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Accounting Policies of Zee Entertainment Enterprises Ltd. Company

Mar 31, 2017

a Basis of preparation

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.

These financial statements for the year ended 31 March 2017 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended 31 March 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under Companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India.

The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2015 being the date of transition to Ind AS.

These financial statements have been prepared and presented under the historical cost convention, on the accural basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.

Reconciliations and descriptions of the effect of the transition has been summarized in note 51.

Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest millions as per the requirement of Schedule III, unless otherwise stated.

Current non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.

b Property, plant and equipment

(i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.

(ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.

c Intangible assets

Intangible assets acquired or developed are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any. Intangible assets - channels includes expenses incurred on development of new television channels till the time it is ready for commercial launch.

d Depreciation / amortisation on property, plant and equipment / intangible assets

Depreciable amount for property, plant and equipment / intangible fixed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

(i) Depreciation on property, plant and equipment is provided on straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed lower than the life prescribed in Schedule II, based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc.

(ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

(iii) I ntangible assets are amortised on straight line basis over their respective individual useful lives estimated by the management.

e Impairment of Property, plant and equipment / intangible assets

The carrying amounts of the Company’s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there are indicators of impairment, an assessment is made to determine whether the asset’s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

An impairment is recognised in statement of profit and loss whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of net selling price, defined as the fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and risks specific to the asset.

An impairment loss for an individual asset or cash generating unit are reversed if there has been a change in estimates used to determine the recoverable amount since the last impairment loss was recognised and is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment loss are recognised in the statement of profit and loss.

f Investment property

investment property are properties (land or a building—or part of a building— or both) held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.

Derecognition of property, plant and equipment / intangibles / investment property

The carrying amount of an item of property, plant and equipment / intangibles / investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is derecognised.

g Leases

(i) Finance lease

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.

(ii) Operating lease

Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Operating Lease payments / revenue are recognised on straight line basis over the lease period in the statement of profit and loss account unless increase is on account of inflation.

h Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.

i Inventories

(i) Media Content :

Media content i.e.Programs,Film rights,Music rights ((completed (commissioned / acquired) and under production)) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, film rights, music rights are expensed / amortised as under :

1 Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast.

2 Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast, as per management estimate of future revenue potential.

3 Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter,

4 Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential.

(ii) Raw Stock : Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.

j Financial Instruments

Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Initial Recognition

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.

(ii) Subsequent Measurement Financial assets

Financial assets are classified into the following specified categories: amortised cost, financial assets ‘at fair value through profit and loss’ (FVTPL), ‘Fair value through other comprehensive income’ (FVTOCI). The classification depends on the Company’s business model for managing the financial assets and the contractual terms of cash flows.

Debt Instrument

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. This category generally applies to trade and other receivables.

Fair value through other comprehensive income (FVTOCI)

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

a The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.

b The asset’s contractual cash flows represent solely payments of principal and interest.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI), However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method,

Fair value through Profit and Loss (FVTPL)

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’),

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss,

Equity investments

The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Company’s right to receive payment is established,

Investment in subsidiaries, joint ventures and associates

Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with IND AS 27 on ""Separate Financial Statements"". Refer note 6 for list of investments,

Derivative financial instruments

Derivative financial instruments are classified and measured at fair value through profit and loss.

Derecognition of financial assets

A financial asset is derecognised only when

i) The Company has transferred the rights to receive cash flows from the asset or the rights have expired or

ii) The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis, The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Financial liabilities and equity instruments

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument,

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs,

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised on the purchase, sale, issue or cancellation of the Company’s own equity instruments,

Financial liabilities Subsequent Measurement

Financial liabilities measured at amortised cost

Financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss.

Financial liabilities measured at fair value through profit or loss (FVTPL) Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL, Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit or loss are carried in the financial statements at fair value with changes in fair value recognized in other income or finance costs in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date.

i n determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

k Borrowings and Borrowing costs

Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the EIR.

Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised as finance costs in the Statement of Profit and Loss.

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur,

l Provisions, contingent liabilities and contingent assets

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of 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 recognized as a finance cost.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.

m Revenue recognition

Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise.

(i) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television broadcasting service to subscribers.

