Salary - Mr. V.C. Unnikrishnan

-

-

-

-

1.02

0.90

Salary - Mr. R Ravi

-

-

-

-

0.26

0.23

Salary - Ms. Kaviya Kalanithi Maran

-

-

-

-

0.28

0.28

Salary - Mr. R. Mahesh Kumar

-

-

-

-

2.06

1.61

Ex-gratia / Bonus- Mr. Kalanithi Maran

-

-

-

-

73.63

73.67

Ex-gratia / Bonus- Mrs. Kavery Kalanithi

-

-

-

-

73.63

73.67

Ex-gratia / Bonus- Mr. K. Vijaykumar

0.33

0.26

Sitting Fees Paid to Directors

Mr. S. Selvam

-

-

-

-

0.01

0.01

Mr. J. Ravindran

-

-

-

-

0.03

0.03

Mr. M.K. Harinarayanan Mr. Nicholas Martin Paul

-

-

-

-

0.04 0.05

0.03 0.03

Mr. R.Ravivenkatesh

-

-

-

-

0.04

0.03

Dividends Paid

Mr. Kalanithi Maran

-

-

-

-

369.46

295.56

Reimbursement/(Recovery) of Cost of shared services (Net)

Kal Publications Private Limited

0.26

0.22

-

-

-

-

Balances Outstanding: Accounts Receivable

Sun Direct TV Private Limited

174.48

151.32

-

-

-

-

Sun Distribution Services Private limited

43.74

76.40

-

-

-

-

Kal Media Services Private Limited

64.97

41.65

-

-

-

-

Gemini TV Distribution Services Private Limited

35.68

-

-

-

-

-

Sun Business Solutions Private Limited

3.97

-

-

-

-

-

Kal Publications Private Limited

0.05

-

-

-

-

-

Other Receivables

Kal Publications Private Limited

0.38

0.56

-

-

-

-

Sun Direct TV Private Limited

0.32

2.50

-

-

-

-

Kal Radio Limited

-

-

0.08

0.07

-

-

South Asia FM Limited

-

-

0.05

0.03

-

-

Digital Radio (Delhi) Broadcasting Limited Others

0.08

0.08

-

0.05

-

-

Rental and other deposits

Kal Publications Private Limited

0.06

0.06

-

-

-

-

Security Deposit received

Kal Radio Limited

-

-

0.00

0.00

-

-

Kal Publications Private Limited

0.01

0.01

-

-

-

-

Accounts Payable / Other Current Liabilities

Sun Distribution Services Private Limited

30.24

4.21

Kal Publications Private Limited

0.80

0.68

-

-

-

-

Kal Media Service Private Limited

-

1.13

-

-

-

-

Kal Radio Limited

-

-

0.08

0.09

-

-

Sun Direct TV Private Limited

1.63

-

-

-

-

-

Remuneration / Ex-gratia / Bonus Payable

Mr. Kalanithi Maran

-

-

-

-

74.78

74.83

Mrs. Kavery Kalanithi Mr. K Vijaykumar Ms.Kaviya Kalanithi Maran Mr. R. Mahesh Kumar

-

-

-

-

74.78 0.33 0.02 0.35

74.83 0.29 0.02 0.34

Mr. V.C. Unnikrishnan

-

-

-

-

0.21

0.20

Mr. R Ravi

0.05

0.04

Note: As the liabilities for gratuity and leave encashment are provided on actuarial basis for the Company as a whole, the amounts pertaining to the Directors are not included above.

NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2019

(All amounts are in crores of Indian Rupees, unless otherwise stated)

Note 33. Segment information

Based on the internal reporting provided to the chief operating decision maker, Media and Entertainment is the only operating segment for the company.

Geographic information

Year ended

Revenue from customers

March 31, 2019

March 31, 2018

India

3,446.32

2,691.27

Outside India

216.95

171.18

Total revenues per statement of profit or loss

3,663.27

2,862.45

There are no sales to external customers more than 10% of the total revenue.

As at

Non-current operating assets

March 31, 2019

March 31, 2018

India

1,153.51

1,267.80

Rest of the world

-

-

Total

1,153.51

1,267.80

Non-current assets for this purpose consist of property, plant and equipment, investment properties, intangible assets, capital work in progress and other non current assets (other than financial instruments).

Note 34. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

Carrying value

Fair value

March 31, 2019

March 31, 2018

March 31, 2019

March 31, 2018

Financial assets (Non Current & Current)

Other investments (Tax free bonds)

240.09

193.41

238.92

194.85

Investments in Non Convertible debentures

res 25.41

-

25.41

-

Investment in Mutual funds and quoted

equity shares

2,071.44

1,505.10

2,071.44

1,505.10

2,336.94

1,698.51

2,335.77

1,699.95

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Note 35. Fair value hierarchy

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities:

Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2019:

Fair Value Measurement using

Particulars

Date of Valuation

Total

Quoted Price in active markets (Level 1)

Significant observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Asset measured at fairvalue: FVTPL financial investments:

Quoted Equity Shares

March 31, 2019

14.99

14.99

-

-

Investment in Non Convertible debentures

March 31, 2019

25.41

25.41

-

-

Unquoted Mutual Funds

March 31, 2019

2,056.45

2,056.45

-

-

Assets for which fair values are disclosed:

Tax free bonds (unquoted) (Refer Note 35.1 )

March 31, 2019

238.92

238.92

Investment Properties (Refer Note 35.2)

March 31, 2019

70.39

-

70.39

-

There have been no transfers between Level 1 and Level 2 during the period.

Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2018:

Fair Value Measurement using

Particulars

Date of Valuation

Total

Quoted Price in active markets (Level 1)

Significant observable inputs (Level 2)

Significant Unobservable inputs (Level 3)

Asset measured at fairvalue: FVTPL financial investments:

Quoted Equity Shares

March 31, 2018

11.48

11.48

-

-

Unquoted Mutual Funds

March 31, 2018

1,493.62

1,493.62

-

-

Assets for which fair values are disclosed:

Tax free bond (unquoted) (Refer Note 35.1 )

March 31, 2018

194.85

-

194.85

-

Investment Properties (Refer Note 35.2)

March 31, 2018

69.22

-

69.22

-

There have been no transfers between Level 1 and Level 2 during the period.

Note 35.1 Description of valuation techniques used and key inputs to valuation on investment in tax free bonds:

The valuation for tax free bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has disclosed fair value of the tax free bonds using IMaCS standard methodology which captures the market condition as on given day of valuation on T 1 basis.

The Company has no restrictions on the disposal of its tax free bonds. Significant unobservable Inputs:

The Independent valuer has made detailed study based on standards methodoloy for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also considered with market participant to understand the movement in levels. In the case of liquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried forward.

