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Notes to Accounts of TV Today Network Ltd.

Mar 31, 2015

1. Employee Stock Option Plan

The Company instituted the Employee Stock Option Plan (TVTN ESOP 2006) to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 was approved by the board of directors in their meeting held on 21st August, 2006 and by shareholders in their meeting held on 28th September, 2006, for grant of 2,900,000 options, representing one share for each option upon exercise by the employees of the Company, at an exercise price determined by the Board / Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance criteria. The Optionee may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly, the Company under the intrinsic value method, as permitted by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India, has recognized the excess of the market price over the exercise price of the option amounting to Rs. (-) 280,531 (Previous Year Rs. (-) 674,496) as expense during the year. Further, the liability as at March 31,2015 in respect of Employee Stock Options Outstanding is Rs. 450,000 (Previous Year Rs. 3,037,500). The balance deferred compensation expense of Rs. Nil (Previous Year Rs. 101,969) will be amortized over the remaining vesting period of options.

2. Segment Reporting

The Company has considered the business segment as the primary reporting segment on the basis that the risks and returns of the Company are primarily determined by the nature of services. Consequently, the geographical segment has been considered as a secondary segment.

The business segments have been identified on the basis of :

* the nature of services

* the risks and returns

* internal organization and management structure and

* the internal performance reporting systems

The business segments comprise of the following :

* Television Broadcasting

* Radio Broadcasting

3. Related Party Disclosures

(a) Names of related parties and nature of relationship

(i) Where control exists:

Holding company : Living Media India Limited

Ultimate holding company: World Media Private Limited (Refer Note - a)

Subsidiary : T.V. Today Network (Business) Limited (Refer Note - b)

(ii) Other related parties with whom transactions have taken place during the year:

Fellow subsidiaries : Thomson Press (India) Limited Today Merchandise Private Limited Radio Today Broadcasting Limited Mail Today Newspapers Private Limited World Media Trading Limited ITAS Media Private Limited Today Retail Network Private Limited

Key management personnel: Mr. Aroon Purie (Managing Director) (KMP) Ms. Koel Purie Rinchet (Whole Time Director)

Entity over which Key Care Today Fund Management Personnel (KMP) exercise significant influence

4. Dues to Micro and Small Enterprises

Based on information available with the Company, there are no outstanding dues to micro and small enterprises as at March 31,2015. No interest has been paid / is payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

40. The Company as a strategic decision considered entering into the print media and, accordingly, acquired in earlier years some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent valuer, the Company acquired the shares through direct subscription and also through purchase from existing shareholders at a cost of Rs. 455,212,482. Though, Mail Today is presently incurring losses, the Company is confident of its long-term strategic value and it has also received a guarantee from its holding company, Living Media India Limited, for indemnifying any loss to the Company arising from the sale of the said investment, based on which the carrying value of the said investment is considered appropriate.

5. The Company has decided to enter into digital news space to tap significant growth potential and business opportunity in digital news industry. Consequently, the Company has acquired digital rights of its news channels from its holding company, Living Media India Limited, for a consideration of Rs. 387,500,000. Such consideration has been recognized as an intangible asset, to be amortized over a period of 10 years.

6. Previous Year Figures

Previous year figures have been reclassified to conform to this year''s classification.


Mar 31, 2014

1. Contingent Liabilities

Particulars As at March 31, 2014 March 31, 2013 Amount (Rs.) Amount (Rs.)

Claims against the Company not acknowledged as debts:

Income Tax Matters : 3,499,211 99,519,245

The Company has received demand notices from the Income Tax department, which the Company has contested. In the opinion of the management, no liability is likely to arise on account of such demand notices.

Other Matters :

(1) Claim from Prasar Bharti towards up linking charges :- 18,989,020 26,486,082 Provision made in the books on an estimated basis is Rs. 59,679,814 (Previous Year Rs. 48,276,437). In the opinion of the management, based on its understanding of the case and as advised by their counsel, the provision made in the books is considered to be adequate.