(ii) Sales - Media content is recognised, when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.

(iii) Services

Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.

(iv) Revenue from other services is recognised as and when such services are completed / performed.

(v) Interest income from debt instruments is recognised using the effective interest rate (EIR) method.

(vi) Dividend income is recognised when the Company’s right to receive dividend is established.

(vii) Rent income is recognised on accural basis as per the agreed terms on straight line basis.

n Retirement and other employee benefits

(i) The Company operates both defined benefit and defined contribution schemes for its employees.

For defined contribution schemes the amount charged as expense is equal to the contributions paid or payable when employees have rendered services entitling them to the contributions.

For defined benefit plans, actuarial valuations are carried out at each balance sheet date using the Projected Unit Credit Method. All such plans are unfunded.

All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/ (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability/ (asset) comprising actuarial gains and losses (excluding interest on the net defined benefit liability/ (asset)) are recognised in Other Comprehensive Income (OCI). Such remeasurements are not reclassified to the statement of profit and loss, in the subsequent periods.

(ii) Other long term employee benefits: The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond twelve months, the same is presented as non-current liability.

(iii) Short term employee benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability.

o Transactions in foreign currencies

(i) The functional currency of the Company is Indian Rupees ("Rs.").

Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.

(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.

(iii) Non-monetary foreign currency items are carried at historical cost and translated at the exchange rate prevelant at the date of the transaction.

p Accounting for taxes on income

Tax expense comprises of current and deferred tax.

(i) Current tax

Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Current tax is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Presentation of current and deferred tax

Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except to the extent they relate to items are recognized in other comprehensive income, in which case, the current and deferred tax income / expense are recognised in other comprehensive income.

(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

q Earnings per share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

r Share based payments

The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves.

s Business Combinations

Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations.

The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

Business combinations between entities under common control is accounted for at carrying value,

Transaction costs that the Company incurs in connection with a business combination such as finder’s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred."

t Dividend

Provision is made for the amount of any dividend declared on or before the end of the reporting period but remaining undistributed at the end of the reporting period, where the same has been appropriately authorised and is no longer at the discretion of the entity.

u Contributed equity

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

v Exceptional items

Certain occassions, the size, type, or incidences of the item of income or expenses pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expenses is classified as an exceptional item and accordingly, disclosed in the financial statements.

Critical accounting judgment and estimates

The preparation of financial statements requires management to exercise judgment in applying the Company’s accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including disclosure of contingent liabilities. Actual results may differ from these estimates, Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and in any future periods affected.

a Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that have a low probability of crystallising or are very difficult to quantify reliably, are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. There can be no assurance regarding the final outcome of these legal proceedings.

b Useful lives and residual values

The Company reviews the useful lives and residual values of property, plant and equipment, investment property and intangible assets at each financial year end.

c Impairment testing

i Judgment is also required in evaluating the likelihood of collection of customer debt after revenue has been recognised. This evaluation requires estimates to be made, including the level of provision to be made for amounts with uncertain recovery profiles. Provisions are based on historical trends in the percentage of debts which are not recovered, or on more detailed reviews of individually significant balances,

ii Determining whether the carrying amount of these assets has any indication of impairment also requires judgment. If an indication of impairment is identified, further judgment is required to assess whether the carrying amount can be supported by the net present value of future cash flows forecast to be derived from the asset. This forecast involves cash flow projections and selecting the appropriate discount rate,

d Tax

i The Company’s tax charge is the sum of the total current and deferred tax charges. The calculation of the Company’s total tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process,

ii Accruals for tax contingencies require management to make judgments and estimates in relation to tax related issues and exposures,

iii The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. Where the temporary differences are related to losses, the availability of the losses to offset against forecast taxable profits is also considered. Recognition therefore involves judgment regarding the future financial performance of the particular legal entity or tax Company in which the deferred tax asset has been recognized.

e Fair value measurement

A number of Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non- financial assets and liabilities. When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

-Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

-Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices),

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of a fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of reporting year during which the change has occurred.

f Media Content

The Company has several types of programming inventory: movies, sports and general entertainment. The key area of accounting for inventory requiring judgment is the assessment of the appropriate nature over which programming inventory should be amortised. The key factors considered by the Company are as follows:

i Reality shows, chat shows, events, current affairs, game shows and sports rights: are fully expensed on telecast which represents best estimate of the benefits received from the acquired rights.