Note 35.2 Fair value disclosure on Investment properties:

The Company''s investment properties consists of office premises let out on lease. As at March 31, 2019 and March 31, 2018, the fair values of the properties are Rs. 70.39 crores and Rs. 69.22 crores respectively. These valuations are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of investment properties. The valuation model used is in accordance with a method recommended by the International Valuation Standards. The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

Reconciliation of fairvalue:

Particulars

Amount

Opening balance as at April 1, 2017

75.75

Fair value difference

(6.64)

Additions

0.11

Opening balance as at April 1, 2018

69.22

Fair value difference

1.17

Additions

-

Closing balance as at March 31, 2019

70.39

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company has fair valued the office premises property let out on lease using Market approach method.

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depreciation and other leasehold improvements made by the Company to the respective properties.

Note 36. Financial risk management objectives and policies

The Company''s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market Risk

Market risk is the risk that the fairvalue of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as equity price risk. The value of financial instruments may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. Financial instrument affected by market risk includes investment in equity instruments etc.

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. As per the Forex policy, the Company, takes forward contract for transactions where the foreign currency risk on account of movement in exchange rate expected to be high and which is material to the Company. The impact of foreign exchange rate fluctuations is evaluated by assessing its exposure to exchange rates risks. Exposure to foreign exchange fluctuation risks is with monetary receivables / payables denominated in USD, AUD, CAD and GBP.

March 31, 2019

March 31, 2018

Particulars

Foreign Currency


Mar 31, 2018

1. Corporate information

Sun TV Network Limited (''Sun TV'' or ''the Company'') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India. The Company is listed on the Bombay Stock Exchange (''BSE’) and the National Stock Exchange (''NSE’) in India. The Company has its registered office at Murasoli Maran Towers, 73, MRC Nagar Main Road, MRC Nagar, Chennai - 600 028.

The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company also has the license to operate an Indian Premier League (‘IPL’) franchise “Sun Risers Hyderabad”. During the current year, the Company has also launched OTT platform “ SUNNXT”.

These standalone financial statements are approved for issue by the Company’s Board of Directors on May 11, 2018.

As at March 31, 2018 and March 31, 2017, the fair values of the properties are Rs. 69.22 crores and Rs. 75.75 crores respectively.

These valuations are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of investment properties. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company has fair valued the office premises property let out on lease using Market approach method.

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depreciation and other leasehold improvements made by the Company to the respective properties.

Fair value hierarchy disclosures for investment in tax free bonds have been provided in Note 35, other notes relating to fair value disclosure are given below.

The Companies investment in tax free bonds primarily consists of bonds issued by the Government Companies.

The valuation for tax free bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its tax free bonds.

Description of valuation techniques used and key inputs to valuation on investment in tax free bonds:

The Company has disclosed fair value of the tax free bonds using IMaCS standard methodology which captures the market condition as on given day of valuation on T 1 basis.

Significant unobservable Inputs:

The Independent valuer has made detailed study based on standards methodoloy for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also considered with market participant to understand the movement in levels. In the case of liquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried foward.

Trade receivables are non-interest bearing and are generally on terms of 60 to 90 days

Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of the accounts receivable.

Refer note given under impairment of financial assets - 2(r ) - Financial instruments for ECL model adopted by the Company.

(ii) Term/Rights attached to Equity Shares

The Company has one class of equity shares having a face value of Rs. 5.00 each. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2018,The Board of Directors have declared an interim dividend of Rs. 2.50 per share (50%) each at their Board meetings held on August 11, 2017, November 10, 2017, February 9, 2018 and March 12, 2018 respectively. (March 31, 2017: Rs.10.00 /- share)

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. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

There is no overdue amount payable to Micro and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 as at or during the year ended March 31, 2018 & 2017. Accordingly, no interest has been paid / payable to any Micro and Small Enterprises during the current and previous year.

Terms and conditions of the above financial liabilities:

Trade payables are non interest bearing and are normally settled within due dates For terms and conditions with related parties, refer to Note 32

Government grants have been received for import of plant and equipment in the nature of export promotion scheme. There are no unfulfilled conditions or contingencies attached to these grants.

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent 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 of the parent 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.

Note 2. Operating lease disclosures Company as a lessee –

a) Lease commitment for transponders

The Company has entered into operating leases on KU band Satellite transponders on non cancellable operating lease, with lease terms between 1 and 5 years.

The Company has paid Rs.22.42 crores (March 31, 2017: Rs.23.14 crores) during the year towards minimum lease payment.

The Operating lease agreements, are renewable on a periodic basis and can be extended upto a maximum of 5 years from their respective dates of inception. There are no price escalation clause in the agreement.

b) Other operating lease commitments

The Company has entered into operating lease arrangements for office premises. The leases are non-cancellable / lock in period for a period of 2 to 3 years and after which it may be renewed / cancellable based on the mutual agreement of the parties.

The Company has paid Rs.0.84 crores (March 31, 2017: Rs.0.51 crores) during the year towards minimum lease payment.

Future minimum rentals payable under non-cancellable operating leases as at March 31, 2018 are, as follows:

Note 3. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on cessation of employment at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company (LIC) in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. Based on the experience of the previous years, the Company expects to contribute about Rs. 2.00 crores to the gratuity fund in the next year. However, the actual contribution by the Company will be based on the actuarial valuation report received from the insurance company.

The Company contributes all ascertained liabilities towards gratuity to the Sun TV Network Ltd Employees Group Gratuity Trust and the Trustees also administer the said contributions so made to the trust. As of March 31, 2018 and March 31, 2017 the plan assets have been primarily invested in insurer managed funds.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Note 4. Contingencies A) Contingent Liabilities

a. Matters wherein management has concluded that the Company’s liability is probable has been provided for Refer Note 38.

b. Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

ii) a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are disclosed where an inflow of economic benefits is probable. Provision, contingent liabilities, and contingent assets are reviewed at each Balance Sheet date.

c. Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process, in relation to civil and criminal matters.

*The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company’s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the concerned authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has filed an appeal against the said demand, and based on its submissions at such appellate proceedings, management believes that the Company’s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause / demand notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 60.18 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and accordingly the company confident of recovering the duty paid.

***The Company received show cause cum demand notice from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices /orders received with various authorities. The Company based on the judicial pronouncements and other submissions believes its position is likely to be accepted by the authorities.

C) Commitments for other contracts i) Royalty Payable to Ministry of Information and Broadcasting (‘MIB’)

The Company has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay royalty of 4% of gross revenue earned from these FM Operations during the financial year or 2.5 % of One Time Entry Fees paid, whichever is higher to Ministry of Information and Broadcasting.

ii) Franchise rights commitments

From the 2018 I PL season, the Company is required to pay BCCI, license fees at 20% on the income earned by the franchisee for the relevant IPL Season.

