Mar 31, 2023
1 CORPORATE INFORMATION
TV18 Broadcast Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First Floor, Empire Complex, 414 - Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Broadcasting, Digital Content and allied businesses.
2 SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The Standalone Financial Statements have been prepared on the historical cost basis except for certain financial assets and liabilities, defined benefit plans - plan assets which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act,2013, (Ind AS Compliant Schedule III) as amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (?), which is its functional currency and all values are rounded to the nearest lakh (? 00,000), except when otherwise indicated.
2.2 Summary of Significant Accounting Policies(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ NonCurrent classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(b) Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Projects under which assets are not ready for there intended use are shown as Capital Work in Progress.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of other intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Computer Softwares and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News archives is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
(f) Impairment of Non-Financial Assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group of assets, called Cash Generating Unit (''CGU") may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions or independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pretax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss, other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(g) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Disclosure of contingent liability is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a postemployment benefit plan under which the
Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plans
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services. Re-measurement of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
(i) Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
(ii) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(j) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Contract balances
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue.
I nvoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers. Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest income
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend income
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. However, trade receivables that do not contain a significant financing component are measured at transaction prices. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured
at fair value through other comprehensive income
(FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All other equity investments are measured at fair value, with value changes recognised in the Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income! However, dividend on such equity investments are recognised in the Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL). Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
(ii) Financial Liabilities
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derivative financial instruments
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Such
derivative financial instrument are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as Financial Assets when the fair value is positive and as Financial Liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken to Statement of Profit and Loss.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the
figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
2.3 STANDARD ISSUED BUT NOT EFFECTIVE:
On 31st March, 2023, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2023. This notification has resulted into amendments in the following existing accounting standards which are applicable to company from 1st April, 2023.
i. Ind AS 101 - First-time Adoption of Indian Accounting Standards
ii. Ind AS 102 - Share-based Payment
iii. Ind AS 103 - Business Combinations
iv. Ind AS 107 - Financial Instruments Disclosures
v. Ind AS 109 - Financial Instruments
vi. Ind AS 115 - Revenue from Contracts with Customers
vii. Ind AS 1 - Presentation of Financial Statements
viii. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
ix. Ind AS 12 - Income Taxes
x. Ind AS 34 - Interim Financial Reporting Application of above standards are not expected to have any significant impact on the company''s financial statements.
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets:
Property, Plant and Equipment/ Other Intangible Assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Determining the lease term
The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
(c) Recoverability of trade receivables:
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying
amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(e) Impairment of non-financial assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash-generating units (''CGUO for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering recent transaction or independent valuer''s report. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
I n assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
(f) Impairment of financial assets:
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples, EBITDA multiples, recent transactions, independent valuer''s report and reorganisation of businesses. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The Company uses judgement to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
For estimates relating to fair value of financial instruments Refer Note 40.
Mar 31, 2022
1 CORPORATE INFORMATION
TV18 Broadcast Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First Floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Broadcasting, Digital Content and allied businesses.
2 SIGNIFICANT ACCOUNTING POLICIES
The Standalone Financial Statements have been prepared on the historical cost basis except for certain financial assets and liabilities, defined benefit plans - plan assets which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (?), which is its functional currency and all values are rounded to the nearest lakh (? 00,000), except when otherwise indicated.
(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Projects under which assets are not ready for there intended use are shown as Capital Work in Progress.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
(c) Leases:
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of other intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Computer Softwares and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News archives is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group of assets, called Cash Generating Unit (''CGU'') may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions, independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss, other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(g) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
'' Disclosure of contingent liability is made when there
is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
(h) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurement of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
(i) Tax Expenses
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Contract balances
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue.
Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest income
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend income
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income'' However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company''s right to receive the amount is established.
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Such derivative financial instrument are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair
value. Derivatives are carried as Financial Assets when the fair value is positive and as Financial Liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken to Statement of Profit and Loss.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
Not effective during the year:
On 23rd March, 2022, the Ministry of Corporate Affairs (MCA)
has notified Companies (Indian Accounting Standards)
Amendment Rules, 2022. This notification has resulted into amendments in the following existing accounting standards from 1st April, 2022.
i. Ind AS 101 - First time adoption of Ind AS
ii. Ind AS 103 - Business Combination
iii. Ind AS 109 - Financial Instruments
iv. Ind AS 16 - Property, Plant and Equipment
v. Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets
vi. Ind AS 41 - Agriculture
Application of amendments to the above standards are not expected to have any significant impact on the Company''s standalone financial statements.
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets:
Property, Plant and Equipment/ Other Intangible Assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Determining the lease term
The Company determines the lease term as the noncancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
(d) Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash-generating units (''CGU'') for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering EBIDTA multiples. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows and EBITDA multiples. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The Company uses judgement to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
(i) Fair value measurement
For estimates relating to fair value of financial instruments Refer Note 39.
The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. In assessing the recoverability of Company''s assets such as Goodwill, Financial Assets and Non-Financial Assets, the Company has considered internal and external information. The Company has evaluated impact of this pandemic on it''s business operations and based on it''s review and current indicators of future economic conditions, there is no significant impact on it''s standalone financial statements and the Company expects to recover the carrying amount of all it''s assets.
Mar 31, 2021
1 CORPORATE INFORMATION
TV18 Broadcast Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First Floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Broadcasting, Digital Content and allied businesses.
2 SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The Standalone Financial Statements have been prepared on the historical cost basis except for certain financial assets and liabilities, defined benefit plans - plan assets which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated.
2.2 Summary of Significant Accounting Policies(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
(b) Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Projects under which assets are not ready for there intended use are shown as Capital Work in Progress. Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
(d) Other Intangible Assets:
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably. Gains or losses arising from derecognition of other intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life. Computer Softwares and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News Archives'' is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
(e) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
(f) Impairment of Non-Financial Assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group of assets, called Cash Generating Unit (''CGU'') may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions, independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss, other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(g) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Disclosure of contingent liability is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
(h) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee
benefits expected to be paid in exchange for the
March, 2021
services rendered by employees are recognised as an expense during the period when the employees render the services.
Long Term Employee Benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Defined Benefit Plans
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurement of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
(i) Tax Expenses
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(j) Foreign currencies transactions and translation Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(k) Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped. Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Contract balances
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as
Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''. However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount
equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(m) Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(n) Earnings per share
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
Effective during the year:
Amendment to Existing Standards
Application of the following amendment did not have any significant impact on the standalone financial statements of the Company.
i. Ind AS 103 - Business Combinations
ii. Ind AS 107 - Financial Instruments: Disclosures
iii. Ind AS 109 - Financial Instruments
iv. Ind AS 116 - Leases
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets:
Property, Plant and Equipment/ Other Intangible Assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Determining the lease term
The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
(c) Recoverability of trade receivables:
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(e) Impairment of non-financial assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash-generating units (''CGU'') for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering recent transaction and independent valuer''s report. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
(f) Impairment of financial assets:
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples, EBITDA multiples, recent transactions, independent valuer''s report and reorganisation of businesses. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
(g) Defined benefit plans:
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
(h) Deferred tax
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The Company uses judgement to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
(i) Fair value measurement
For estimates relating to fair value of financial instruments Refer Note 39.
(j) Estimation uncertainty relating to the global health pandemic
The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. In assessing the recoverability of Company''s assets such as Goodwill, Financial Assets and Non-Financial Assets, the Company has considered internal and external information. The Company has evaluated impact of this pandemic on it''s business operations and based on it''s review and current indicators of future economic conditions, there is no significant impact on it''s standalone financial statements and the Company expects to recover the carrying amount of all it''s assets.
Mar 31, 2018
(a) Property, plant and equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
(b) Intangible assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Computer Software and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News Archivesâ is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
(c) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets:
Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
(d) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
(e) Impairment of non-financial assets - property, plant and equipment and intangible assets:
The Company assesses at each reporting dates as to whether there is any indication that any property, plant and equipment and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(f) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation as a result of a past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.
(g) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recongnised as a liability as at the Balance Sheet date on the basis of actuarial valuation.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Companyâs contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days salary for the every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
Re-measurement of defined benefit plans in respect of post-employment and other long term benefits are charged to the Other Comprehensive Income.
(h) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity.
i Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(i) Share based payments
Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(j) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(k) Revenue recognition
Revenue from operations includes sale of goods and services. Sale of services includes advertisement revenue, subscription revenue, revenue from sale of television content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services.
Sale of services is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government. Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.
Sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Revenue from sale of goods, is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.
Interest income
Interest Income from a financial asset is recognised using effective interest rate method.
Dividend income
Dividend income is recognised when the Companyâs right to receive the payment has been established.
(l) Financial instruments
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are fair valued through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost.