ii The cost of program (own production and commissioned program) are amortised over a period of three financial years over which revenue is expected to be generated from exploitation of programs.

iii Cost of movie rights - The Company’s expectation is that substantial revenue from such movies is earned during the period of five years from the date of acquisition of license to broadcast. Hence, it is amortised on a straight line basis over the license period or 60 months from the date of acquisition, whichever is shorter.

iv Music rights are amortised over three financial years starting from the year of commencement of rights over which revenue is expected to be generated from exploitation of rights.

g Defined benefit obligation

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 24, ‘Employee benefits’.

Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the Company from 1 April 2017.

Amendment to Ind AS 7

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. The Company is evaluating the requirements of the amendment and the impact on the financial statements is being evaluated.”


Mar 31, 2016

1 CORPORATE INFORMATION

Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The Company is mainly in the following businesses:

(a) Broadcasting of Satellite Television Channels

(b) Space Selling agent for other satellite television channels

(c) Sale of Media Content i.e. programs/film rights/feeds/music rights

A BASIS OF PREPARATION

The financial statements are prepared on going concern basis in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) and comply in all material aspects with its accounting standards specified under Section 133 of the Companies Act, 2013 (Act) read with Rule 7 of the Companies (Accounts) Rules 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those of previous year

B USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of financial statements and the reported amount of revenue and expenses for the year. Actual results could differ from these estimates. Any revision to such accounting estimate is recognised prospectively in current and future periods

C TANGIBLE FIXED ASSETS

(i) Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment,

(ii) Capital work-in-progress comprises cost of tangible fixed assets and related expenses that are not yet ready for their intended use at the reporting date

D INTANGIBLE ASSETS

Intangible assets acquired or developed are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any. Intangible Asset - channels include expenses incurred on development of new television channels till the time, it is ready for commercial launch

E BORROWING COSTS

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur.

F IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS

At each Balance Sheet date, the Company reviews the carrying amount of assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value

G DEPRECIATION /AMORTISATION ON TANGIBLE/ INTANGIBLE ASSETS

Depreciable amount for tangible / intangible fixed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value (i) Depreciation on tangible fixed assets is provided on straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc.

Aircraft-15 years

Furniture and Fixtures - 5 years

Gas Plant - 20 years

Mobile Phones - 3 years

Plant and Machinery - 5-10 years

Vehicles - 5 years

(ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease

(iii) Intangible assets are amortised over their respective individual useful lives estimated by management,

H INVESTMENTS

(i) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments including investment property are classified as long-term investments

(ii) Current investments are stated at lower of cost and fair market value determined on an individual investment basis. Long-term investments are stated at cost less provision for diminution other than temporary in the value of such investments,

(iii) Investment property

Investment in land which is not intended to be occupied substantially for use by or in the operations of the Company is classified as Investment property and stated at cost. The cost comprises purchase price, borrowing costs, if capitalisation criteria are met and directly attributable cost of bringing the investment property to its working condition for intended use

I TRANSACTIONS IN FOREIGN CURRENCIES

(i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transaction

(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise

iii) Non-monetary foreign currency items are carried at cost,

REVENUE RECOGNITION

Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured,

(i) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognised on time basis on the provision of television broadcasting service to subscribers

(ii) Sales - Media content is recognised, when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms

(iii) Services

Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast,

(iv) Revenue from other services is recognised as and when such services are completed/performed,

(v) Interest income is recognised on a time proportion basis taking into account amount outstanding and the applicable interest rate

(vi) Dividend income is recognised when the Company''s right to receive dividend is established,

(vii) Rent income is recognised on accrued basis as per the agreed terms

K INVENTORIES

(i) Media Content:

Media content i.e. Programs, Film rights, Music rights ((completed (commissioned / acquired) and under production)) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, film rights, music rights are expensed / amortised as under

1 Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast,

2 Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast, as per management estimate of future revenue potential

3 Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter,

4 Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential

(ii) Raw Stock: Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis,

L RETIREMENT AND OTHER EMPLOYEE BENEFITS

(i) Short-term employee benefits are expensed at the undiscounted amount in the Statement of Profit and Loss in the year the employee renders the service,