(2) Claim from Phonographic Performance Limited (PPL) towards royalty 17,733,300 - for use of PPL''s sound recordings over Company''s radio stations :- Provision made in the books on an estimated basis is Rs. 2,531,401 (Previous Year Rs. Nil). In the opinion of the management, based on its understanding of the case and as advised by their counsel, the provision made in the books is considered to be adequate.

(3) The Company has received legal notice of claims / lawsuits filed against it in respect of programmes aired on its television channels. In the opinion of the management, no liability is likely to arise on account of such claims / lawsuits.

Guarantees:

Bank guarantees 23,083,379 25,069,899

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

2. Employee Stock Option Plan

The Company instituted the Employee Stock Option Plan (TVTN ESOP 2006) to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 was approved by the board of directors in their meeting held on 21st August, 2006 and by shareholders in their meeting held on 28th September, 2006, for grant of 2,900,000 options, representing one share for each option upon exercise by the employees of the Company, at an exercise price determined by the Board / Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance criteria. The Optionee may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly, the Company under the intrinsic value method, as permitted by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India, has recognized the excess of the market price over the exercise price of the option amounting to Rs. (-) 674,496 (Previous Year Rs. (-) 649,153) as expense during the year. Further, the liability as at March 31, 2014 in respect of Employee Stock Options Outstanding is Rs. 3,037,500 (Previous Year Rs. 4,440,000). The balance deferred compensation expense of Rs. 101,969 (Previous Year Rs. 357,473) will be amortized over the remaining vesting period of options.

3. Segment Reporting

The Company has considered the business segment as the primary reporting segment on the basis that the risks and returns of the Company are primarily determined by the nature of services. Consequently, the geographical segment has been considered as a secondary segment.

The business segments have been identified on the basis of :

- the nature of services

- the risks and returns

- internal organization and management structure and

- the internal performance reporting systems

The business segments comprise of the following :

- Television Broadcasting

- Radio Broadcasting

4. Related Party Disclosures

(a) Names of related parties and nature of relationship

(i) Where control exists:

Holding company: Living Media India Limited

Ultimate holding company: World Media Private Limited (Refer Note - a)

Subsidiary: T.V. Today Network (Business) Limited (Refer Note - b)

Company under common control: Integrated Databases India Limited (Refer Note - a)

(ii) Other related parties with whom transactions have taken place during the year:

Fellow subsidiaries: Thomson Press (India) Limited

Today Merchandise Private Limited

Radio Today Broadcasting Limited

Mail Today Newspapers Private Limited

World Media Trading Limited

ITAS Media Private Limited

Today Retail Network Private Limited

Key management personnel (KMP): Mr. Aroon Purie (Managing Director)

Ms. Koel Purie Rinchet (Whole Time Director)

5. Dues to Micro and Small Enterprises

Based on information available with the Company, there are no outstanding dues to micro and small enterprises as at March 31, 2014. No interest has been paid / is payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

6. The Company has as a strategic decision considered entering into the print media. In this regard, it has acquired some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent valuer, the Company acquired some stake through direct subscription and also through purchase from existing shareholders amounting to Rs. 455,212,482. Though Mail Today is in the initial stages of operations and is presently incurring losses, the Company, based on projections / independent valuation, is confident of the future Profitability of Mail Today and consequently of the carrying value of the investment.

7. Previous Year Figures

Previous year figures have been reclassified to conform to this year''s classification.


Mar 31, 2013

1. Contingent Liabilities

Particulars As at

March 31, 2013 March 31, 2012 Amount (Rs.) Amount (Rs.)

Claims against the Company not acknowledged as debts:

(A) Income Tax Matters : 99,519,245 82,707,017 The Company has received demand notices from the Income Tax department, which the Company has contested. In the opinion of the management, no liability is likely to arise on account of such demand notices.

(B) Other Matters: (1) Claim from Prasar Bharti towards uplinking charges 26,486,082 24,532,931

The total claim as at March 31, 2013 amounted to Rs. 74,762,519. Pending final outcome in respect of such dispute, the Company is carrying provision on an estimated basis amounting to Rs. 48,276,437, including Rs. 1,953,160 provided for in the current year. In the opinion of the management, based on its understanding of the case and as advised by their counsel, the provision made in the books is considered adequate and the balance amount is considered as a contingent liability.