Note 5 Related party transactions Names of related parties

Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited

Kal Publications Private Limited

Kal Cables Private Limited

Sun Foundation

Sun Direct TV Private Limited

Murasoli Maran Family Trust

Udaya FM Private Limited

Kal Media Services Private Limited

Sun Distribution Services Private Limited

Kal Airways Private Limited

Sun Business Solutions Private Limited

Network Cable Solutions Private Limited

Subsidiary Company

Kal Radio Limited

Joint Venture

South Asia FM Limited

Digital Radio (Mumbai) Broadcasting Limited

Asia Radio Broadcast Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Digital Radio (Delhi) Broadcasting Limited

Optimum Media Services Private Limited

South Asia Multimedia Private Limited

Associates

Deccan Digital Networks (Hyderabad) Private Limited Metro Digital Networks (Hyderabad) Private Limited AV Digital Networks (Hyderabad) Private Limited

Key Management personnel

Mr. Kalanithi Maran - Executive Chairman

Mr. K. Vijaykumar - Managing Director and Chief Executive Officer

Mr. R. Mahesh Kumar - President

Mrs. Kavery Kalanithi - Executive Director

Mr. V.C. Unnikrishnan - Chief Financial Officer

Mr. R. Ravi - Company Secretary

Mr. S. Selvam - Non Executive Director

Mr. J. Ravindran - Independent Director

Mr. M.K. Harinarayanan - Independent Director

Mr. Nicholas Martin Paul - Independent Director

Mr. R. Ravivenkatesh - Independent Director

Relatives of Key Management personnel

Mrs. Mallika Maran

Ms. Kaviya Kalanithi Maran

Terms & Conditions of Transactions with Related Party

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2018, the company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2017: INR Nil).

Based on the internal reporting provided to the chief operating decision maker, Media and Entertainment is the only operating segment for the company.

Non-current assets for this purpose consist of property, plant and equipment, investment properties, intangible assets, capital work in progress and other non current assets (other than financial instruments).

Note 6. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, Financial guarantee and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

Note 7. Fair value hierarchy

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities:

The Company''s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 two types of risk: currency risk and other price risk, such as equity price risk. The value of financial instruments may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable acuracy. Financial instrument affected by market risk includes investment in equity instruments etc.

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. As per the Forex policy, the Company, takes forward contract for transactions where the foreign currency risk on account of movement in exchange rate expected to be high and which is material to the Company. The impact of foreign exchange rate fluctuations is evaluated by assessing its exposure to exchange rates risks. Exposure to foreign exchange fluctuation risks is with monetary receivables / payables denominated in USD, AUD, CAD and GBP.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017 and as forecasted for volatile currencies.

Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk is equal to the carrying amount of financial assets as of March 31, 2018 and March 31, 2017 respectively.

Liquidity risk

The Company''s prime source of liquidity is cash and cash equivalents and the cash flow generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2018, the Company had a working capital of Rs. 2,481.20 crores (March 31, 2017 - Rs. 1,890.53 crores) including cash and cash equivalents of Rs. 275.23 crores (March 31, 2017 - Rs. 655.16 crores ) and current investment of Rs.1,505.10 crores (March 31, 2017 - Rs. 545.48 crores).

As of March 31, 2018 and March 31, 2017 there are no material liability which is outstanding. Accordingly, no liquidity risk is perceived.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Note 8. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s 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. The Company’s policy for capital management aims to enhance capital efficiency by the long-term improvement of its value through business growth, while maintaining a sound financial structure. Indicators for monitoring the capital management include total equity attributable to owners of the parent and ROE (ratio of net profit to total equity attributable to owners of the parent). The Company''s policy is to keep the ROE between 33% to 38%. The Company has achieved the same over past 2 years.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.


Mar 31, 2017

1. Corporate information

Sun TV Network Limited (‘Sun TV’ or ‘the Company’) was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India. The Company is listed on the Bombay Stock Exchange (‘BSE’) and the National Stock Exchange (‘NSE’) in India. The Company has its registered office at Murasoli Maran Towers, 73, MRC Nagar Main Road, MRC Nagar, Chennai - 600 028.

The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company’s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company also has the license to operate an Indian Premier League (‘IPL’) franchise “Sun Risers Hyderabad”.

The financial statements are approved for issue by the Company’s Board of Directors on May 26, 2017.

Note 2. Investment Properties

As at March 31, 2017, March 31, 2016 and April 01, 2015 the fair values of the properties are Rs.75.75 crores Rs. 67.41 crores and Rs.58.18 crores respectively.

These valuations are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of investment properties. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements Fair value hierarchy disclosures for investment properties have been provided in Note 37.

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company has fair valued the office premises property let out on lease using Market approach method.

Significant unobservable Inputs

The independent valuer has made detailed study of prevailing market rate for the commercial buildings in the areas wherein the office premises property is being let out by the Company. This has been adjusted for amenities, depriciation and other lease hold improvement made by the Company to the respective properties.

The valuations for tax free bonds are based on valuations performed by an accredited independent valuer. The valuer is a specialist in valuing these types of Bonds. The valuation model used is in accordance with a method recommended by the International Valuation Standards.

The Company has no restrictions on the disposal of its tax free bonds

Fair value hierarchy disclosures for investments in tax free bonds have been provided in Note 37.

Description of valuation techniques used and key inputs to valuation on investment in tax free bonds:

The Company has fair valued the tax free bonds using IMaCS standard methodology which captures the market condition has on the given day of valuation on T 1 basis.

Significant unobservable Inputs

The independent valuer has made detailed study based on standard methodology for scrip level valuation and have considered the available secondary market and primary market trades for valuation of bonds on reporting date. Outlier trades if any are identified and excluded. Widespread Polling is also conducted with market participant to understand the movement in levels. In the case of illiquid instruments, the valuation is arrived at based on the value bonds with similar maturity issued by similar issuers or securities are linked to a benchmark and a spread over benchmark is arrived at and the same is carried forward.

(i) Term/Rights attached to Equity Shares

The Company has one class of equity shares having a face value of Rs.5.00 each. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2017, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 10.00 /- share (March 31, 2016: Rs.15.50 /- share)

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. However, no such preferential amounts exists currently.

The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Trade payables

There is no overdue amount payable to Micro and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the company has not paid any interest to any Micro and Small Enterprises during the current and previous year.

Terms and conditions of the above financial liabilities:

Trade payables are non interest bearing and are normally settled within due dates For terms and conditions with related parties, refer to Note 34

Government grants have been received for import of Property, plant & equipment ( PP&E ) in the nature of export promotion scheme. There are no unfulfilled conditions or contingencies attached to these grants. The company is in the process of making necessary applications to obtain related redemption letters from the DGFT.

Government grants have been received for import of Property, plant & equipment ( PP&E ) in the nature of export promotion scheme. There are no unfulfilled conditions or contingencies attached to these grants. The company is in the process of making necessary applications to obtain related redemption letters from the DGFT.

During the previous year, Company’s aircraft sustained damage due to floods in Chennai. The determination of the financial effects thereof was pending as of March 31, 2016 in view of highly technical nature of the assessment involved. Subsequently in the current year, upon completion of such technical assessment, this aircraft has been assessed as being beyond economic repair and declared a total loss. Accordingly, the carrying value of the aircraft as at the date of the incident of Rs. 242.03 crores has been recorded as impairment loss in the previous year. The Company has recognised insurance claim of Rs. 260 crores received from the insurers.The impairment loss on account ofthe damage to the aircraft and related proceeds receivable from the insurance company, as discussed above, have been recorded and disclosed as exceptional item.