(ii) Post employment and other long-term employee benefits are recognised as an expense in the Statement of Profit and Loss at the present value of the amount payable determined using actuarial valuation techniques in the year the employee renders the service. Actuarial gains and losses are charged to the Statement of Profit and Loss

(iii) Payment to defined contribution retirement benefit schemes are recognised as an expense in the Statement of Profit and Loss, when due

M ACCOUNTING FOR TAXES ON INCOME

(i) Current Tax is determined as the amount of tax payable in respect of taxable income as per the provisions of the Income Tax Act, 1961

(ii) Deferred tax is recognised, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates and laws

(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

N LEASES

(i) Finance lease

Assets acquired on long-term leases, which in economic terms constitute investments financed on long-term basis i.e. Finance Lease are capitalised and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognised with the asset under lease

(ii) Operating lease

Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases Lease payments / revenue under operating leases are recognised as expense / income on accrual basis in accordance with the respective lease agreements

0 EARNINGS PER SHARE

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive

P PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements


Mar 31, 2015

The financial statements are prepared on going concern basis in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notifed) and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those of previous year.

b Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, on the date of the financial statements and the reported amount of revenue and expenses for the period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

c Tangible fxed assets (i) Tangible fxed assets are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.

(ii) Capital work-in-progress comprises cost of tangible fxed assets and related expenses that are not yet ready for their intended use at the reporting date.

d Intangible assets

Intangible assets acquired are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any.

e Borrowing costs

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur.

f Impairment of tangible and intangible assets At each Balance Sheet date, the Company reviews the carrying amount of assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

g Depreciation / Amortisation on tangible / intangible assets (i) Depreciable amount for tangible fxed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fxed assets is provided on straight- line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc. Aircraft - 15 years Furniture and Fixtures - 5 years Gas Plant - 20 years Mobile Phones - 3 years Plant and Machinery - 5-10 years Vehicles - 5 years.

(ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

(iii) Intangible assets are amortised over their respective individual estimated useful lives on a straight line basis.

h Investments

(i) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classifed as current investments. All other investments including investment property are classifed as long-term investments.

(ii) Current investments are

stated at lower of cost and fair market value determined on an individual investment basis. Long-term investments are stated at cost less provision for diminution other than temporary in the value of such investments.

(iii) Investment property

Investment in land which is not intended to be occupied substantially for use by or in the operations of the Company is classifed as Investment property and stated at cost. The cost comprises purchase price, borrowing costs, if capitalisation criteria are met and directly attributable cost of bringing the investment property to its working condition for intended use.

i Transactions in foreign currencies

(i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transaction.

(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.

(iii) Non-monetary foreign Currency items are carried at cost.

j Revenue recognition

Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

(i) Broadcasting revenue -

Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognised on time basis on the provision of television broadcasting service to subscribers.

(ii) Sales - Media content is recognised, when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.

(iii) Services

Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.

(iv) Revenue from other services is recognised as and when such services are completed / performed.

(v) Interest income is recognised on a time proportion basis taking into account amount outstanding and the applicable interest rate.

(vi) Dividend income is recognised when the Company''s right to receive dividend is established.

k Inventories

(i) Media Content :

Media content i.e. Programs, Film rights, Music rights (completed (commissioned / acquired) and under production) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, flm rights, music rights are expensed / amortised as under :

1 Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast.

2 Programs (other than (1) above) are amortised over three financial years starting from the year of frst telecast, as per management estimate of future revenue potential.

3 Film rights are amortised on a straight-line basis over the licensed period or 60 months from the commencement of rights, whichever is shorter.

4 Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential.

(ii) Raw Stock : Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.

Retirement and other employee benefits

(i) Short-term employee

benefits are expensed at the undiscounted amount in the Statement of Profit and Loss in the year the employee renders the service.

(ii) Post employment and other long-term employee benefits are recognised as an expense in the Statement of Profit and Loss at the present value of the amount payable determined using actuarial valuation techniques in the year the employee renders the service. Actuarial gains and losses are charged to the Statement of Profit and Loss.