(2) The Company has received legal notice of claims / lawsuits filed against it in respect of programmes aired on its television channels. In the opinion of the management, no liability is likely to arise on account of such claims / lawsuits.

Note:- (a) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

2. Employee Stock Option Plan

The Company instituted the Employee Stock Option Plan (TVTN ESOP 2006) to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 had been approved by the board of directors in their meeting held on 21st August, 2006 and by shareholders in their meeting held on 28th September, 2006, for grant of 2,900,000 options, representing one share for each option upon exercise by the employees of the Company, at an exercise price determined by the Board / Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance criteria. The Optionee may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly, the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. (-) 649,153 (Previous Year Rs. (-) 819,263) as expense during the year. Further, the liability as at March 31, 2013 in respect of Employee Stock Options Outstanding is Rs. 4,440,000 (Previous Year Rs. 5,662,500). The balance deferred compensation expense of Rs. 357,473 (Previous Year Rs. 930,820) will be amortized over the remaining vesting period of options.

3. Related Party Disclosures

(a) Names of related parties and nature of relationship

(i) Where control exists:

Holding Company: Living Media India Limited

Ultimate Holding Company: World Media Private Limited (Note-1)

Subsidiary: T.V. Today Network (Business) Limited (Note-2)

(ii) Other Related Parties with whom transactions have taken place during the year: Fellow Subsidiaries: Thomson Press (India) Limited

Today Merchandise Private Limited Radio Today Broadcasting Limited Mail Today Newspapers Private Limited

Company under Common Control: Integrated Databases India Limited (Note-1)

Key Management Personnel (KMP): Mr. Aroon Purie (Managing Director)

Ms. Koel Purie Rinchet (Whole Time Director)

4. Operating Leases

The Company has entered into lease transactions mainly for office premises and company leased accommodation for employees. Terms of lease include terms of renewal, increase in rent in future period and terms of cancellation. The operating lease payments and lease / sub-lease rentals received recognized in the Statement of Profit and Loss amount to Rs. 95,828,741 (Previous Year Rs. 148,493,097) and Rs. 21,375,991 (Previous Year Rs. 726,024, netted off against rent expense) respectively.

5. Dues to Micro and Small Enterprises

Based on information available with the Company, there are no outstanding dues to Micro and Small enterprises as at March 31, 2013. No interest is paid / payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

6. The Company has as a strategic decision considered entering into the print media. In this regard, it has acquired some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent valuer, the Company acquired some stake through direct subscription and also through purchase from existing shareholders amounting to Rs. 455,212,482. Though, Mail Today is in the initial stages of operations and is presently incurring losses, the Company, based on independent projections, is confident of the future profitability of Mail Today and consequently of the carrying value of the investment.

7. Previous Year Figures

Previous year figures have been reclassified to conform to this year''s classification.


Mar 31, 2012

(a) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. However, no such preferential amounts exist currently.

(b) Shares reserved for issue under Options

Refer Note 27 for details of shares to be issued under the Employee Stock Option Plan

(a) Cash Credit facilities have been secured by way of first charge against the whole of book-debts.

(b) Working Capital Loan has been secured by (hypothecation deed pending to be executed as at year end)

(i) Charge on book debts of the Company (both present and future) on a first pari passu basis with another bank.

(ii) Exclusive charge on proposed rental income received from all other India Today group companies for NOIDA Property.

(iii) Negative lien on the NOIDA property.

1. Contingent Liabilities

Particulars As at

March 31, 2012 March 31, 2011 Amount (Rs.) Amount (Rs.)

Claims against the Company not acknowledged as debts:

Income Tax Matters: 82,707,017 87,411,396

The Company has received demand notices from the Income Tax department, which the Company has contested. In the opinion of the management, no liability is likely to arise on account of such demand notices.

Other Matters:

(1) Claims from Prasar Bharti 24,532,931 32,713,529

The Company received claims from Prasar Bharti in earlier years towards unlinking charges and telecast fees, which were dis puted by the Company.