D. Equity investments:
All equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, Company applies âsimplified approachâ which requires expected lifetime losses to be recognised from initial recognition of the receivable. Further, Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(ii) Financial Liabilities
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of loans net of directly attributable cost. Fees of recurring nature are directly recognised in statement of profit and loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Mar 31, 2017
(a) Property, plant and equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
(b) Intangible assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Computer Software and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News Archivesâ is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
(c) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets:
Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
(d) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
(e) Impairment of non-financial assets - property, plant and equipment and intangible assets:
The Company assesses at each reporting dates as to whether there is any indication that any property, plant and equipment and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(f) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation as a result of a past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.
(g) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recongnised as a liability as at the Balance Sheet date on the basis of actuarial valuation.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Companyâs contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days salary for the every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
Re-measurement of defined benefit plans in respect of post-employment and other long term benefits are charged to the Other Comprehensive Income.
(h) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity.
i Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(i) Share based compensation
Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(j) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit or Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(k) Revenue recognition
Revenue from operations includes sale of services measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government.
Sale of services includes advertisement revenue, subscription revenue, revenue from sale of television content, facility and equipment rental, program revenue and revenue from media related professional and consultancy services. Revenue from rendering of services is recongised when the performance of agreed contractual task been completed.
Interest income
Interest Income from a financial asset is recognised using effective interest rate method.
Dividend income
Dividend income is recognised when the Companyâs right to receive the payment has been established.
(l) Financial instruments
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are fair valued through profit or loss.
C. Equity investments:
All equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Income.
D. Investment in subsidiaries, associates and joint ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, Company applies âsimplified approachâ which requires expected lifetime losses to be recognised from initial recognition of the receivable. Further, Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(ii) Financial Liabilities
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of loans net of directly attributable cost. Fees of recurring nature are directly recognised in profit or loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Mar 31, 2016
A. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except to the extent disclosed.
B. Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that effect the reported amount of assets and liabilities, disclosure of contingent liabilities and the reported amount of income and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known / materialize.
C. Depreciation and amortization
Depreciation has been provided on the useful life of its tangible assets as per the useful life prescribed in Schedule II to the Companies Act, 2013.
Cost of leasehold improvements is being amortized over the remaining period of lease of the premises.
Intangible assets are amortized over their estimated useful life as follows:
Computer software is being depreciated over a period of 5 years. News archives are depreciated on straight line basis over the period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years. License pertaining to satellite rights is amortized over their estimated useful life of 5 years.
Depreciation on additions is charged proportionately from the date of acquisition/ installation.
D. Revenue recognition
i. Revenue from operations includes:
Advertisement revenue comprising:
⢠Revenue from sale of advertising time, which is recognized on accrual basis when advertisements are telecast in accordance with contractual obligations.
⢠Revenue from sponsorship contracts, which is recognized proportionately over the term of the sponsorship for services rendered.
Subscription revenue which is recognized on accrual basis in accordance with the terms of the contract with the distribution and collection agency and customers, for services rendered.
Revenue from sale of television content is recognized on transmission of audio-video content to the customer and their acceptance.
Facility and equipment rental which is accounted for on the accrual basis for the period of use of equipment by the customers.
Program revenue is recognized on dispatch of programs to customers in accordance with contractual commitments.
Revenue from media related professional and consultancy services is recognized in accordance with contracts on rendering of services.
ii. Other income
Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it, is established.
E. Fixed assets Tangible assets
Tangible assets are stated at cost net of recoverable taxes, trade discounts and rebates, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the assets to its intended use.
Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Capital work-in-progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Intangible assets
I intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the assets to its working condition.
F. Foreign currency transactions
i. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
ii. Monetary items denominated in foreign currencies at the year-end are restated at year end rates.
iii. Non-monetary foreign currency items are carried at cost.
iv. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.
G. Investments
Current investments are carried at lower of cost and quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
H. Employee benefits
Employee benefits include provident fund, employee state insurance scheme, gratuity fund and compensated absences.
i. Defined contribution plans: The Company''s contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
ii. Defined benefits plans: For defined benefit plans in the form of gratuity fund the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
Gratuity for employees of a division of the Company is administered through a trust. The Company contributes to the trust, which has taken group policies with the Life Insurance Corporation of India to cover its liabilities towards employee''s gratuity of those divisions.
iii. Short-term employee benefits: The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service.
iv. Long-term employee benefits: Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date on the basis of actuarial valuation.
I. Borrowing Cost
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
J. Leases
i. Operating lease
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis over the lease term.
ii. Finance lease
⢠Where the Company as a less or leases assets under finance leases, such amounts are recognized as receivables at an amount equal to the net investment in the lease and the finance income is recognized based on a constant rate of return on the outstanding net investment.
K. Taxes on income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset, if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.
L. Impairment
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
M. Provisions, contingent liabilities and contingent assets
Provision recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.
Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
A. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section133 of the Companies Act, 2013 read with Rule 7 of the Companies
(Accounts) Rules 2014 and the relevant provisions of the Companies Act,
2013. The financial statements have been prepared on accrual basis
under the historical cost convention. The accounting policies adopted
in the preparation of the financial statements are consistent with
those followed in the previous year except to the extent disclosed.
B. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires judgements, estimates and assumptions to be made that effect
the reported amount of assets and liabilities, disclosure of contingent
liabilities and the reported amount of income and expenses during the
year. Difference between the actual results and estimates are
recognized in the period in which the results are known / materialise.
C. Depreciation and amortisation
Depreciation has been provided on the useful life of its tangible
assets as per the useful life prescribed in Schedule II to the
Companies Act, 2013.
Cost of leasehold improvements is being amortised over the remaining
period of lease of the premises.
Intangible assets are amortised over their estimated useful life as
follows:
Computer software is being depreciated over a period of 5 years. News
archives are depreciated on straight line basis over the period of 21
years as the contents of the same are continuously used in day to day
programming and hence the economic benefits from the same arise for a
period longer than 20 years. License pertaining to satellite rights is
amortised over their estimated useful life of 5 years.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000 each are
fully depreciated in the year of capitalisation.
D. Revenue recognition
i) Revenue from operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on accrual
basis when advertisements are telecast in accordance with contractual
obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship for services rendered.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency and customers, for services rendered.
- Revenue from sale of television content is recognised on transmission
of audio-video content to the customer and their acceptance.
- Facility and equipment rental which is accounted for on the accrual
basis for the period of use of equipment by the customers.
- Program revenue is recognised on dispatch of programs to customers in
accordance with contractual commitments.
- Revenue from media related professional and consultancy services is
recognised in accordance with contracts on rendering of services.
ii) Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
E. Fixed assets
Tangible assets
Tangible assets are stated at cost net of recoverable taxes, trade
discounts and rebates, less accumulated depreciation and impairment
loss, if any. The cost comprises purchase price, borrowing costs, and
any cost directly attributable to bringing the assets to its intended
use.
Subsequent expenditures related to an item of tangible asset are added
to its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Capital work-in-progress: Projects under which assets are not ready for
their intended use and other capital work-in-progress are carried at
cost, comprising direct cost, related incidental expenses and
attributable interest.
Intangible assets
Intangible assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization/ depletion and impairment loss, if
any. The cost comprises purchase price, borrowing costs, and any cost
directly attributable to bringing the assets to its working condition.
F. Foreign currency transactions
i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
ii) Monetary items denominated in foreign currencies at the year-end
are restated at year end rates.
iii) Non-monetary foreign currency items are carried at cost.
iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Statement of Profit
and Loss, except in case of long term liabilities, where they relate to
acquisition of fixed assets, in which case they are adjusted to the
carrying cost of such assets.
G. Investments
Current investments are carried at lower of cost and quoted / fair
value. Long term investments are stated at cost. Provision for
diminution in the value of long term investments is made only if such a
decline is other than temporary.
H. Employee benefits
Employee benefits include provident fund, employee state insurance
scheme, gratuity fund and compensated absences.
i) Defined contribution plans: The Company's contribution to provident
fund and employee state insurance scheme are considered as defined
contribution plans and are charged as an expense based on the amount of
contribution required to be made and when services are rendered by the
employees.
ii) Defined benefits plans: For defined benefit plans in the form of
gratuity fund the cost of providing benefits is determined using the
Projected Unit Credit method, with actuarial valuations being carried
out at each balance sheet date. Actuarial gains and losses are
recognised in the Statement of Profit and Loss in the period in which
they occur. Past service cost is recognised immediately to the extent
that the benefits are already vested and otherwise is amortised on a
straight-line basis over the average period until the benefits become
vested. The retirement benefit obligation recognised in the Balance
Sheet represents the present value of the defined benefit obligation as
adjusted for unrecognised past service cost, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
Gratuity for employees of certain division is administered through a
trust. The Company contributes to the trust, which has taken group
policies with the Life Insurance Corporation of India to cover its
liabilities towards employee's gratuity of those divisions.
iii) Short-term employee benefits: The undiscounted amount of
short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised during the year when the
employees render the service.
iv) Long-term employee benefits: Compensated absences which are not
expected to occur within twelve months after the end of the period in
which the employee renders the related service are recognised as a
liability at the present value of the defined benefit obligation as at
the Balance Sheet date on the basis of actuarial valuation.
I. Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to the Statement of Profit and Loss in the
period in which they are incurred.
J. Leases
i) Operating lease
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
ii) Finance lease
- Where the Company as a lessor leases assets under finance leases,
such amounts are recognised as receivables at an amount equal to the
net investment in the lease and the finance income is recognised based
on a constant rate of return on the outstanding net investment.
- Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
K. Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realised such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset, if
such items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
L. Impairment
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of Profit and Loss in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
M. Provisions, contingent liabilities and contingent assets
Provision recognized in the accounts when there is a present obligation
as a result of past event(s) and it is probable that an outflow of
resources will be required to settle the obligation and a reliable
estimate can be made. Provisions are not discounted to their present
value and are determined based on the best estimate required to settle
the obligation at the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow
of resources is remote.
Contingent assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2013
A. Basis of accounting and preparation of financial statements
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company.
b. Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities as at
the date of the financial statements and reported amounts of income and
expenses during the year. Examples of such estimates include provision
for doubtful debts, future obligations under employee retirement
benefit plans, income taxes and useful life of tangible and intangible
assets. Contingencies are recorded when it is probable that a liability
will be incurred, and the amount can be reasonably estimated. Actual
results could differ from such estimates and the difference between the
actual results and the estimates are recognised in the periods in which
the results are known/ materialise.
c. Inventories
Inventories consist of blank betacam tapes and are stated at cost on
First in First out (FIFO) basis. Stocks of other tapes are written off
at the time of purchase.
d. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
e. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
f. Depreciation and amortisation
Depreciation on all assets other than leasehold improvements, computer
software and plant and machinery - distribution equipment are charged
on straight line basis over the estimated useful lives, using rates
(including double/ triple shift depreciation rates wherever applicable)
prescribed by Schedule XIV of the Companies Act, 1956.
Cost of leasehold improvements is being amortised over the remaining
period of lease (including renewal options) of the premises. Computer
software and plant and machinery - distribution equipment are being
depreciated over a period of 5 years and 8 years respectively. These
rates are higher than those prescribed in Schedule XIV of the Companies
Act, 1956.
News archives are depreciated on straight line basis at the rate of
4.75% per annum. Useful life of news archives is estimated to be more
than 10 years as the contents of the same are continuously used in day
to day programming and hence the economic benefits from the same arise
for a period longer than 10 years.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing Rs. 5,000 or less
individually have been fully depreciated in the year of purchase.
g. Revenue Recognition
i. Revenue from operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on the
accrual basis when advertisements are telecast in accordance with
contractual obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency, for the services rendered.
- Revenue from sale of television content is recognised on transmission
of audio-video content to the customer and their acceptance.
- Facility and equipment rental which is accounted for on the accrual
basis for the period of use of equipment by the customers.
- Program revenue which is accounted for on dispatch of programs to
customers in accordance with contractual commitments.
- Revenue from media related professional and consultancy services is
recognised in accordance with contracts on rendering of services.
ii. Other income includes
- Dividends on investments which are accounted for when the right to
receive dividend is established.
- Interest income which is recognized on time proportionate basis,
taking into account the amount outstanding and the rate applicable.
h. Tangible Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation less depreciation. All direct expenses
attributable to acquisition/installation of assets are capitalised.
Capital work-in-progress: Projects under which assets are not ready for
their intended use and other capital work- in-progress are carried at
cost, comprising direct cost, related incidental expenses and
attributable interest.
i. Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes and any
directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
j. Foreign Currency Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing at
the date of balance sheet, the resultant exchange differences are
recognised in the Statement of Profit and Loss.
k. Investments
Long term investments are stated at cost less provision for other than
temporary diminution in carrying value of each investment. Current
investments are carried at lower of cost or fair value.
l. Employee Benefits
i. The Company''s Employee''s Provident Fund scheme is a defined
contribution plan. The Company''s contribution to the employees''
Provident Fund is charged to the Statement of Profit and Loss during
the period in which the employee renders the related service.
ii. Short term employee benefits (Medical, Leave Travel Allowance,
etc.) expected to be paid in exchange for the services rendered is
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the "Gratuity Plan") covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee''s salary and the tenure of employment.
For defined benefit plans in the form of gratuity fund the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
iv. Benefits comprising long term compensated absences constitute
other long term employee benefits. The liability for compensated
absences is provided on the basis of an actuarial valuation done by an
independent actuary at the year end. Actuarial gains and losses are
recognised immediately in the Statement of Profit and loss.
m. Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure,
organisation structure and internal reporting systems, the Company
operates only in the media business segment which mainly comprises
media and related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the
geographical location of customers i.e. within India and overseas.
n. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognised as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalised as fixed assets with corresponding amount shown as lease
liability. The principal component in the lease rentals is adjusted
against the lease liability and the interest component is charged to
Statement of Profit and Loss.
o. Earnings Per Share
The Company reports basic and diluted earnings per equity share in
accordance with AS-20, Accounting Standard on Earnings Per Share. Basic
earnings per equity share is computed by dividing net profit after tax
by the weighted average number of equity shares outstanding at the year
end. Diluted earnings per equity share is computed using the weighted
average number of equity shares and dilutive potential equity shares
outstanding at the year end and except where the results would be
anti-dilutive.
p. Taxes on income
Income tax comprises current tax and deferred tax. Current tax is
determined in accordance with the provisions of Income Tax Act, 1961.
Advance taxes and provisions for current taxes are presented in the
Balance Sheet after off setting advance taxes paid and income tax
provisions.
Deferred Tax charge or credit is recognised on timing differences being
the difference between taxable income and accounting income that
originate in one year and are capable of reversal, subject to
consideration of prudence, in one or more subsequent years. Deferred
Tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax assets on unabsorbed depreciation and carry forward of
losses are not recognised unless there is a virtual certainty that
there will be sufficient future taxable income available to realise
such assets.
Minimum Alternate Tax (MAT) paid in accordance with Income Tax Act,
1961, which gives rise to future economic benefit in the form of
adjustment from income tax liability, is recognised when it is
reasonably certain that the Company will be able to set off the same
and adjust it from the current tax charge for that year.
q. Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated
and impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
r. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
s. Employee Stock Based Payments
Stock options granted to the employees under the stock options schemes
are accounted at intrinsic value as per the accounting treatment
prescribed in the guidance note on Employee share based payments issued
by the Institute of Chartered Accountants of India. Accordingly, the
excess of market price, determined as per the guidance note, of
underlying equity shares (market value), over the exercise price of the
options is recognised as deferred stock compensation expense and is
charged to Statement of Profit and Loss on a straight line basis over
the vesting period of the options. The amortised portion of the cost is
shown under shareholders'' funds. The value of the option forfeited
during the year is credited to General Reserve.
t. Barter Transactions
Barter transactions are recognised at the fair value of consideration
receivable or payable. When the fair value of the transactions cannot
be measured reliably, the revenue/expense is measured at the fair value
of the goods/ services provided/received adjusted by the amount of cash
or cash equivalent transferred.
u. Share issues expenses
Share issue expenses are adjusted on the date of issue of shares
against the Securities Premium Reserve as permissible under Section
78(2) of the Companies Act, 1956, to the extent balance is available
for utilisation in the Securities Premium Reserve.
v. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.
w. Operating Cycle
Based on the nature of products / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
Mar 31, 2012
A. Transfer of news business of TEIL
i. As per the Scheme, TEIL's news business inter-alia consisting of
business news channels viz. CNBC TV18 and CNBC Awaaz was demerged from
TEIL and merged with TV18. The details of the assets and liabilities of
TEIL being transferred to TV18 at its book value as at the appointed
date is mentioned below:
ii. As per the scheme, during the intervening period (i.e. 1 April,
2010 to 31 March, 2011), TEIL shall be deemed to have been carrying on
all business and activities relating to news business on behalf of the
Company and all profits accruing to the transferor Company, or losses
arising or incurred by them relating to the news business shall be
treated as the profits or losses of the Company and accordingly credit
balance of statement of profit and loss of Rs. 349,484,839 of TEIL news
business for the period 1 April, 2010 to 31 March, 2011 was adjusted
from the opening balance of the statement of profit and loss.
b. Merger of IBN18 Media & Software Limited and i-News.com Limited
As per the Scheme, i-News.com Limited, a subsidiary of TEIL and IBN18
Media & Software Limited, a subsidiary of the Company has merged into
the Company. The details of the assets and liabilities of these
companies being transferred to the Company at its book value as at the
appointed date is mentioned below:
c. The Company has fair valued its assets and assets acquired as on
the appointed date from TEIL and iNews under the Scheme (such assets
comprise investments, deferred tax asset, miscellaneous expenditure,
debtors and loans and advances) and have in accordance with the Scheme,
debited Rs. 577,621,696 to the Securities Premium Reserve being the
differential between the book value and the fair value.
d. Pursuant to the Scheme the deficit in the statement of profit and
loss of the Company to the extent of Rs. 791,095,787 has been adjusted
from the Capital Reserve and Securities Premium Reserve as follows:
2. Significant Accounting Policies
a. Basis of accounting and preparation of financial statements
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company.