The major components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are:

Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31, 2016 and March 31, 2017 :

The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the standard rate of corporation tax in India (34.608%) as follows:

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent 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 of the parent 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.

Note 4. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s Standalone 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.

Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the Standalone Financial Statements:

Amortisation of intangibles

Acquired Satellite Rights for the broadcast of feature films and other long-form programming such as multi-episode television serials are stated at cost. Future revenues cannot be estimated with any reasonable accuracy as these are susceptible to a variety of factors, such as the level of market acceptance of television products, programming viewership, advertising rates etc., and accordingly cost related to film is fully expensed on the date of first telecast of the film and the cost related to program broadcasting rights / multi episodes series are amortized based on the telecasted episodes.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Standalone Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Provision for taxes

The Company’s tax expense for the year is the sum of the total current and deferred tax charges. The calculation of the total tax expense necessarily involves a degree of estimation and judgement in respect of certain items. A deferred tax asset is recognised when it has become probable that future taxable profit will allow the deferred tax asset to be recovered. 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 (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit 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.

Further details about defined benefit obligations are given in note 32.

Note 5. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market.

The Company contributes all ascertained liabilities towards gratuity to the Sun TV Network Limited Employees Group Gratuity Trust. Trustees administer contributions made to the trust. As of March 31, 2017, March 31, 2016 and April 1, 2015, the plan assets have been primarily invested in insurer managed funds.

A quantitative sensitivity analysis for significant assumption as at March 31, 2017 is as shown below:

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Note 6. Commitments and Contingencies

a) Leases

Operating lease commitments — Company as lessee

The Company has entered into operating leases on KU band Satellite transponder on non cancellable operating lease, with lease terms between 1 and 10 years renewable on periodic basis.

The Company has paid Rs.23.14 crores (March 31, 2016: Rs.21.63 crores) during the year towards minimum lease payment

The operating lease arrangements, are renewable on a periodic basis and can be extended upto a maximum of 5 years from their respective dates of inception. There are no price escalation clause in the agreement.

Future minimum rentals payable under non-cancellable operating leases as at March 31, 2017 are, as follows:

b) Contingent Liabilities

i) Matters wherein management has concluded the Company’s liability to be probable and have accordingly provided for in the books. Refer Note 45.

ii) Matters wherein management has concluded the Company’s liability to be possible and have accordingly disclosed below

iii) Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceeding and claims, in different stages of process, in relation to civil and criminal matters.

* The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company’s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company’s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the earlier year, the Company has received a formal show cause notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 60.18 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

***The Company received show cause notice from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices /orders received with various authorities. The Company based on the judicial pronouncements and other arguments believes its position is likely to be accepted by the authorities.

b) Royalty Payable to Ministry of Information and Broadcasting (‘MIB’)

The Company has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay royalty of 4% of gross revenue earned from these FM Operations during the financial year or 2.5 % of One Time Entry Fees paid, whichever is higher to Ministry of Information and Broadcasting.

c) Franchise rights commitments

As per the terms of the franchise agreement entered into by the Company with the BCCI, the Company has a commitment to pay BCCI, Rs. 85.05 crores per annum from 2014 season to 2017 season. From the 2018 IPL season, the Company is required to pay license fees at 20% on the Franchise Income earned during the relevant year from the operation of the IPL franchise to BCCI. In the current year the Company has paid an amount aggregating to Rs. 25.52 crores as franchise license fee for the 2017 IPL season.

d) Financial guarantees

The Company during the year has extended Financial Guarantee to South Asia FM Limited (Joint Venture) for their bank borrowing of Rs.29.50 crores ( March 31, 2016: Nil, April 1, 2015: Nil). The Company has offered its Fixed Deposit of Rs.32.00 crores as a collateral security against such borrowings of the investee. The carrying amounts of the related financial guarantee contracts were Rs.2.91 crores at March 31, 2017 (Also refer note 13 and note 16.)

Note 7 Related party transactions Names of related parties

Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited

Kal Cables Private Limited

Sun Direct TV Private Limited

Udaya FM Private Limited

Sun Distribution Services Private Limited

Sun Business Solutions Private Limited

Kal Publications Private Limited

D.K. Enterprises Private Limited

Sun Foundation

Murasoli Maran Family Trust

Kal Media Services Private Limited

Kal Airways Private Limited

Subsidiary Companies

Kal Radio Limited

Joint Venture

South Asia FM Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

Associates

Deccan Digital Networks (Hyderabad) Private Limited

Metro Digital Networks (Hyderabad) Private Limited

AV Digital Networks (Hyderabad) Private Limited

Key Management personnel

Mr. Kalanithi Maran - Executive Chairman

Mr. K Vijaykumar - Managing Director and Chief Executive Officer

Mr. R Mahesh Kumar - President

Mrs. Kavery Kalanithi - Executive Director

Mr.V C Unnikrishnan - Chief Financial Officer

Mr. R. Ravi - Company Secretary

Mr. S. Selvam - Non Executive Director

Mr. J. Ravindran - Independent Director

Mr. M.K. Harinarayanan - Independent Director

Mr. Nicholas Martin Paul - Independent Director

Mr. R.Ravivenkatesh - Independent Director

Relatives of Key Management personnel

Mrs. Mallika Maran

Ms. Kaviya Kalanithi Maran

Terms & Conditions of Transactions with Related Party

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended March 31, 2017, the company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2016: Nil, April 1, 2015: Nil).

Based on internal reporting provided to the chief operating decision maker, Media and Entertainment is the only operating segment for the company.

Non-current assets for this purpose consist of property, plant and equipment, investment properties, intangible assets, capital work in progress and other non current assets (other than financial instruments).

Note 8. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, Financial guarantee and other current and non current financial liabilities and financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at 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 method and assumptions used to estimate the fair values is the fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities:

Note 9. Financial risk management objectives and policies

The Company’s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 two types of risk: currency risk and other price risk, such as equity price risk. The Value of financial instrument may change as a result of changes in the foreign currency exchange rates, equity price fluctuation, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy .Financial instrument affected by market risk includes invesment in equity instruments etc.

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 Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities.As per the Forex policy, the Company, takes forward contract for transactions where the foreign currency risk on account of movement in exchange rate expected to be high and which is material to the Company. The impact of foreign exchange rate fluctuations is evaluated by assessing its exposure to exchange rates risks. Major exposure to foreign exchange fluctuation risks is with Monetary receivables / payables denominated in USD.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.The sensitivity analysis in the following sections relate to the position as at March 31, 2017, March 31, 2016 and April 1, 2015.

Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk is equal to the carrying amount of financial assets as of March 31, 2017, March 31, 2016 & April 1, 2015 respectively.