Prasar Bharti also raised claims towards interest for non-payment of dues from time to time, which were also disputed by the Company.

During the year, the telecast fees matter with Prasar Bharti has been settled vide Delhi High Court order dated February 24, 2012. The total amount payable by the Company as per the said order is Rs. 30,184,406 (net of interest earned on amount already deposited with the Court). The Company had paid and expensed Rs. 23,320,971 till previous year and therefore, the charge to the Statement of Profit and Loss in the current year amounts to Rs. 6,864,406, included in "Others" under "Other Current Liabilities" (Note 9).

In relation to the up linking charges matter, the total claim as at March 31, 2012 amounted to Rs. 70,856,205. Pending final outcome in respect of such dispute, the Company is carrying provision on an estimated basis amounting to Rs 46,323,274, including Rs. 10,315,922 provided for in the current year. In the opinion of the management, based on its understanding of the case and as advised by their counsel, the provision made in the books is considered adequate and the balance amount is considered as a contingent liability.

(2) The Company has received legal notice of claim / lawsuit filed against it in respect of programmes aired on the Channels. In the opinion of the management, no liability is likely to arise on account of such claim / lawsuit.

Guarantees:

Bank Guarantees 25,069,899 28,554,699

(a) It is not possible for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

2. Employee Stock Option Plan

The Company instituted the Employee Stock Option Plan (TVTN ESOP 2006) to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 had been approved by the board of directors in their meeting held on 21st August, 2006 and by shareholders in their meeting held on 28th September, 2006, for grant of 2,900,000 options, representing one share for each option upon exercise by the employees of the Company, at an exercise price determined by the Board / Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance criteria. The Optioned may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly, the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. (-)819,263 (Previous Year Rs. 1,556,816) as expense during the year. Further, the liability as at March 31, 2012 in respect of Employee Stock Options Outstanding is Rs. 5,662,500 (Previous Year Rs. 8,692,500). The balance deferred compensation expense of Rs. 930,820 (Previous Year Rs. 3,141,557) will be amortized over the remaining vesting period of options.

3. Operating Leases

The Company has cancellable lease arrangements mainly for office premises and company leased accommodation for employees. Terms of lease include terms of renewal, increase in rents in future period and terms of cancellation. The operating lease payments recognized in the Statement of Profit and Loss amount to Rs. 148,493,097 (Previous Year Rs. 125,811,031), net of sub-lease rental received Rs. 726,024 (Previous Year Rs. 572,926).

4. Dues to Micro and Small Enterprises

Based on information available with the Company, there are no outstanding dues to Micro and Small enterprises as at March 31, 2012. No interest is paid / payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

5. The Company has as a strategic decision considered entering into the print media. In this regard, it has acquired some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent value, the Company acquired some stake through direct subscription and also through purchase from existing shareholders amounting to Rs. 455,212,482. Though, Mail Today is in the initial stages of operations and is presently incurring losses, the Company, based on independent projections, is confident of the future profitability of Mail Today and consequently of the carrying value of the investment.

6. Previous Year Figures

The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.-


Mar 31, 2011

1. Capital Commitments / Contingent Liabilities:

(a) Estimated amounts of contract remaining to be executed on capital account, net of advances, not provided for Rs. 299,551,612 (Previous year Rs. 235,817,263)

(b) The Company received claims from Prasar Bharti in earlier years towards uplinking charges and telecast fees which were disputed by the Company. Prasar Bharti also raised claims towards interest for non payment of dues from time to time, which also were disputed by the Company. Total ciaims as at 31st March 2011 amounted to Rs. 100,197,555 and the disputes were referred to various legal forums. Pending final outcome in respect of such disputes, the Company made provision on an estimated basis which amounted to Rs.67,484,026 including Rs. 1,953,157 which was made in current year, in the opinion of the management, based on its understanding of the cases and as advised by their counsel, the provision made in the books is considered adequate.

(c) The Company has received legal notice of claim / lawsuit filed against it in respect of programmes aired on the Channels, in the opinion of the management, no liability is likely to arise on account of such claim / lawsuit.