(iii) Payment to defned contribution retirement Benefit schemes are recognised as an expense in the Statement of Profit and Loss, when due.

Accounting for taxes on income (i) Current Tax is determined as the amount of tax payable in respect of taxable income as per the provisions of the Income Tax Act, 1961.

(ii) Deferred tax is recognised, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates and laws.

(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

n Leases

(i) Finance lease

Assets acquired under Finance Lease are capitalised and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognised with the asset under lease.

(ii) Operating lease

Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classifed as operating leases. Lease payments / revenue under operating leases are recognised as expense / income on accrual basis in accordance with the respective lease agreements.

o Earnings per share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

p Provisions, contingent liabilities and contingent assets Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. These estimates are reviewed at each reporting date and adjusted to refect the current best estimates. Contingent liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

c) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The fnal dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d) Terms / rights attached to Preference Shares

(i) 6% Cumulative Redeemable Non-Convertible Preference Shares - Listed

During the year ended 31 March 2014, the Company has issued 20,169,423,120 6% Cumulative Redeemable Non-Convertible Preference Shares of Rs. 1 each by way of bonus in the ratio of 21 Bonus Preference Shares of Rs. 1 each fully paid up for every one Equity share of Rs. 1 each fully paid up and are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.

The Company will redeem at par value, 20% of the total Bonus Preference Shares allotted, every year from the fourth anniversary of the date of allotment. The Company shall have an option to buy back the Bonus Preference Shares fully or in parts at an earlier date(s) as may be decided by the Board. Further, if on any anniversary of the date of allotment beginning from the fourth anniversary, the total number of Bonus Preference Shares bought back and redeemed cumulatively is in excess of the cumulative Bonus Preference Shares required to be redeemed till the said anniversary, then there will be no redemption on that anniversary. At the 8th anniversary of the date of allotment, all the remaining and outstanding Bonus Preference Shares shall be redeemed by the Company.

The holders of Bonus Preference Shares shall have a right to vote only on resolutions which directly affect their rights. The holders of Bonus Preference Shares shall also have a right to vote on every resolution placed before the Company at any meeting of the equity shareholders if dividend or any part of the dividend has remained unpaid on the said Bonus Preference Shares for an aggregate period of atleast two years preceding the date of the meeting.

(ii) 6% Non-Cumulative Redeemable Non-Convertible Preference Shares - Unlisted

The Company has issued and alloted 22,273,886 6% Non-Cumulative Redeemable Non-Convertible Preference shares of Rs. 1 each fully paid up, to the shareholders of Diligent Media Corporation Limited, pursuant to the Scheme of Arrangement as referred in Note 43. These Preference shares are redeemable at par at any time within three years from the date of allotment. The preference shareholders shall be entitled to vote only on resolutions which directly affect their rights.

b) Investments made

There are no investments by the Company other than those stated under Note 9 and Note 12 in the Financial Statements.

d) Securities given

There are no securities given during the year.

25 Leases

A. Operating Leases:

(a) The Company has taken office, residential premises and plant and machinery (including equipments) etc. under cancellable / non-cancellable lease agreements that are renewable on a periodic basis at the option of both the Lessor and the Lessee. The initial tenure of the lease is generally from 11 months to 108 months.

(b) In respect of assets given under operating lease :

(i) The Company has given part of its buildings under cancellable operating lease agreement. The initial term of the lease is for 11 to 36 months. (ii) The rental revenue for the year is Rs./Millions 108 (85).


Mar 31, 2014

1. CORPORATE INFORMATION

Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The Company is mainly in the following businesses:

a) Broadcasting of Satellite Television Channels;

b) Space Selling agent for other satellite television channels;

c) Sale of Television Content i .e. programs / film rights / feeds;

d) Production and distribution of films.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The financial statements are prepared on going concern basis in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) and comply in all material respect with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provision of the Companies Act, 1956 read with general circular 8/2014 dated 4 April, 2014, issued by the Ministry of Corporate Affairs. The financial statements have been prepared on accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those of previous year.

b) Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, on the date of the financial statements and the reported amount of revenue and expenses for the period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

c) Tangible fixed assets

(i) Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.