The figures for the year ended 31 March, 2012 for the Company includes
the income, expenses, assets and liabilities after considering the
impact of the Scheme whereas the corresponding figures for the previous
year comprised the income, expenses, assets and liabilities for the
Company prior to the Scheme. Hence the figures for the current year are
not strictly comparable with the corresponding previous year.
b. Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities as at
the date of the financial statements and reported amounts of income and
expenses during the year. Examples of such estimates include provision
for doubtful debts, future obligations under employee retirement
benefit plans, income taxes and useful life of tangible and intangible
assets. Contingencies are recorded when it is probable that a liability
will be incurred, and the amount can be reasonably estimated. Actual
results could differ from such estimates and the difference between the
actual results and the estimates are recognised in the periods in which
the results are known/ materialise.
c. Inventories
Inventories consist of blank betacam tapes and are stated at cost on
First in First out (FIFO) basis. Stocks of other tapes are written off
at the time of purchase.
d. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
e. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
f. Depreciation and amortisation
Depreciation on all assets other than leasehold improvements, computer
software and plant and machinery - distribution equipments are charged
on straight line basis over the estimated useful lives, using rates
(including double/ triple shift depreciation rates wherever applicable)
prescribed by Schedule XIV of the Companies Act, 1956.
Cost of leasehold improvements is being amortised over the remaining
period of lease (including renewal options) of the premises. Computer
software and plant and machinery - distribution equipments are being
depreciated over a period of 5 years and 8 years respectively. These
rates are higher than those prescribed in Schedule XIV of the Companies
Act, 1956.
News archives are depreciated on straight line basis at the rate of
4.75% per annum. Useful life of news archives is estimated to be more
than 10 years as the contents of the same are continuously used in day
to day programming and hence the economic benefits from the same arise
for a period longer than 10 years. Depreciation on additions is
charged proportionately from the date of acquisition/ installation.
Assets costing Rs. 5,000 or less individually have been fully
depreciated in the year of purchase.
g. Revenue Recognition
i. Revenue from operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on the
accrual basis when advertisements are telecast in accordance with
contractual obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency, for the services rendered.
- Facility and equipment rental which is accounted for on the accrual
basis for the period of use of equipment by the customers.
- Program revenue which is accounted for on dispatch of programs to
customers in accordance with contractual commitments.
- Revenue from sale of television content is recognised on transmission
of audio-video content to the customer and their acceptance.
- Revenue from media related professional and consultancy services is
recognised in accordance with contracts on rendering of services.
ii. Other income includes
- Dividends on investments are accounted for when the right to receive
dividend is established.
- Interest income is recognized on time proportionate basis, taking
into account the amount outstanding and the rate applicable.
h. Tangible Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation less depreciation. All direct expenses
attributable to acquisition/installation of assets are capitalised.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
i. Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset. j.
Foreign Currency Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the statement of profit and loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing at
the date of balance sheet, the resultant exchange differences are
recognised in the statement of profit and loss.
k. Investments
Long term investments are stated at cost less provision for other than
temporary diminution in carrying value of each investment. Current
investments are carried at lower of cost or fair value.
l. Employee Benefits
i. The Company's Employee's Provident Fund scheme is a defined
contribution plan. The Company's contribution to the employees'
provident fund is charged to the statement of profit and loss during
the period in which the employee renders the related service.
ii. Short term employee benefits (Medical, Leave travel allowance,
etc.) expected to be paid in exchange for the services rendered are
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the "Gratuity Plan") covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee's salary and the tenure of employment.
The Company also makes contributions to funds administered and managed
by the insurance companies for the amount notified by the said
insurance companies.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the
statement of profit and loss.
The liability with respect to the Gratuity Plan is determined based on
actuarial valuation done by an independent actuary at the year end and
any differential between the fund amount as per the insurer and the
actuarial valuation is charged to the statement of profit and loss.
iv. Benefits comprising long term compensated absences constitute
other long term employee benefits. The liability for compensated
absences is provided on the basis of an actuarial valuation done by an
independent actuary at the year end. Actuarial gains and losses are
recognised immediately in the statement of profit and loss.
m. Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure,
organisation structure and internal reporting systems, the Company
operates only in the media business segment which mainly comprises
media and related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the
geographical location of customers i.e. within India and overseas.
n. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognised as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalised as fixed assets with corresponding amount shown as lease
liability. The principal component in the lease rentals is adjusted
against the lease liability and the interest component is charged to
statement of profit and loss.
o. Earnings Per Share
The Company reports basic and diluted earnings per equity share in
accordance with AS-20, Accounting Standard on Earnings Per Share. Basic
earnings per equity share is computed by dividing net profit after tax
by the weighted average number of equity shares outstanding at the year
end. Diluted earnings per equity share is computed using the weighted
average number of equity shares and dilutive potential equity shares
outstanding at the year end and except where the results would be
anti-dilutive.
p. Taxes on income
Income tax comprises current tax and deferred tax. Current tax are
determined in accordance with the provisions of Income Tax Act, 1961.
Advance taxes and provisions for current taxes are presented in the
balance sheet after off setting advance taxes paid and income tax
provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable income and accounting income that
originate in one year and are capable of reversal, subject to
consideration of prudence, in one or more subsequent years. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax assets on unabsorbed depreciation and carry forward of
losses are not recognised unless there is a virtual certainty that
there will be sufficient future taxable income available to realise
such assets.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act,
1961, which gives rise to future economic benefit in the form of
adjustment from income tax liability, is recognised when it is
reasonably certain that the Company will be able to set off the same
and adjust it from the current tax charge for that year.
q. Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated
and impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
r. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
s. Employee Stock Based Payments
Stock options granted to the employees under the stock options schemes
are accounted at intrinsic value as per the accounting treatment
prescribed in the guidance note on Employee share based payments issued
by the Institute of Chartered Accountants of India. Accordingly, the
excess of market price, determined as per the guidance note, of
underlying equity shares (market value), over the exercise price of the
options is recognised as deferred stock compensation expense and is
charged to statement of profit and loss on a straight line basis over
the vesting period of the options. The amortised portion of the cost is
shown under shareholders' funds. The value of the option forfeited
during the year is credited to General Reserve.
t. Barter Transactions
Barter transactions are recognised at the fair value of consideration
receivable or payable. When the fair value of the transactions cannot
be measured reliably, the revenue/expense is measured at the fair value
of the goods/services provided/received adjusted by the amount of cash
or cash equivalent transferred.
u. Share issues expenses
Share issue expenses are adjusted on the date of issue of shares
against the Securities Premium Reserve as permissible under Section
78(2) of the Companies Act, 1956, to the extent balance is available
for utilisation in the Securities Premium Reserve.
v. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.
Mar 31, 2011
1. Background
ibn18 Broadcast Limited ("The Company" or "ibn18") was incorporated on
6 June, 2005 as Global Broadcast News Private Limited. The Company was
converted into a public limited Company and a revised Certificate of
Incorporation was issued to give effect to this change w.e.f. 12
December, 2005. Later, the name of the Company was changed to ibn18
Broadcast Limited (hereinafter referred as "ibn18") and a revised
Certificate of Incorporation was issued to give effect to this change
on 02 April, 2008. The Company is in the business of broadcasting,
telecasting, relaying and transmitting general news programmes and
operates the news channels "CNN IBN" (consequent to a licensing and
content sharing agreement with Turner Broadcasting System Asia Pacific,
Inc.). The commercial operations of the Company commenced on 17
December, 2005. Further, after merger of ibn7 undertaking of ibn18
Media & software Limited (formerly Jagran TV Private limited), ibn18 is
broadcasting, telecasting, relaying and transmitting hindi general news
programmes and operates the news channel "IBN7". Of the total equity
share capital of the Company, 64,892,544 equity shares (Previous year
47,724,140 equity shares) of face value of Rs.2 each are held by
Network 18 Media & Investments Limited (Network18) of which, 47,384,140
shares were issued to Network18 for consideration received other than
cash pursuant to scheme of amalgamation between the company and SRH
Broadcast News Holdings Private Limited.
Network18 Media & Investments Limited is the holding company by virtue
of management control over the Company's operations.
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company.
2. The Board of Directors of the Company in its meeting held on 7
July, 2010 considered and approved a Scheme of Arrangement ("the
Scheme") between the Company, Network18 Media & Investments Limited
('Network18'), Television Eighteen India Limited ('TV18') and other
group companies, under sections 391 to 394 read with section 78, 100 to
103 of the Companies Act, 1956. As per the Scheme, TV18's television
businesses inter-alia consisting of business news channels viz. CNBC
TV18 and CNBC Awaaz will be demerged and consolidated with the Company.
On the same date, ibn18 Media Software Limited (ibn18 Media) a
subsidiary of the Company and iNews.com Limited (iNews) will be merged
into the Company and since these are either the wholly owned subsidiary
or will become wholly owned subsidiary pursuant to scheme, no
consideration will be payable to their shareholders. As per the Scheme,
the shareholders of TV18 will be given 68 shares of the Company in lieu
of 100 shares held in TV18.