(d) The Company has received demand notices from Income Tax department amounting to Rs. 87,411,396 (Previous Year54,995,989). The Company has contested the same and in the opinion of the management, no liability is likely to arise on account of such demand notices.

(e) Bank Guarantees outstanding Rs. 28,554,699 (Previous Year Rs. 8,714,420)

2. During the year, the Company has recognised the following amounts in the Profit and Loss Account

II. Defined Benefit Plans

The expected return on plan assets is based on actuariai expectation of average long term rate of return expected on investment of the funds during the estimated term of the obligation.

3. EMPLOYEE STOCK OPTION PLAN - ESOP 2006

The Company instituted the Employee Stock Option Plan - (TVTN ESOP 2006), to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 had been approved by the board of directors in their meeting held on 21st August 2006 and by shareholders in their meeting held on 28th September 2006, for grant of 2,900,000 options representing one share for each option upon exercise by the employees of the Company at a exercise price determined by Board/Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance Criteria. The Optionee may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. 1,556,816 as an expense during the year. Further, the liability Outstanding as at the March 31, 2011 in respect of Employees Stock Options Outstanding is Rs. 8,692,500. The balance deferred compensation expense Rs. 3,141,557 will be amortized over the remaining vesting period of Options.

4. As identified and certified by the Company, Related Party Disclosures as per the requirement of Accounting Standard 18 issued by the Institute of Chartered Accountants of India:

(I). Name of the related party and nature of related party relationship where control exists:

(a) Key Management Personnel (KMP):

- Mr. Aroon Purie (Managing Director)

- Ms. Koel Purie Rinchet (Whole Time Director)

(b) Entities Controlling the Company (Holding Companies):

- World Media Private Limited ^

- Living Media India Limited

(c) Subsidiary Companies :

- T.V. Today Network (Business) Limited

(d) Fellow Subsidiary Companies :

- Thomson Press (India) Ltd,

- Living Media International Ltd.

- Radio Today Broadcasting Limited

- Mail Today News Papers Ltd.

(e) Companies under common control:

- Integrated Databases India Limited

^ There are no transactions during the year

5. Segment Reporting:

The Company has considered business segment as the primary segment for disclosure. The products included in each of the reported domestic business segments are as follows:

- TV Broadcasting

- Radio Business

The above business segments have been identified considering :

- the nature of services

- the differing risks and return

- the organizations structure and

- the internal financial reporting systems

6. Operating Leases

The Company has cancelable lease arrangements mainly for leasing of office premises and Company leased accommodations for its employees. Terms of lease include terms of renewal, increase in rents in future periods and terms of cancellation. The operating lease payments recognized in the Profit & Loss account amount to Rs. 125,811,031 (Previous Year Rs. 115 313 260) net of sublease rental received Rs. 6,637,955 (Previous Year Rs. 5,290,142).

7. The Company has as a strategic decision considered entering into the print media. In this regard, it has acquired some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent valuer the Company, the acquired some stake through direct subscription and also through purchase from existing shareholders amounting to Rs. 45.5 crores. Though, Mail Today is in the initial stages of operations and presently is incurring losses, the Company based on independent projections, is confident of the future profitability of Mail Today and consequently of the carrvina value of the Investment.

8. Based on information available with the Company, there are no outstanding dues to Micro and Small enterprises as at March 31,2011, No interest is paid/payable by the Company in terms of-section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

9. The figures for the previous year have been regrouped/ rearranged wherever considered necessary to conform to the current year's classification..


Mar 31, 2010

1. Capital Commitments/Contingent Liabilities:

(a) Estimated amounts of contract remaining to be executed on capital account, net of advances, not provided for Rs 235,817,263 (Previous year Rs. 208,699,397)

(b) The Company had received some claims from Prasar Bharti in earlier years towards uplinking charges and telecast fees which were disputed by the Company. Prasar Bharti also raised claims towards interest for non payment of dues from time to time, which also were disputed by the Company. Total claims as at 31st March 2010 amounted to Rs.97,905,479 and the disputes were referred to various legal forums. Pending final outcome in respect of such disputes, the Company made provision on an estimated basis which amounted to Rs.65, 530,869 including Rs. 25,330,260 which was made in current year. In the opinion of the management, based on its understanding of the cases and as advised by their counsel, the provision made in the books is considered adequate.