(ii) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

d) Intangible assets

Intangible assets acquired are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any.

e) Borrowing costs

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the asset. All other borrowing costs are expensed in the period they occur.

f) Impairment of tangible and intangible assets

At each Balance Sheet date, the Company reviews the carrying amount of assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

g) Depreciation / Amortisation on tangible / intangible assets

(i) Depreciation on tangible fixed assets is provided on straight line method at the rates specified in Schedule XIV to the Companies Act, 1956 except Aircraft on which depreciation is provided based on estimated useful life of 15 years.

The rate of depreciation so derived is more than the rate prescribed under Schedule XIV.

(ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

(iii) Intangible assets are amortised on a straight line basis over the economic useful life estimated by the management.

h) Investments

(i) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments including investment property are classified as long-term investments.

(ii) Current investments are stated at lower of cost and fair market value determined on an individual investment basis. Long-term investments are stated at cost less provision for diminution other than temporary in the value of such investments.

(iii) Investment property

Investment in land which is not intended to be occupied substantially for use by or in the operations of the Company is classified as Investment property. Investment properties are stated at cost. The cost comprises purchase price, borrowing costs, if capitalisation criteria are met and directly attributable cost of bringing the investment property to its working condition for intended use.

i) Transactions in foreign currencies

(i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.

(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.

(iii) Non-monetary foreign currency items are carried at cost.

j) Revenue recognition

Revenue is recognised to the extent it is probable that economic benefits will flow to the company and the revenue can be reliably measured.

(i) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognised on time basis on the provision of television broadcasting service to subscribers.

(ii) Sales - Television content (including Programs, Film Rights) is recognised, when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.

(iii) Services

1. Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.

2. Theatrical revenue from films is recognised on receipt of related sale reports.

(iv) Revenue from other services is recognised as and when such services are completed / performed.

(v) Interest income is recognised on a time proportion basis taking into account amount outstanding and the applicable interest rate.

(vi) Dividend income is recognised when the Company''s right to receive dividend is established.

k) Inventories

(i) Television Content for Broadcasting :

Television content i.e. Programs, Film rights (completed (commissioned / acquired) and under production) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition /direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, film rights are expensed / amortised as under:

1. Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast.

2. Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast, as per management estimate of future revenue potential.

3. Film rights are amortised on a straight-line basis over the licensed period or 60 months from the commencement of rights, whichever is shorter.

(ii) Films produced and / or acquired for distribution:

Cost is allocated to each right based on management estimate of revenue. Costs of theatrical rights, satellite rights, music rights, home video rights etc are amortised when sold / exploited and residual rights are carried at lower of unamortised cost or net realisable value.

1. Theatrical rights: 70% of allocated cost is amortised over three months of theatrical release of films and balance 30% in subsequent three quarters.

2. Satellite rights, music rights, home video rights etc: Allocated cost of each right is expensed on sale and amortised on exploitation as per (i) (3) above.

3. Negative rights : 90% of the cost is allocated and amortised as per (1) and (2) above and 10% of the cost is allocated to Intellectual Property Rights (IPR) and amortised over subsequent five years.

(iii) Raw Stock : Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.

I) Retirement and other employee benefits

(i) Short-term employee benefits are expensed at the undiscounted amount in the Statement of Profit and Loss in the year the employee renders the service.

(ii) Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss at the present value of the amount payable determined using actuarial valuation techniques in the year the employee renders the service. Actuarial gains and losses are charged to the Statement of Profit and Loss.

m) Accounting for taxes on income

(i) Current Tax is determined as the amount of tax payable in respect of taxable income as per the provisions of the Income Tax Act, 1961.

(ii) Deferred tax is recognised, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates and laws.

n) Leases

(i) Finance Lease

Assets acquired under Finance Lease are capitalised and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognised with the asset under lease.

(ii) Operating Lease

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lesser are classified as operating leases. Lease payments / revenue under operating leases are recognised as expense / income on accrual basis in accordance with the respective lease agreements.

o) Earnings per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

p) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements.

c) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d) Terms / rights attached to Redeemable Preference Shares

During the year, the Company has issued 20,169,423,120 6% Cumulative Redeemable Non- Convertible Preference Shares of Rs. 1/- each by way of bonus in the ratio of 21 Bonus Preference Shares of Rs. 1/- each fully paid up for every one Equity share of Rs. 1/- each fully paid up and listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.