The shareholders of the Company approved the Scheme on 21 December,
2010. The Scheme has been sanctioned by the Hon'ble High Court of Delhi
on 26 April, 2011. The appointed date for the proposed restructuring is
1 April, 2010 and the Scheme shall be effective when the certified
copies of the High Court Orders are filed with the jurisdictional
Registrar of Companies, which is still pending. Accordingly no effect
of the proposed restructuring has been given in these financial
statements. Upon the Scheme becoming effective, the results of
operations, assets and liabilities relating to the television business
of TV18, shall be transferred to the Company. Further ibn18 Media and
iNews will be merged with the Company.
3. Capital commitment, contingent liabilities and litigations
a. Estimated amounts of contracts remaining to be executed on capital
account (net of advances) Rs.2.90 million (Previous year Rs. 0.86
million).
b. The Company has purchased capital equipment under the 'Export
Promotion Capital Goods Scheme'. As per the terms of the licenses
granted under the scheme, the Company has undertaken to achieve an
export commitment of Rs. 740.64 million (Previous year Rs. 740.64
million) over a period of 8 years commencing from 10 August, 2005. In
the event the Company is unable to execute its export obligations, the
Company shall be liable to pay customs duty of Rs. 92.58 million
(Previous year Rs. 92.58 million) and interest on the same at the rate
of 15 per cent compounded annually. The banks have given a guarantee
amounting to Rs. 115.30 million (Previous year Rs. 115.30 million) on
behalf of the Company to the custom authorities for the same. The
Company is hopeful of meeting the required export obligation.
c. The bank has given a guarantee amounting to Rs. 25.00 million
(Previous year Rs. 25.00 million) on behalf of the Company to The
Listing Department, Bombay Stock Exchange Limited.
d. The Company has given corporate guarantees of Rs. 249.00 million
(Previous year Rs. 272.5 million) towards credit facility given by
banks to IBN Lokmat. As at the year end Rs. 146.38 million was
outstanding in respect of such loans.
e. The Company has received legal notices of claims / lawsuits filed
against it relating to infringement of copyrights, objectionable
contents and defamation suits in relation to the programmes produced by
it, the aggregate claim being Rs. 3,124.15 million (Previous year Rs.
3,124.11 million). In the opinion of the management, no material
liability is likely to arise on account of such claims/law suits and
thus no provision has been made against these in financial statements.
4. Share Capital
The shareholders of the Company at the Extra Ordinary General Meeting
held on 22 December, 2008 had approved the issue and allotment of
15,000,000 Convertible Warrants (Warrants) at a price of Rs.102/- each
in accordance with the provisions of Chapter XIII of the Securities and
Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000 to RVT Investments Private Limited (RVT Investments),
a promoter group company. The Company had allotted the aforesaid
Warrants on 13 January, 2009 pursuant to which the Company received Rs.
153 Million being 10% of the total amount of Rs. 1,530 million in
respect thereof.
RVT Investments had in the year ending 31 March, 2009 applied for
conversion of 12,500,000 Warrants and paid Rs. 1,147.50 million towards
balance amount payable (Rs. 91.80 per share). The Company had allotted
12,500,000 equity shares of face value of Rs. 2/- each upon conversion
of Warrants at a premium of Rs 100/- per equity share as per the terms
of issue of Warrants.
As at 1 April, 2009, 2,500,000 fully paid up Warrants amounting to Rs.
25.50 Million were outstanding for conversion into equity shares. The
Company had received the share application money against these Warrants
for conversion into equity shares. During the year ending 31 March,
2010, the Company had allotted 2,500,000 equity shares of face value of
Rs. 2/- each upon conversion of remaining Warrants at a premium of Rs
100/- per equity share as per the terms of issue of Warrants.
5. Secured Loans
a. Cash credit from banks of Rs 674.72 million are secured as follows:
i. Cash credit facility of Rs 547.35 million are secured as follows:
- First pari passu charge on all the current assets of the company.
- Additionally secured by unconditional and irrevocable corporate
guarantee of Network18 Media & Investments Limited
- Cash credit facility of Rs. 159.98 million is additionally secured by
second charge on the Company's movable fixed assets.
ii. Cash credit facility of Rs. 127.37 million is secured by
hypothecation of book debts.
b. The term loan of Rs. 555.02 million taken from banks is secured as
follows:
i. Term loan of Rs. 40 million is secured by:
- First charge on the Company's movable assets, subject to the charges
on current assets created/to be created in favour of the Company's
bankers for securing borrowings for working capital requirements.
- Unconditional and irrevocable personal guarantee of a Director.
- Letter of comfort from Television Eighteen India Limited (TV18)
whereby TV18 undertakes to take all necessary steps to ensure that the
Company fulfils all necessary obligations under the agreement including
arrangement of funds for payment to the bank in accordance with the
terms and conditions of the loan agreement.
ii. Term loan of Rs. 74.03 million is secured by:
- First charge over entire fixed assets pool of IBN7 amounting to Rs
320.40 million as on 31 March 2009
- Unconditional and irrevocable corporate guarantee of Network18 Media
& Investments Limited
iii. Term loan of Rs. 20.15 million is secured by:
- First charge on all movable assets including plant and machinery and
equipment acquired / to be acquired out of the proceeds of the term
loan of IBN7
- Unconditional and irrevocable corporate guarantee of Network18 Media
& Investments Limited
iv. Term loan of Rs. 320.84 million is secured by:
- Subservient charge on all movable fixed assets (all present & future)
of the Company.
- Unconditional and irrevocable corporate guarantee of Network18 Media
& Investments Limited, to remain valid during currency of credit
facility.
v. Term loan of Rs. 100.00 million is secured by:
- Subservient charge on all movable fixed assets (all present & future)
of the Company.
- Unconditional and irrevocable corporate guarantee of Network18 Media
& Investments Limited, to remain valid during currency of credit
facility.
- Exclusive charge over the assets purchased.
c. Other secured loans are secured by hypothecation of vehicle and
plant and machinery.
6. Investments
1. Having regard to the long term investment and strategic involvement
with the Company, no provision is considered necessary for diminution
in the value of following investment and advance for share application
paid:
a. Investments in Viacom18 Media Private Limited (Viacom18)
The Company had in earlier years subscribed to 12 million 'Investor
Warrants' of USD 3.33 (Rs.148.68 approximately) per warrant aggregating
to USD 40 million (Rs.1,786.00 million approximately) in Viacom18 as
follows:
i. Series "A" - 4,500,000 warrants
ii. Series "B" - 4,500,000 warrants
iii. Series "C" - 3,000,000 warrants
and had paid Rs. 1 each for these warrants aggregating to Rs. 12
million.
Each warrant was convertible into one fully paid up equity share of
Viacom18 on exercise of options and on payment of the balance of the
stipulated warrant consideration price. The option was exercisable
during a period of 12, 24 and 36 months from the date of allotment of
warrants of "A", " B ", and "C" series respectively.
As at the year ended 31 March 2011, the Company has an amount of Rs 200
million outstanding towards share application money and Rs. 440.20
million outstanding towards the balance consideration payable for the
subscribed and allotted warrants of Series "C" which warrants are yet
to be converted by Viacom18. These amounts are disclosed under loans
and advances.
The Company's total investments in the capital of Viacom18 is Rs.
6,744.23 million as at the year ended 31 March 2011.
As at 31 March 2011, Viacom18 has accumulated losses and its net worth
has been partially eroded.
b. Investments in IBN Lokmat Private Limited (IBN Lokmat)
The Company had invested Rs 437.75 million in IBN Lokmat. As at 31
March 2011, IBN Lokmat has significant accumulated losses and its net
worth has been substantially eroded.
c. Investment in RVT Media Private Limited (RVT Media)
The Company had invested Rs. 26.20 million (including share application
money) in RVT Media. RVT Media has consolidated accumulated losses and
its networth has been partially eroded.
7. Provision is considered necessary for diminution in the value of
following investment:
a. Investment in ibn18 Mauritius Limited (ibn18 Mauritius)
The Company had invested Rs. 658.94 million (including amount paid for
Debentures) in ibn18 Mauritius. ibn18 mauritius has significant
accumulated losses and its networth has been completely eroded.
Accordingly, the Company had made a provision of Rs. 658.94 million
towards diminution in the value of total investment.
8. Earnings per share (EPS)
Basic earnings per equity share have been computed by dividing net
profit after tax by the weighted average number of equity shares
outstanding for the year ended 31 March, 2011. Diluted earnings per
equity share have been computed using the weighted average number of
equity shares and dilutive potential equity shares outstanding during
the year. The details are:
9. Deferred tax
The Company has carried out its tax computation in accordance with the
mandatory standard on accounting, AS 22 Ã 'Accounting for Taxes on
Income' referred in Companies (Accounting Standards) Rules, 2006. In
view of its significant accumulated losses, the Company has not
provided for deferred tax assets as there is no virtual certainty that
there will be sufficient future taxable income available to realise
such assets. In accordance with the same no deferred tax asset /
liability was required at the year end.