Liquidity risk

The Company’s prime source of liquidity is cash and cash equivalents and the cash flow generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2017, the Company had a working capital of Rs.1,890.53 crores (March 31, 2016 - Rs. 1,915.21 crores ; April 1, 2015 - Rs. 1,562.52 crores) including cash and cash equivalents of Rs. 655.16 crores (March 31, 2016 - Rs. 552.93 crores ; April 1, 2015 - Rs. 393.21 crores) and current investment of Rs. 545.48 crores (March 31, 2016 -Rs. 230.59 crores ; April 1, 2015 - Rs. 244.92 crores).

As of March 31, 2017, March 31, 2016 & April 1, 2015, there are no material liability which is outstanding. Accordingly, no liquidity risk is perceived.

Collateral

A collateral on the Fixed Deposit of the Company (amounting to Rs.32.50 crores ) has been made against the loan of Rs. 29.50 crores taken by the Company’s investee (Joint Venture). Refer note 33 (d).

Note 10. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s 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. The Company’s policy for capital management aims to enhance capital efficiency by the long-term improvement of its value through business growth, while maintaining a sound financial structure. Indicators for monitoring the capital management include total equity attributable to owners of the parent and ROE (ratio of net profit to total equity attributable to owners of the parent). The Company’s policy is to keep the ROE between 35% to 38%. The Company has achieved the same over past 2 years.

Note 11. Provisional Attachment order from Enforcement Directorate

During the year, the Hon’ble Special Court hearing the related proceedings in connection with an investigation not involving the Company, passed an order, as a result of which, the provisional attachment stands released. During the previous year, certain Freehold Land and Buildings of the Company aggregating Rs. 266 crores had been provisionally attached vide an order of the Enforcement Directorate, Ministry of Finance, Government of India, (“Enforcement Directorate”), under the prevention of Money Laundering Act, 2002 (“PMLA”). Whilst the appeal process in this matter is pending, Company continues to be in possession of the said properties / deposits / mutual fund investments, the management is confident of a successful outcome from the same and accordingly is of the view that no accounting adjustments are considered necessary in this standalone financial statements in this regard.

Note 12. First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) and Companies Account (Amendment) rules, 2016, as amended.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions :

1 Ind AS 16 - Property, plant and equitment are opted to be carried as recognised in its previous GAAP financials as deemed cost at the transition date. The Company has elected to continue with the carrying value as at 1st April, 2015 for all of its investment properties, Intangible assets and property plant & equipment as recognised in its Previous GAAP financial as deemed cost at the transition date.

2 Ind AS 103 - Business Combinations has not been applied to amalgamation / merger, which are are considered businesses under Ind AS that occurred before date of transition i.e April 1, 2015.

The Company has used this exemption for the merger of Gemini TV Private Limited and the Satellite Television Business of Udaya TV Private Limited in earlier years.

Estimates

The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from Impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2015 (i.e. the date of transition to Ind-AS) and as of March 31, 2016.

Effect of the Transition to Ind AS

Reconciliations of the Company’s balance sheets prepared under Indian GAAP and Ind AS as of April 1, 2015 and March 31, 2016 are also presented in Note 42. Reconciliations of the Company’s income statements for the year ended March 31, 2016 prepared in accordance with Indian GAAP and Ind AS in Note 43.

Notes: (a) Deferred credit terms with customers

Under Indian GAAP, the Company accounted for revenue from operations at its transaction value. Under Ind AS, where the inflow of cash is deferred, revenue is determined at its fair value by discounting all future receipts using an imputed rate of interest. The difference between the transaction value and discounted value is recognized as interest income on EIR basis.

(b) Multiple arrangements

Under Indian GAAP, the Company has accounted for various components of a multiple-element arrangement as a single contract at its transaction value. However, under Ind AS, the Group has identified separately each components of a combined transaction and recognized revenue on each component at its fair value.

(c) Investments carried at FVTPL

Under Indian GAAP, the Company accounted for investments in unquoted mutual funds as investment measured at the lower of cost and market value. Under Ind AS, the Group has measured such investments at fair value. The difference between fair value and Indian GAAP carrying amount has been recognized in statement of profit and loss account as fair value gain/loss.

(d) Actuarial gain/loss on defined benefit plans

Under Indian GAAP, the Company recognized actuarial gains/losses and expected rate of return on defined benefit plans in the income statement. Under Ind AS, the Company has recognized the actuarial gains/losses and the return on assets (excluding interest) relating to retirement benefit plans in other comprehensive income. However, this has no impact on total comprehensive income and total equity.

(e) Impairment of financial assets

Under Indian GAAP, provisioning on trade receivables was made on incurred loss model. Under Ind AS, the provision has been created based on the expected credit loss model.

(f) Government Grants

Under Indian GAAP, the Company has accounted for fixed assets net of the import duty exemption provided. Under Ind AS, the Government grant is to be separately identified and recognised as deferred revenue and fixed assets is to be accounted at the gross value including the duty saved portion. The income is to be recognised over the life of the respective assets and depreciation is to be charged on the grossed value of fixed assets.

(g) Other financial assets

Under Indian GAAP, the Company measures the rental deposits paid to the lessor and rental deposits received from customers at transaction value. Under Ind AS, the deposits have been measured at fair value and the difference between the fair value and the transaction cost has been recorded as prepaid lease rent / deferred revenue.

(h) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

On transitional adjustments, the corresponding deferred taxes have been recognized.

(i) Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(j) Investment Properties

Under Indian GAAP, investment properties were presented as part Property, plant and equipment. Under Ind AS, investment properties are required to be separately presented on the face of the Balance Sheet.

(k) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

Note 13. Disclsoure On Specified Bank Notes (SBNs)

During the year, the Company had specified bank notes(SBNs) and other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBNs) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:

For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

Note 14. As required by Accounting Standard (Ind - AS-37) “Provisions, Contingent Liabilities and Contingent Assets” the details of Provisions are set out as under.


Mar 31, 2016

1 Litigations & Claims

Note 1 :

a) Matters wherein management has concluded the Company''s liability to be probable and have accordingly provided for in the books. Refer Note 37.

b) Matters wherein management has concluded the Company''s liability to be possible and have accordingly disclosed under Note (2) Contingent Liability

c) Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceeding and claims, in different stages of process, in relation to civil and criminal matters.

* The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2013-14. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company''s claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the company has received a formal show cause notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 61.08 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

***The Company received show cause notices from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices / orders received with various authorities. The Company based on the judicial pronouncements and other arguments believes its position is likely to be accepted by the authorities.

2 Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on non - cancellable operating lease. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out certain parts of its owned corporate office building to its related parties. These non cancellable leases have remaining terms of between 1 and 10 years. As per para 46 of Accounting Standard 19 Leases issued by the Institute of Chartered Accountants of India, the Gross block value of such leased property determined based on the area occupied aggregates to Rs. 19.25 crores (Previous Year - 19.92 crores) and the accumulated depreciation and net book value of the same was amounted to Rs. 6.42 crores (Previous Year - 5.80 crores) and Rs. 12.83 crores (Previous Year - 14.12 crores) respectively.