(c) The Company has received legal notice of claim / lawsuit filed against it in respect of programmes aired on the Channels. In the opinion of the management, no liability is likely to arise on account of such claim / lawsuit.

(d) The Company has received demand notices from Income Tax department amounting to Rs. 54,995,989 (Previous Year 21,011,432). The Company has contested the same and in the opinion of the management, no liability is likely to arise on account of such demand notices.

2. Particulars of Managerial Remuneration

(a) The remuneration paid to the managerial personnel during the year aggregates to:

3. Employee Stock Option Plan - ESOP 2006

The Company instituted the Employee Stock Option Plan - (TVTN ESOP 2006), to grant equity - based incentives to its eligible employees. The TVTN ESOP 2006 had been approved by the board of directors in their meeting held on 21st August 2006 and by shareholders in their meeting held on 28th September 2006, for grant of 2,900,000 options representing one share for each option upon exercise by the employees of the Company at a exercise price determined by Board/Remuneration Committee. The equity shares covered under the scheme shall vest over a period of four years; vesting shall vary based on the meeting of the performance Criteria. The Optionee may exercise their vested options at any moment after the earliest applicable vesting date and prior to the completion of ten years from the grant date.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. 1,189,303 as an expense during the year. Further, the liability Outstanding as at the March 31, 2010 in respect of Employees Stock Options Outstanding is Rs. 5,077,500. The balance deferred compensation expense Rs. 948,373 will be amortized over the remaining vesting period of Options.

4. As identified and certified by the Company, Related Party Disclosures as per the requirement of Accounting Standard 18 issued by the Institute of Chartered Accountants of India:

(I). Name of the related party and nature of related party relationship where control exists:

(a) Key Management Personnel (KMP):

- Mr. Aroon Purie (Managing Director)

(b) Entities Controlling the Company (Holding Companies):

- World Media Private Limited ^

- Living Media India Limited

(c) Subsidiary Companies :

- T.V. Today Network (Business) Limited

(d) Fellow Subsidiary Companies :

- Thomson Press (India) Ltd.

- Living Media International Ltd.

- Radio Today Broadcasting Limited

- Mail Today News Papers Ltd.

(e) Companies under common control:

- Integrated Databases India Limited ^

(f) Others:

- Vasant Valley School

^ there are no transactions during the year

The Company has considered business segment as the primary segment for disclosure. The products included in each of the reported domestic business segments are as follows:

- TV Broadcasting

- Radio Business

The above business segments have been identified considering :

- the nature of services

- the differing risks and return

- the organizations structure and

- the internal financial reporting systems

The Company was operating under a single segment in the previous year ended March 31, 2009

5. Operating Leases

The Company has cancelable lease arrangements mainly for leasing of office premises and Company leased accommodations for its employees. Terms of lease include terms of renewal, increase in rents in future periods and terms of cancellation. The operating lease payments recognized in the Profit & Loss account amount to Rs. 115,313,260 (Previous Year: Rs. 60,702,890), net of sublease rental received Rs. 5,290,142 (Previous Year Rs. 4,494,528).

6. The Company has as a strategic decision considered entering into the print media. In this regard it has decided to acquire some stake in Mail Today Newspapers Private Limited (Mail Today), a differentiated newspaper with respect to content as well as value to its advertisers. Based on the valuation of the equity shares of Mail Today, carried out by an independent valuer, the Company has decided to acquire some stake through direct subscription and also through purchase from existing shareholders. Total commitment on this count is Rs.45.50 crores out of which as at 31st March 2010, the Company has paid Rs.18.50 crores towards advance payment for purchase of equity shares which is disclosed as Advance towards Share Subscription under Loans & Advances. Though, Mail Today is in the initial stages of operations and presently is incurring losses, the Company, based on projections, is confident of the future profitability of Mail Today and consequently of the carrying value of the advance against equity.