10. Segmental reporting
The Company is engaged in the business of production and telecast of
news and current affairs programmes primarily in India. As the Company
operates in a single business and geographical segment, the reporting
requirements for primary and secondary segment disclosures prescribed
by paragraphs 39 to 51 of Accounting Standard 17 Segment Reporting,
have not been provided in these financial statements.
11. Employee Benefits
a. Description of the Gratuity plan
The gratuity liability arises on retirement, withdrawal, resignation
and death of an employee. The aforesaid liability is calculated on the
basis of fifteen days salary (i.e. last drawn salary plus dearness
allowance) for each completed year of service subject to completion of
five years service.
12. GBN Employees Stock Option Plan 2007 ("ESOP 2007")
a. The Company had established an Employee Stock Option Plan (ESOP
2007) in accordance with the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 which have been approved by the Board of Directors and
the shareholders. A remuneration/ compensation committee comprising
independent, non executive members of the Board of Directors
administers the ESOPs. All options under the ESOPs are exercisable for
equity shares. The Company had declared stock split of 1 equity share
of face value of Rs. 10 each in 5 equity share of Rs. 2 each through
postal ballot dated 19 December 2007, the results of which were
declared on 25 January 2008. The Company plans to grant upto 1,700,000
(8,500,000 options pursuant to split of 1 share of face value of Rs.10
in 5 shares of face value of Rs.2 each) options to eligible employees
and directors of the Company and its subsidiaries and holding company
of the Company.
b. Options which have been granted under ESOP 2007 shall vest with the
grantee equally over a four year period from the date of grant. The
exercise period of the options is a period of two years after the
vesting of the options. Each option is exercisable for one equity share
of Rs. 10 each (for one equity share of Rs 2 each after split) fully
paid up on payment of exercise price (as determined by the
remuneration/compensation committee) of share determined with respect
to the date of grant. The Company has granted 5,020,642 options upto 31
March, 2011.
d. The Finance Act 2009 has abolished Fringe Benefit Tax (FBT) on
Employees' Stock Option Plan, hence there is no charge in these
financial statements.
13. Related Party disclosures
a. Related parties and their relationships Holding Company
i. Network18 Media & Investments Limited (Network18) (formerly
Network18 Fincap Limited)
Subsidiary Companies
i. RVT Media Private Limited (RVT Media)
ii. ibn18 Media and Software Limited (ibn18 Media) (Formerly Jagran TV
Private Limited (Jagran TV)
iii. ibn18 (Mauritius) Ltd w.e.f 1 April, 2009
iv AETN18 Media Private Limited (AETN18) w.e.f 22 November, 2010
Joint Venture
i. IBN Lokmat News Private Limited (IBN Lokmat)
ii. Viacom18 Media Private Limited (Viacom18) w.e.f 1 April, 2009
Fellow Subsidiaries
i. Television Eighteen India Limited (TV18)
ii. Network18 India Holdings Private Limited (N-18 Holding)
iii. Setpro18 Distribution Limited (Setpro18), formerly Setpro 18
Distribution Private Limited
iv. Television Eighteen Mauritius Limited, Mauritius (TEML)
[Subsidiary of TV18]
v. NewsWire18 Limited (Newswire), formerly News Wire18 India Private
Limited till 27 February, 2009 [Subsidiary of TV18]
vi. RVT Investments Private Limited (RVT) [Subsidiary of TV18]
vii. Infomedia 18 Limited (Infomedia) w.e.f 21 August, 2008
[Subsidiary of TV18]
viii. Web18 Holdings Limited, Cayman Islands (Web18 Holding)
[Subsidiary of TEML]
ix. BK Holdings Limited, Mauritius (BKH) [Subsidiary of TEML]
x. TV18 UK Limited (TV18 UK) [Subsidiary of TEML]
xi. E-18 Limited, Cyprus (E-18, Cyprus) [Subsidiary of Web18 Holding]
xii. e-Eighteen.com Limited (E-18) [Subsidiary of E-18, Cyprus]
xiii. Television Eighteen Commoditiescontrol.com Limited (TECCL)
[Subsidiary of E-18, Cyprus]
xiv. Web18 Software Services Limited (Web18) [Subsidiary of E-18,
Cyprus]
xv. Care Websites Private Limited (Care) w.e.f. 14 February, 2008
[Subsidiary of E-18, Cyprus]
xvi. Moneycontrol Dot Com India Limited (MCD) [subsidiary of E-18]
xvii. TV18 Home Shopping Network Limited (TV18 HSN)
xviii.Bigtree Entertainment Private Limited (Bigtree)
xix. Digital18 Media Limited (Digital18) w.e.f. 01 July, 2010
Individual exercising control
i. Raghav Bahl (RB)
Key management personnel and their relatives
i. Sameer Manchanda (SM) upto 22 October, 2010
ii. Rajdeep Sardesai (RS)
iii. Sagarika Ghose (SG)
Entity under significant influence
i. SGA News Limited (SGA News) upto 18 August, 2010
ii. Greycells 18 Media Limited (Greycells)
iii. Digital18 Media Limited (Digital18) upto 30 June, 2010
14. Barter Transactions
During the year ending 31 March, 2011, the Company had entered into
barter transactions, which were recorded at the fair value of
consideration receivable or payable. The Income from operations for the
year ended 31 March, 2011 has been net of, to reflect revenue from
barter transactions of Rs. 102.32 million and expenditure of Rs. 93.93
million being the fair value of barter transactions provided and
received.
15. Transfer Pricing
As per the Transfer Pricing Rules of the Income tax Act, 1961 every
company is required to get a transfer pricing study conducted to
determine whether the international transactions with associated
enterprises were undertaken at an arm's length basis for each financial
year end. Transfer pricing study for the transactions during the year
ended 31 March, 2011 is currently in progress and hence adjustments if
any which may arise there from have not been taken into account in
these financial statements for the year ended 31 March, 2011 and will
be effective in the financial statements for the year ended 31 March,
2012. However in the opinion of the Company's management, adjustments,
if any, are not expected to be material.
16. Disclosures as per Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED)
Based on the information available with the Company, the balance due to
micro and small enterprises as defined under the MSMED Act, 2006 is Rs.
Nil (Previous year Rs. Nil) and no interest has been paid or is payable
under the terms of the MSMED Act, 2006.
17. Foreign exchange forward contracts
The Company does not use foreign currency forward contracts to hedge
its risks associated with foreign currency fluctuations relating to
certain firm commitments and forecasted transactions.
18. Previous year's amounts have been reclassified/ regrouped to
conform to the current year's presentation.
Mar 31, 2010
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company. The signifcant accounting policies adopted in
presentation of the financial statements are:
a. Revenue Recognition
i. Income from media operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on the
accrual basis when advertisements are telecast in accordance with
contractual obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency.
- Facility and equipment rental is accounted for on the accrual basis
for the period of use of equipment by the customers. ii. Dividends on
investments are accounted for when the right to receive dividend is
established.
iii. Interest income is recognized on time proportionate basis, taking
into account the amount outstanding and the rate applicable.
b. Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation less depreciation. All direct expenses
attributable to acquisi- tion/installation of assets are capitalised.
c. Depreciation
Depreciation on all assets other than leasehold improvements and
computer software is charged on straight line basis over the estimated
useful lives, using rates (including double/triple shift depreciation
rates wherever applicable) prescribed by Schedule XIV of the Companies
Act, 1956. Cost of leasehold improvements is being amortised over the
remaining period of lease (including renewal options) of the premises.
Computer software is depreciated over a period of 5 years. These rates
are higher than those prescribed in Schedule XIV of the Companies Act,
1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing Rs. 5,000 or less
individually have been fully depreciated in the year of purchase.
d. Impairment of assets
At each balance sheet date, the Company reviews the carrying amounts of
its fxed assets to determine whether there is any indica- tion that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss.
Recoverable amount is the higher of an assetÃs net selling price and
value in use. In assessing value in use, the estimated future cash fows
expected from the continuing use of the asset and from its disposal are
discounted to their present value using a pre-tax discount rate that
refects the current market assessments of time value of money and the
risks specifc to the asset. Reversal of impairment loss is recognised
immediately as income in the proft and loss account.
e. Inventories
Inventories consist of blank betacam tapes and are stated at cost on
First in First out (FIFO) basis. Stocks of other tapes are written off
at the time of purchase.
f. Investments
Long term investments are stated at cost less Ãother than temporaryÃ
diminution in the value of such investments. Current invest- ments are
carried at lower of cost or fair value.
g. Employee Benefts
i. The CompanyÃs employeeÃs provident fund scheme is a defned
contribution plan. The CompanyÃs contribution to the em- ployeesÃ
provident fund is charged to the proft and loss account during the
period in which the employee renders the related service.
ii. Short term employee benefts (Medical, Leave travel allowance, etc.)
expected to be paid in exchange for the services rendered are
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defned benefit retirement
plan (the "Gratuity Plan") covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employeeÃs salary and the tenure of employment.