3 Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

4 Related party transactions

Names of related parties

1. Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited Kal Airways Private Limited

Kal Cables Private Limited Kal Publications Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Udaya FM Private Limited Sun Foundation

Sun Distribution Services Private Limited Murasoli Maran Family Trust

Sun Business Solutions Private Limited Kal Media Services Private Limited

SpiceJet Limited (Upto February 23, 2015)

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates of South Asia FM Limited

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5. Key Management personnel

Mr. Kalanithi Maran – Executive Chairman

Mr. K Vijaykumar – Managing Director and Chief Executive Officer

Mrs. Kavery Kalanithi – Executive Director

Mr. V C Unnikrishnan – Chief financial Officer

Mr. R. Ravi – Company Secretary

6. Relatives of Key Management personnel

Mrs. Mallika Maran

5 Segment information

The Company considers business segments as its primary segment. The Company''s operations predominantly relate to Media and Entertainment and, accordingly, this is the only primary reportable segment.

6 Investment in Subsidiaries operating in Radio business

Under the relevant frameworks of the Ministry of Information and Broadcasting of the Government of India (''MIB''), the Company, its subsidiaries and its investees involved in FM Radio operations had submitted applications to migrate existing FM Radio licenses (including six of which expired on March 31, 2015 and others expiring on various dates in FY 2016-17 and thereafter) from Phase II to the Phase III licensing regime as well as applications for participating in the e-auction process for new FM Radio frequencies in the Phase III licensing regime. The Company has direct / indirect investments in FM Radio operations aggregating Rs 620.20 crores, the recoverability of which is dependent upon maintaining profitable operations.

Two investees of the Company were permitted to participate in e-auction process based on a favourable order of the Delhi High Court. The Union of India''s appeal there against has been dismissed by the Hon''ble Supreme Court, thereby setting aside the Government''s rejection of the applications citing security reasons; Subsequent to the balance sheet date, (a) two investees have been granted licences in respect of 3 stations, for which the Grant of Permission Agreement (''GOPA'') has been signed; (b) the MIB has offered migration of existing licenses owned by the Company''s investees to the Phase III licensing regime subject to payment of the requisite fees and compliance with other terms and conditions, which the management is confident of complying with.

With respect to the Company and its subsidiaries, (a) An interim order of the Madras High Court had permitted these Companies to participate in the e-auctions in Phase III. (b) With reference to migration from Phase II to Phase III stated above, the relevant companies have been permitted to continue existing operations by way of interim orders by the Madras High court. While the matter continue to be sub-judice at the Madras High Court, having regard to the recent judgment of the Supreme Court as well post-year end events, in relation to investees of the Company, management is confident of receiving the required approvals against the applications by the Company and its subsidiaries, to enable continued profitable operations of these FM Radio stations and the recoverability of the Company''s investments, direct and indirect, in its radio operations.

In the third quarter of the current year, the Company has also made additional investments of Rs 157.80 crores in South Asia FM Limited ("SAFM"), a subsidiary, against a rights issue by SAFM towards funding new licences and the migration plan as per Phase III licensing regime.

7 Provisional Attachment order from Enforcement Directorate

During the quarter ended June 30, 2015, the Company and one of its subsidiaries, South Asia FM Limited ("SAFM"), received an order from the Enforcement Directorate, Ministry of Finance, Government of India, ("Enforcement Directorate") provisionally attaching certain Freehold Land and Buildings of the Company aggregating Rs. 266 crores, and fixed deposits with banks and mutual fund investments of SAFM aggregating Rs. 21.34 crores, under the Prevention of Money Laundering Act, 2002 ("PMLA") in connection with an investigation not involving the Company. With reference to the Provisional Attachment Order ("PAO") under PMLA, the Company has filed a Special Leave Petition ("SLP") challenging the said Order before the Hon''ble Supreme Court of India which has stayed the adjudication proceedings under the PMLA and accordingly the entities continue to be in full possession of these assets. Based on legal advise, management is confident that the said PAO is not legally tenable and is confident of a favourable outcome in due course and, accordingly, is of the view that no accounting adjustments are considered necessary in these financial statements in this regard.

8 Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2015

1. Corporate Information

Sun TV Network Limited ('Sun TV' or 'the Company') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language. The Company also has the license to operate an Indian Premier League ('IPL') franchise "Sun Risers Hyderabad".

2. Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2015, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 11.25 /- share (March 31,2014: Rs. 9.50 /- share).

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. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to six to eight times the duty saved to be fulfilled within a period of six to eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 42.28 crores (March 31,2014 Rs. 64.19 crores )

4. Royalty Payable to Ministry of Information and Broadcasting ('MIB')

The Group has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Group is required to pay royalty of 4% of gross revenue earned from these FM Operations during the financial year or 2.5 % of One Time Entry Fees paid, whichever is higher to Ministry of Information and Broadcasting, as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting ('MIB') dated September 4, 2006 ("GOPA").

5. Franchise rights commitments

As per the terms of the franchise agreement entered into by the Company with the BCCI, the Company has a commitment to pay BCCI, Rs. 85.05 crores per annum for the 2014 season to 2017 season. From the 2018 IPL season, the Company is required to pay license fees at 20% on the Franchise Income earned during the relevant year from the operation of the IPL franchise to BCCI. In the current year the Company has paid an amount aggregating to Rs. 25.52 crores as franchise license fee for the 2015 IPL season.

6. Litigations & Claims

a) Matters wherein management has concluded the Company's liability to be probable and have accordingly provided for in the books. Refer Note 38.

b) Matters wherein management has concluded the Company's liability to be probable and have accordingly disclosed under Note (2) Contingent Liability

c) Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceeding and claims, in different stages of process, in relation to civil and criminal matters.

7. Contingent liability

Particulars March 31, 2015 March 31, 2014

Income Tax* 331.14 276.86

Customs Duty** @ 63.63 63.63

Service tax *** 28.26 -

423.03 340.49

* The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company's appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2012-13. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company's claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed the Company has received a formal show cause notice containing a provisional demand of Rs. 63.13 crores in the previous year. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 61.08 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

***The Company received show cause notices from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices / orders received with various authorities. The Company based on the judicial pronouncements and other arguments believes its position is likely to be accepted by the authorities.

Operating leases (As a lessor)

The Company has leased out certain parts of its office buildings to its related parties. These non cancellable leases have remaining terms of between 1 and 10 years. As per para 46 of Accounting Standard 19 Leases issued by the Institute of Chartered Accountants of India, the gross block value of such leased property determined based on the area occupied aggregates to Rs.19.92 crores and the accumulated depreciation and net book value of the same was amounted to Rs.5.80 crores and Rs.14.12 crores respectively.

8. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

9. Related party transactions

Names of related parties

1. Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited SpiceJet Limited (Upto February 23, 2015)

Kal Cables Private Limited Kal Publications Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Udaya FM Private Limited Sun Foundation

Sun Distribution Services Private Murasoli Maran Family Trust Limited

Sun Business Solutions Private Kal Media Services Private Limited Limited Kal Airways Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited Asia Radio Broadcast Private Limited Digital Radio (Kolkata) Broadcasting Limited Metro Digital Networks (Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman

Mrs. Kavery Kalanithi - Executive Director

Mr. K Vijaykumar - Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

10. Provisional Attachment order from Enforcement Directorate

Subsequent to March 31 2015, the Company and one of its subsidiaries, South Asia FM Limited ("SAFM"), have received an order from the Enforcement Directorate, Ministry of Finance, Government of India, provisionally attaching Freehold Land and Buildings of the Company aggregating Rs.266.76 crores and fixed deposits with banks and mutual fund investments aggregating Rs. 21.34 crores of SAFM, under the Prevention of Money Laundering Act, 2002 in connection with an investigation not involving the Company / SAFM. Based on the legal opinion received, the Management is confident that the said Provisional Attachment Order by the Enforcement Directorate is not tenable against the Company and / or SAFM. The Company has filed a Writ Petition challenging the said Order and the matter is pending before the Hon'ble High Court of Madras and management is confident of a favourable outcome in due course. Accordingly, the management is of the view that no accounting adjustments are considered necessary in these financial statements in this regard. Furthermore, the Company / the Group continue to be in full possession of the assets sought to be attached and continue to use the same in the normal course of its business.

11. Investment in Subsidiaries operating in Radio business

The Ministry of Information and Broadcasting of the Government of India ('MIB') has, during the year, invited applications for the e-Auction of Private FM Radio Phase - III. The Company, its subsidiaries and its investees have filed applications to migrate their existing FM Radio licenses (including three of which expired on 31 March 2015 and others expiring on various dates in FY 2016-17 and thereafter) from Phase II to the Phase III licensing regime ("FM License Migration Applications"), which are currently being processed by the MIB and their communication is awaited. Management is confident of receiving the approvals for the Company's FM License Migration Applications, which is essential for the continued operations of these FM Radio stations and the recoverability of the Company's investments, direct and indirect, in its radio operations / investees. Accordingly, no impairment to asset values and / or diminution other than temporary in the value of the related assets/investments, have been considered necessary in this regard.

12. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year's classification.

As per our report of even date.


Mar 31, 2014

1. Corporate Information

Sun TV Network Limited (''Sun TV'' or ''the Company'') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE'') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company''s film production / distribution division ''Sun Pictures'' undertakes production / distribution of movies in the Tamil language. The Company also has the license to operate an Indian Premier League (''IPL'') franchise "Sun Risers Hyderabad".

2 Current investments

Current investments (valued at lower of cost and fair value, unless stated otherwise)

3. Capital and other commitments

b) Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to six times the duty saved to be fulfilled within a period of six to eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 641.9 million (March 31, 2013 Rs. 1,135.3 million)

c) Royalty Payable to Ministry of Information and Broadcasting (''MIB'')

The Company has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay royalty of 4% on the Gross revenues earned during the financial year from these FM operations, as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting (''MIB'') dated September 4, 2006 ("GOPA").

d) Franchise rights commitments

As per the terms of the franchise agreement entered into by the Company with the BCCI, the Company has a commitment to pay BCCI, Rs. 850.5 million per annum for the 2014 season to 2017 season. From the 2018 IPL season, the Company is required to pay license fees at 20% on the Franchise Income earned during the relevant year from the operation of the IPL franchise to BCCI. In the current year the Company has paid an amount aggregating to Rs. 255.2 million as franchise license fee for the 2014 IPL season.

4. Contingent liabilities

Particulars March 31, 2014 March 31, 2013

Income Tax* 2,768.6 2,039.8

Customs Duty**@ 636.3 615.8

Total 3,404.9 2,655.6

*The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the current year. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2008- 09. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company''s claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 5.0 million on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause notice containing a provisional demand of Rs. 631.3 million. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 610.8 million under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

The Company is involved in certain legal proceedings and claims in relation to civil and criminal matters. These legal proceedings are currently pending adjudication before various courts and tribunals. Based on a review of the relevant facts and judicial precedents and as advised of its legal counsels, management is confident of succeeding in these litigations and consequently no provision has been made in the financial statements.

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on non - cancellable operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

6. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

7. Related party transactions

Names of related parties

1. Controlling Party Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited Sun Foundation

SpiceJet Limited Murasoli Maran Family Trust

Udaya FM Private Limited D.K. Enterprises Private Limited

Sun Direct TV Private Limited Kungumam Nithiyagam Private Limited

Sun Distribution Services Private Limited Kal Comm Private Limited

Kal Investments (Madras) Private Limited Kal Media Services Private Limited

Kal Airways Private Limited Kal Cables Private Limited

Kal Holdings Private Limited Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran – Executive Chairman

Mrs. Kavery Kalanithi – Executive Director

Mr. K Vijaykumar – Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

8. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

1. Corporate Information

Sun TV Network Limited (''Sun TV'' or ''the Company'') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE'') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company''s film production / distribution division ''Sun Pictures'' undertakes production / distribution of movies in the Tamil language. During the current year, the Company has acquired license to operate an Indian Premier League (''IPL'') franchise in the city of Hyderabad from the Board of Control for Cricket in India (''BCCI'').

2. Contingent liabilities

March 31, 2013 March 31, 2012

Income Tax* 2,039.8 1,488.6

Customs Duty**@ 615.8 5.0

Total 2,655.6 1,493.6

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by the appellate authority in the current year. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 5.0 million on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ In response to enquiries by the Customs Authorities on certain customs duty exemptions availed by the Company in the previous years, the Company has deposited a sum of Rs. 610.8 million under protest in the current year, pending final resolution of the matter. The Management is advised by Senior Counsels that appropriate legal remedies are available and accordingly is confident of recovering the same.

3. Dues to Micro and Small Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro and Small Enterprises during the current and previous year.

4. Un-hedged foreign currency balances

The Company does not use any derivative instruments to hedge its foreign currency exposure. The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

6. Employees'' benefit plan - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market.The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

7. Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited Sun Foundation

Spicejet Limited Murasoli Maran Family Trust

Udaya FM Private Limited S & S Textiles

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Kungumam Publications Private Limited Kungumam Nithyagam Private Limited

Sun Distribution Services Private Limited Kal Comm Private Limited

(Formerly Sun 18 Media Services South Private Limited) Kal Media Services Private Limited

Kal Investments (Madras) Private Limited Kal Cables Private Limited

Kal Airways Private Limited Sun Business Solutions Private Limited

Kal Holdings Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

Sun TV Network Europe Limited (upto May 07, 2012)

4. Associates

AV Digital Networks (Hyderabad) Private Limited Asia Radio Broadcast Private Limited Digital Radio (Kolkata) Broadcasting Limited Metro Digital Networks (Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman Mrs. Kavery Kalanithi - Executive Director

Mr. K Vijaykumar - Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

8. Franchise License Fee

On October 25, 2012 the Company acquired the right to operate a franchise in the Indian Premier League (''IPL'') for a consideration of Rs. 850.5 million, payable annually for a period of 5 years as per the terms of the franchise agreement entered into by the Company with the Board of Control for Cricket in India (''BCCI''). The annual franchise fee payable to the BCCI as above would be recognized as an expense on an accrual basis in accordance with terms of the Company''s agreement with the BCCI.

9. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2012

1. Corporate Information

Sun TV Network Limited ('Sun TV' or 'the Company') was incorporated on December 18,1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India.The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom,Europe, Middle East.United States.Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language.

2. Share capital

a. Rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 9.50/share (March 31,2011: Rs. 8.75/share).

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. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Capital and other commitments

a) Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs.2,251.2 million (March 31, 2011 Rs.2,028.8 million).

b) License Fee to Ministry of Information and Broadcasting ('MIB')

The Company has obtained licenses to carry on FM radio operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay license fee at 4% on the Gross revenues earned during the financial year from these FM operations or 10% of the Reserve OTEF ('One Time Entry Fee') for the respective city, whichever is higher as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting ('MIB') dated September 2006 ("GOPA").

4. Contingent liabilities

March 31, 2012 March 31, 2011

Income Tax* 1,488.6 719.4

Customs Duty** 5.0 5.0

Total 1,493.6 724.4

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Company's claim is likely to be accepted by Appellate authorities. Further, management believes that any disallowance of such expenses would result in deductible timing differences.

** The Company has received demand for differential customs duty on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such Appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

5. Dues to Micro and Small Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro and Small Enterprises during the current and previous year.

6. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

7. Employee benefit plans-Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market. The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

8. Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited

Spicejet Limited

Udaya FM Private Limited

Sun Direct TV Private Limited

Kungumam Publications Private Limited

Sun 18 Media Services South Private Limited

Kal Comm Private Limited

Kal Airways Private Limited

Kal Holdings Private Limited

Sun Foundation

Murasoli Maran Family Trust

S & S Textiles

D.K. Enterprises Private Limited

Kungumam Nithyagam Private Limited

Kal Investments (Madras) Private Limited

Kal Media Services Private Limited

Kal Cables Private Limited

Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited _

Kal Radio Limited_

Sun TV Network Europe Limited _

4. Associates

AV Digital Networks(Hyderabad)Private Limited Asia Radio Broadcast Private Limited Digital Radio(Kolkata) Broadcasting Limited Metro Digital Networks(Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman (Chairman and Managing Director till April 19, 2012)

Mrs. Kavery Kalanithi - Executive Director (Joint Managing Director till April 19, 2012)

Mr. K Vijaykumar - Managing Director and Chief Executive Officer (Chief Operating Officer till April 19, 2012)

6. Relatives of Key Management personnel

Mrs. Mallika Maran

9. Prior year comparatives

Till the previous year, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. The current year's financial statements have been prepared and presented in accordance with the requirements of the revised Schedule VI, as notified under the Companies Act, 1956 and applicable to the Company. The Company has also reclassified previous year figures in accordance with these requirements.


Mar 31, 2011

1.1 Background

Sun TV Network Limited ('Sun TV or 'the Company') was incorporated on December 18,1985 as Sumangali Publications Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language.

During current year, the Company released a blockbuster movie simultaneously in three languages titled 'Enthiran' in Tamil and 'Robot' in Telugu and Hindi'. The Company earned revenues of Rs.179 crores, including Rs. 8 crores expected towards satellite rights which has not been included in the revenues in current year. The Company has spent Rs.132 crores on the production of this blockbuster.

22.3 Quantitative information as per the Act

Due to the nature of its business, the requirements relating to the quantitative details of sales and the information under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company except to the extent disclosed in these financial statements.

1.2 Contingent Liabilities not provided for

31.03.2011 31.03.2010

Income Tax* 719.4 587.7

Customs Duty** 5.0 5.0

724.4 592.7

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Company's claim is likely to be accepted by appellate authorities.

** The Company has received demand for differential customs duty on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

1.3 Dues to Micro, Small and Medium Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current and previous year.

1.4 Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

22.15 Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period 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, such as supply and demand in the employment market.

1.5 Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited

Kal Cables Private Limited

Kal Investments (Madras) Private Limited

Network Cable Solutions Private Limited

Sun Direct TV Private Limited

Sun Academy Private Limited

Kungumam Publications Private Limited

Udaya FM Private Limited

Sun 18 Media Services South Private Limited

Kal Airways Private Limited

Kal Holdings Private Limited

Kungumam Nithyagam Private Limited

Kal Publications Private Limited

D.M.S Entertainment Private Limited

HFO Entertainment Private Limited

D.K. Enterprises Private Limited

Sun Foundation

Murasoli Maran Family Trust

Kal Media Services Private Limited

Spicejet Limited

Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited

Kal Radio Limited

Sun TV Network Europe Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia.Radio Broadcast Private Limted

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5. Key Management personnel

Mr. Kalanithi Maran - Chairman and Managing Director

Mrs. Kavery Kalanithi - Joint Managing Director

6. Relatives of Key Management personnel

Mrs. Mallika Maran

1.6 Export Obligation

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 2,028.8 million (March 31,2010 Rs. 243.9 million).

1.7 Prior year comparatives

Prior year figures have been regrouped wherever necessary to conform to the current year's classification.


Mar 31, 2010

1 Background

Sun TV Network Limited (Sun TV or the Company) was incorporated on December 18,1985 as Sumangali Publications Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Companys flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is-also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Companys film production/ distribution division Sun Pictures undertakes production / distribution of movies in the Tamil language.

2. Quantitative information as per the Act

Due to the nature of its business, the requirements relating to the quantitative details of sales and the information under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company except to the extent disclosed in these financial statements.

3. Contingent Liabilities not provided for

31.03.2010 31.03.2009

Income Tax 587.7 190.0

Customs Duty 5.0 --

592.7 190.0

The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Companys claim is likely to be accepted by appellate authorities.

4. Dues to Micro, Small and Medium Enterprises

Management has determined that there were no balances outstanding as at the beginning of the year and no transactions entered with Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, during the current year, based on the information available with the Company as at March 31,2010 and March 31,2009.

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

6. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

1. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited Kungumam Nithyagam Private Limited

Kal Cables Private Limited Kal Publications Private Limited

Kal Investments (Madras) Private Limited D.M.S Entertainment Private Limited

Network Cable Solutions Private Limited HFO Entertainment Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Sun Academy Private Limited Sun Foundation

Kungumam Publications Private Limited Murasoli Maran Family Trust

Udaya FM Private Limited Kal Media Services Private Limited

2. Subsidiary Companies

South Asia FM Limited

Kal Radio Limited

Sun TV Network Europe Limited

3. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

4. Key Management personnel

Mr. Kalanithi Maran - Chairman and Managing Director Mrs. Kavery Kalanithi - Joint Managing Director

5. Relatives of Key Management personnel

Mrs. Mallika Maran

7. Export Obligation

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 243.9 million (March 31,2009 Rs. Nil).

8. Prior year comparatives

Prior year figures have been regrouped wherever necessary to conform to the current years classification.

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