7. Pursuant to the Composite Scheme of Arrangement, under the provisions of the Companies Act, 1956 (The Scheme), approved by the shareholders, sanctioned by the Honble High Court at Delhi and the Ministry of Information and Broadcasting on November 21,2009, February 24,2010 and May 20, 2010 respectively, the undertaking of the radio broadcasting business of Radio Today Broadcasting Limited, a company engaged in the radio broadcasting and trading business (the Transferor Company), was transferred to and vested in the Company (the Transferee Company) with effect from 1 st April 2009 (Appointed Date). The Scheme, a copy of which was filed with the Registrar of Companies subsequent to the year end on 13th April, 2010, is an amalgamation in the nature of merger and has been given effect to in these accounts under pooling of interest method.

In accordance with The Scheme, the Company will issue 1,655,999 equity shares of Rs.5 each as fully paid up to the equity shareholders of Radio Today Broadcasting Limited, in the ratio of 1 equity share of Rs 5 each fully paid up of the Company for every 6 equity shares of the face value of Rs 10 each fully paid up, held in Radio Today Broadcasting Limited towards consideration for the aforesaid transfer and vesting of radio business, which will be credited in its books at face value, pending issuance of the shares as at the year- end, the face value of Rs 8,279,995 has been credited to Share Capital Suspense.

In accordance with The Scheme, all assets and liabilities pertaining to the radio broadcasting business of the Transferor Company, as on the appointed date, have been incorporated in the books of the Company at book value and the excess of the Share Capital Suspense over the book value of net assets acquired, amounting to Rs 423,622,791, has been adjusted against Securities Premium Account of the Company. The unamortized license fees pertaining to the Transferor Company and transferred to the Company pursuant to the Scheme, amounting to Rs, 244,229,509 has also been adjusted against the Securities Premium Account. Further, the Company has determined the deferred tax assets, amounting to Rs 249,529,332, based on the assets and liabilities of the radio broadcasting business which has been adjusted with the General Reserve Account.

The accounting treatment in respect of excess of Share Capital Suspense over the book value of net assets acquired and unamortized license fee are different from that prescribed by the Accounting Standard (AS) 14, Accounting for Amalgamations, notified under Section 211 (3C) of the Companies Act, 1956 with respect to Amalgamation in the nature of Merger. AS 14 requires the difference between the amount recorded as share capital and the amount of share capital of the transferor company to be adjusted against reserve.

The difference in accounting treatment as above, in compliance with the High Court Order, is as permitted by paragraph 42 of the AS - 14. As the said paragraph 42 of AS - 14 requires disclosure of the impact of the amalgamation on all accounts, had the accounting treatment as per AS - 14 been followed, this is given below for information.

Had the accounting treatment prescribed in AS 14 been followed, amortisation of intangible assets would have been higher by Rs 27,990,000 with its consequential impact on the profit of the Company, General Reserve would have lower by Rs 423,622,791, Unamortized License Fees would have been higher by Rs.216,239,509 and Share Premium Account would have been higher by Rs. 667,852,300.

8. The company has bought back and extinguished 203,752 equity shares during the year, under its buy back scheme which commenced on March 16, 2009 ended on July 13, 2009.

9. As per the information available with the Company, during the year, there have been no transactions with the enterprises covered under the Micro, Small & Medium Enterprises Development Act, 2006.

10. The figures for the previous year have been regrouped / rearranged wherever considered necessary to conform to the current years classification. Figures for the current year include those of the radio business of the erstwhile Radio Today Broadcasting Limited (Refer note 13 above). Accordingly, the current year figures are not comparable to those of the previous year.

Note: 2

Figures in brackets indicate cash outflow Note: 3

Note: 3

The above Cash flow statement has been prepared under the indirect method setout in AS- 3 (Cash Flow Statements), notified under section 211(3C) of the Companies Act, 1956 Note : 4

Note: 4

Movement in balances have been adjusted for Net Assets acquired on amalgamation. (Refer Note 13 on Schedule Q)

This is the Cash Flow Statement referred to in our report of even date. The notes referred to above forms an integral part of the Cash Flow statement

 
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