The present value of the obligation under such defned beneft plan is
determined based on actuarial valuation using the pro- jected unit
credit method, which recognises each period of service as giving rise
to additional unit of employee beneft entitle- ment and measures each
unit separately to build up the fnal obligation. The obligation is
measured at the present value of the estimated future cash fows. The
discount rate used for determining the present value of the obligation
is based on the market yields on government securities as at the
balance sheet date. Actuarial gains/losses are recognised immediately
in the proft and loss account.
iv. Benefts comprising long term compensated absences constitute other
long term employee benefts. The liability for compen- sated absences is
provided on the basis of an actuarial valuation done by an independent
actuary at the year end. Actuarial gains and losses are recognised
immediately in the proft and loss account.
h. Foreign Currency Translation
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the proft and loss account.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing at
the date of balance sheet, the resultant exchange differences are
recognised in the proft and loss account.
i. Taxation
Income tax comprises current tax, deferred tax and fringe beneft tax.
Current tax and fringe beneft tax are determined in accor- dance with
the provisions of Income Tax Act, 1961. Advance taxes and provisions
for current taxes are presented in the balance sheet after offsetting
advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable income and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
j. Earnings Per Share
The Company reports basic and diluted earnings per equity share in
accordance with AS-20, Accounting Standard on Earnings Per Share. Basic
earnings per equity share is computed by dividing net proft after tax
by the weighted average number of equity shares outstanding during the
year ending 31 March, 2010. Diluted earnings per equity share is
computed using the weighted average number of equity shares and
dilutive potential equity shares outstanding during the year ending 31
March 2010 and except where the results would be anti-dilutive.
k. Borrowing Costs
Borrowing costs that are directly attributable to acquisition,
construction or production of a qualifying asset are capitalised as
part of the cost of that asset when it is probable that they will
result in future economic benefts to the enterprise and the costs can
be measured reliably. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
l. Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reporting balances of assets and
liabilities and disclosures relating to contingent assets and
liabilities as at the date of the financial statements and reporting
amounts of income and expenses during the year. Examples of such
estimates include provision for doubtful debts, future obligations
under employee retirement beneft plans, income taxes, foreseeable
estimated contract losses and useful life of fxed and intangible assets.
Contingencies are recorded when it is probable that a liability will
be incurred, and the amount can be reasonably estimated. Actual results
could differ from such esti- mates. Any revision to accounting estimates
is recognised prospectively in the current and future periods.
m. Employee Stock Option Scheme (ESOS)
Stock options granted to the employees under the stock options schemes
are accounted at intrinsic value as per the accounting treat- ment
prescribed by the guidance note on Employee share based payments issued
by the Institute of Chartered Accountants of India. Accordingly, the
excess of market price, determined as per the guidance note, of
underlying equity shares (market value), over the exercise price of the
options is recognised as deferred stock compensation expense and is
charged to proft and loss account on a straight line basis over the
vesting period of the options. The amortised portion of the cost is
shown under reserves and surplus.
n. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outfow of
resources embodying economic benefts will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but prob- ably
will not, require an outfow of resources.
o. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefts of ownership of the leased asset are classifed as operating
leases. Operating lease charges are recognised as an expense in the
proft and loss account on a straight-line basis over the lease term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and
rewards of ownership are classifed as fnance leases. The lower of fair
value of asset and present value of minimum lease rentals is
capitalised as fxed assets with corresponding amount shown as lease
liability. The principal component in the lease rentals is adjusted
against the lease liability and the inter- est component is charged to
proft and loss account.
p. Barter Transactions
Barter transactions are recognised at the fair value of consideration
receivable or payable. When the fair value of the transactions cannot
be measured reliably, the revenue/expense is measured at the fair value
of the goods/services provided/received adjusted by the amount of cash
or cash equivalent transferred.
q. Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure,
organisation structure and internal reporting systems, the Company
operates in the media business segment mainly comprising media and
related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the
geographical location of customers i.e. within India and overseas.
Mar 31, 2009
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company. The significant accounting policies adopted in
presentation of the financial statements are:
a. Revenue Recognition
i. Income from media operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on the
accrual basis when advertisements are telecast in accordance with
contractual obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency.
- Facility and equipment rental is accounted for on the accrual basis
for the period of use of equipment by the customers. ii. Dividends on
investments are accounted for when the right to receive dividend is
established.
b. Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation less depreciation. All direct expenses
attributable to acquisition/ installation of assets are capitalised.
c. Depreciation
Depreciation on all assets other than leasehold improvements and
computer software is charged on straight line basis over the estimated
useful lives, using rates (including double/triple shift depreciation
rates wherever applicable) prescribed by Schedule XIV of the Companies
Act, 1956.
Cost of leasehold improvements is being amortised over the remaining
period of lease (including renewal options) of the premises.
Computer software is depreciated over a period of 5 years. These rates
are higher than those prescribed in Schedule XIV of the Companies Act,
1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000
individually have been fully depreciated in the year of purchase.
d. Impairment of assets
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss.
Recoverable amount is the higher of an assetÃs net selling price and
value in use. In assessing value in use, the estimated future cash
flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount
rate that refects the current market assessments of time value of money
and the risks specifc to the asset.
Reversal of impairment loss is recognised immediately as income in the
profit and loss account.
e. Inventories
Inventories consist of blank betacam tapes and are stated at cost on
First in First out (FIFO) basis. Stocks of other tapes are written off
at the time of purchase.
f. Investments
Long term investments are stated at cost less other than temporary
diminution in the value of such investments. Current investments are
carried at lower of cost or fair value.
g. Employee Benefits
i. The CompanyÃs employeeÃs provident fund scheme is a defined
contribution plan. The CompanyÃs contribution to the employeesÃ
provident fund is charged to the profit and loss account during the
period in which the employee renders the related service.
ii. Short term employee benefits (Medical, Leave travel allowance,
etc.) expected to be paid in exchange for the services rendered are
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the ÃGratuity PlanÃ) covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employeeÃs salary and the tenure of employment.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the profit
and loss account.
iv. Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
provided on the basis of an actuarial valuation done by an independent
actuary at the year end. Actuarial gains and losses are recognised
immediately in the profit and loss account.
h. Taxation
Income tax comprises current tax, deferred tax and fringe benefit tax.
Current tax and fringe benefit tax are determined in accordance with
the provisions of Income Tax Act, 1961. Advance taxes and provisions
for current taxes are presented in the balance sheet after offsetting
advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable income and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
i. Earnings Per Share
The Company reports basic and diluted earnings per equity share in
accordance with AS-20, Accounting Standard on Earnings Per Share. Basic
earnings per equity share is computed by dividing net profit after tax
by the weighted average number of equity shares outstanding during the
year ending 31 March, 2009. Diluted earnings per equity share is
computed using the weighted average number of equity shares and
dilutive potential equity shares outstanding during the year ending 31
March 2009 except where the results would be anti-dilutive.
j. Borrowing Costs
Borrowing costs that are directly attributable to acquisition,
construction or production of a qualifying asset are capitalised as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the enterprise and the costs can
be measured reliably. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
k. Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reporting balances of assets
and liabilities and disclosures relating to contingent assets and
liabilities as at the date of the financial statements and reporting
amounts of income and expenses during the year. Examples of such
estimates include provision for doubtful debts, future obligations
under employee retirement benefit plans, income taxes, foreseeable
estimated contract losses and useful life of fixed and intangible
assets. Contingencies are recorded when it is probable that a liability
will be incurred, and the amount can be reasonably estimated. Actual
results could differ from such estimates. Any revision to accounting
estimates is recognised prospectively in the current and future
periods.
l. Employee Stock Option Scheme (ESOS)
Stock options granted to the employees under the stock options schemes
are accounted at intrinsic value as per the accounting treatment
prescribed by the guidance note on Employee share based payments issued
by the Institute of Chartered Accountants of India. Accordingly, the
excess of market price, determined as per the guidance note, of
underlying equity shares (market value), over the exercise price of the
options is recognised as deferred stock compensation expense and is
charged to profit and loss account on a straight line basis over the
vesting period of the options. The amortised portion of the cost is
shown under reserves and surplus.
m. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources.
n. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognised as an expense
in the profit and loss account on a straight-line basis over the lease
term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases.
The lower of fair value of asset and present value of minimum lease
rentals is capitalised as fixed assets with corresponding amount shown
as lease liability. The principal component in the lease rentals is
adjusted against the lease liability and the interest component is
charged to profit and loss account.
o. Barter Transactions
Barter transactions are recognised at the fair value of consideration
receivable or payable. When the fair value of the transactions cannot
be measured reliably, the revenue/expense is measured at the fair value
of the goods/services provided/received adjusted by the amount of cash
or cash equivalent transferred.
p. Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure,
organisation structure and internal reporting systems, the Company
operates in the media business segment mainly comprising media and
related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the
geographical location of customers i.e. within India and overseas
1. Scheme of arrangement between Jagran TV Private Limited, BK Fincap
Private Limited and ibn18 Broadcast Limited
The Companys Scheme of Arrangement has been approved by the Honorable
High Court of Delhi on 15 September, 2008 and filed with the Registrar
of Companies on 22 November, 2008. The scheme was to:
- merge IBN 7 News Undertaking of Jagran TV Private Limited (JTV) into
ibn18 with effect from 1 October, 2007 (Appointed date); and
- merge B K Fincap Private Limited (BK Fincap) with ibn18 with effect
from 2 October, 2007 (Appointed date).
Consequent upon these mergers, BK Fincap Private Limited stands
dissolved and Jagran TV Private Limited continue to exist to carry on
the other activities.
a. Merger of ibn7 News Undertaking of JTV into ibn18 (Scheme A)
i. News Business Undertaking of JTV comprising the business activities
of running the ÃIBN7Ã channel along with all related assets,
liabilities and employees has been transferred on a going concern basis
at book value to the company from the appointed date of 1 October 2007.
The company without any further payment has issued 24.23 fully paid up
equity shares of face value of Rs. 10 each (121.15 fully paid up equity
shares of face value of Rs. 2 each) to shareholders of Jagran TV
Private Limited for every 100 Equity shares of face value of Rs. 10
each held in Jagran TV Private Limited.
ii. The scheme became effective on approval by the Honorable High Court
of Delhi and its filing with the Registrar of Companies on 22 November,
2008. The following assets and liabilities of ibn 7 News Undertaking
were transferred to the Company at book value as on the appointed date:
iii. As per the scheme, during the intervening period, JTV shall be
deemed to have been carrying on all business and activities relating to
the merged undertaking on behalf of the ibn18 and all profits accruing
to the Transferor Company, or losses arising or incurred by them
relating to the merged undertaking shall be treated as the profits or
losses of the ibn18.
iv. Debit balance of profit and loss account of Rs. 93,094,889 of IBN 7
News Undertaking for the period 1 October, 2007 to 31 March, 2008 was
adjusted from the opening balance of the profit and loss account of the
previous year.
v. Share application money pending allotment inter-se between the
Company and IBN 7 News Undertaking amounting to Rs. 20,000,000
appearing in the books of accounts of the Company and division stands
cancelled.
b. Merger of BK Fincap Private Limited
i. BK Fincap Private Limited which is a holding company of JTV, along
with all related assets, liabilities and employees has been merged on a
going concern basis at book value to the company from the appointed
date of 2 October, 2007. In consonance to the above mentioned scheme,
ibn18 has issued 1,662.76 fully paid up equity shares of face value of
Rs. 10 each (8,313.80 fully paid up equity shares of face value of Rs.
2 each) to shareholders of BK Fincap Private Limited for every 100
Equity shares of face value of Rs. 10 each held in BK Fincap Private
Limited.
ii. The scheme became effective on approval by the Honorable High Court
of Delhi and its filing with the Registrar of Companies on 22 November,
2008. On the scheme becoming effective, the following assets and
liabilities of BK Fincap Private Limited were transferred to the
Company at book value:
iii. Share application money pending allotment inter-se between the
Company and BK Fincap amounting to Rs. 115,000,000 appearing in the
books of accounts of the respective Companies stands cancelled.
iv. Pursuant to the Scheme of Arrangement, the amount representing the
difference between:
- Assets and liabilities transferred pursuant to the amalgamation of BK
Fincap and consequent cancellation of New Equity shares on Demerger
issued to BK Fincap, and
- Aggregate value of New Equity Shares on Amalgamation and cancellation
of investment by ibn18 in the equity shares of BK Fincap; shall be
debited to the Securities Premium Account of ibn18.
v. Debit balance of profit and loss account of Rs. 36,268 of BK Fincap
for the period 2 October, 2007 to 31 March, 2008 was adjusted from the
opening balance of the profit and loss account of the previous year.
Mar 31, 2008
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company. The significant accounting policies adopted in
presentation of the financial statements are:
a. Revenue Recognition
i. Income from media operations includes:
- Advertisement revenue comprising:
- Revenue from sale of advertising time, which is recognised on the
accrual basis when advertisements are telecast in accordance with
contractual obligations.
- Revenue from sponsorship contracts, which is recognised
proportionately over the term of the sponsorship.
- Subscription revenue which is recognised on accrual basis in
accordance with the terms of the contract with the distribution and
collection agency.
- Facility and equipment rental is accounted for on the accrual basis
for the period of use of equipment by the customers.
ii. Dividends on investments are accounted for when the right to
receive dividend is established.
b. Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation less depreciation. All direct expenses
attributable to acquisition/installation of assets are capitalised.
c. Depreciation
Depreciation on all assets other than leasehold improvements and
computer software is charged on straight line basis over the estimated
useful lives, using rates (including double/ triple shift depreciation
rates wherever applicable) prescribed by Schedule XIV of the Companies
Act, 1956.
Cost of leasehold improvements is being amortised over the remaining
period of lease (including renewal options) of the premises. Computer
software is depreciated over a period of 5 years. These rates are
higher than those prescribed in Schedule XIV of the Companies Act,
1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000
individually have been fully depreciated in the year of purchase.
d. Impairment of assets
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered ah impairment loss. If any such indication
exists, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss.
Recoverable amount is the higher of an assets net selling price and
value in use. In assessing value in use, the estimated future cash
flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount
rate that reflects the current market assessments of time value of
money and the risks specific to the asset. Reversal of impairment loss
is recognised immediately as income in the profit and loss account.
e. Inventories
Inventories consist of blank videotapes and are stated at cost on First
in First out (FIFO) basis. Stocks of other tapes are written off at
the time of purchase.
f. Investments
Long term investments are stated at cost less other than temporary
diminution in the value of such investments. Current investments are
carried at lower of cost or fair value.
g. Employee Benefits
i. The Companys employees provident fund scheme is a defined
contribution plan. The Companys contribution to the employees
provident fund is charged to the profit and loss account during the
period in which the employee renders the related service.
ii. Short term employee benefits (Medical, Leave travel allowance,
etc.) expected to be paid in exchange for the services rendered are
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the "Gratuity Plan") covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employees salary and the tenure of employment.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cashflows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the profit
and loss account.
iv. Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
provided on the basis of an actuarial valuation done by an independent
actuary at the year end. Actuarial gains and losses are recognised
immediately in the profit and loss account.
h. Foreign Currency Translation
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the profit and loss account.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing at
the date of balance sheet, the resultant exchange differences are
recognised in the profit and loss account.
i. Taxation
Income tax comprises current tax, deferred tax and fringe benefit
tax-Current tax and fringe benefit tax are determined in accordance
with the provisions of Income Tax Act, 1961. Advance taxes and
provisions for current taxes are presented in the balance sheet after
off setting advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable income and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
j. Earnings Per Share
The Company reports basic and diluted earnings per equity share in
accordance with AS-20, Accounting Standard on Earnings Per Share. Basic
earnings per equity share is computed by dividing net profit after tax
by the weighted average number of equity shares outstanding during the
year ending 31 March, 2008. Diluted earnings per equity share is
computed using the weighted average number of equity shares and
dilutive potential equity shares outstanding during the year ending 31
March, 2008 except where the results would be anti-dilutive.
k. Borrowing Costs
Borrowing costs that are directly attributable to acquisition,
construction or production of a qualifying asset are capitalised as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the enterprise and the costs can
be measured reliably.
Other borrowing costs are recognised as an expense in the period in
which they are incurred.
I. Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reporting balances of assets
and liabilities and disclosures relating to contingent assets and
liabilities as at the date of the financial statements and reporting
amounts of income and expenses during the year. Examples of such
estimates include provision for doubtful debts, future obligations
under employee retirement benefit plans, income taxes, foreseeable
estimated contract losses and useful life of fixed and intangible
assets. Contingencies are recorded when it is probable that a liability
will be incurred, and the amount can be reasonably estimated. Actual
results could differ from such estimates. Any revision to accounting
estimates is recognised prospectively in the current and future
periods.
m. Employee Stock Option Scheme (ESOS)
Stock options granted to the employees under the stock options schemes
are accounted at intrinsic value as per the accounting treatment
prescribed by the guidance note on Employee share based payments issued
by the Institute of Chartered Accountants of India. Accordingly, the
excess of market price, determined as per the guidance note, of
underlying equity shares (market value), over the exercise price of the
options is recognised as deferred stock compensation expense and is
charged to profit and loss account on a straight line basis over the
vesting period of the options. The amortised portion of the cost is
shown under reserves and surplus.
n. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources.
o. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognised as an expense
in the profit and loss account on a straight-line basis over the lease
term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases.
The lower of fair value of asset and present value of minimum lease
rentals is capitalised as fixed assets with corresponding amount shown
as lease liability. The principal component in the lease rentals is
adjusted against the lease liability and the interest component is
charged to profit and loss account.