The Company will redeem at par value, 20% of the total Bonus Preference Shares allotted, every year from the fourth anniversary of the date of allotment. The Company shall have an option to buy back the Bonus Preference Shares fully or in parts at an earlier date(s) as may be decided by the Board. Further, if on any anniversary of the date of allotment beginning from the fourth anniversary, the total number of Bonus Preference Shares bought back and redeemed cumulatively is in excess of the cumulative Bonus Preference Shares required to be redeemed till the said anniversary then there will be no redemption on that anniversary. At the 8th anniversary of the date of allotment, all the remaining and outstanding Bonus Preference Shares shall be redeemed by the Company.

The holders of Bonus Preference Shares shall have a right to vote only on resolutions which directly affect their rights. The holders of Bonus Preference Shares shall also have a right to vote on every resolution placed before the Company at any meeting of the equity shareholders if dividend or any part of the dividend has remained unpaid on the said Bonus Preference Shares for an aggregate period of at least two years preceding the date of the meeting.

h) Employees Stock Option Scheme (ESOP)

The Company has instituted an Employee Stock Option Plan (ESOP 2009) as approved by the Board of Directors and Shareholders of the Company in 2009 for issuance of stock options convertible into equity shares not exceeding in the aggregate 5% of the issued and paid up capital of the Company as at 31 March, 2009 i.e. up to 21,700,355 equity shares of Rs. 1 each, to the employees of the Company as well as that of its subsidiaries and also to Non-executive Directors including Independent Directors of the Company at the market price determined as per the Securities and Exchange Board of India (Employee Stock Options Scheme) Guidelines, 1999 (SEBI (ESOS) Guidelines). The said scheme is administered by the Remuneration Committee of the Board.

During the year ended 31 March, 2014, the Company did not grant any stock options. The options earlier granted under the Scheme vested during the year and these would be exercisable at any time within a period of four years from each vesting and the equity shares arising on exercise of options shall not be subject to any lock in.

The options were granted to the employees / directors at an exercise price, being the latest market price as per the SEBI (ESOS) Guidelines. In view of, there being no intrinsic value on the date of the grant (being the excess of market price of share under the Scheme over the exercise price of the option), the Company is not required to account for the value of options as per the SEBI guidelines.

(b) In respect of assets given under operating lease :

(i) The Company has given part of its buildings under cancellable operating lease agreement. The initial term of the lease is for 36 months.

(ii) The rental revenue for the year is Rs./millions 85 (77).


Mar 31, 2013

1 Basis of preparation

The financial statements are prepared under the historical cost convention on going concern basis in accordance with Indian Generally Accepted Accounting Principles (GAAP) and comply in all material aspects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual.

2 Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, on the date of the financial statements and the reported amount of revenue and expenses for the year. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3 Tangible fixed assets

(a) Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.

(b) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

4 Intangible assets

I ntangible assets acquired are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any.

5 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of respective asset. All other borrowing costs are expensed in the year they occur.

6 Impairment of tangible and intangible assets

At each Balance Sheet date, the Company reviews the carrying amount of assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

7 Depreciation / Amortisation on tangible / intangible assets

(a) Depreciation on tangible fixed assets is provided on straight line method at the rates specified in Schedule XIV to the Companies Act, 1956 except Aircraft on which depreciation is provided based on estimated useful life of 15 years. The rate of depreciation so derived is more than the rate prescribed under Schedule XIV

(b) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

(c) Intangible assets are amortised on a straight line basis over the economic useful life estimated by the management.

8 Investments

(a) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments including investment property are classified as long-term investments.

(b) Current investments are stated at lower of cost and market value determined on an individual investment basis. Long-term investments are stated at cost less provision for diminution other than temporary in the value of such investments.

(c) Investment property

I nvestment in land which is not intended to be occupied substantially for use by or in the operations of the Company is classified as Investment property. Investment properties are stated at cost. The cost comprises purchase price, borrowing costs, if capitalisation criteria are met and directly attributable cost of bringing the investment property to its working condition for the intended use.

9 Transactions in foreign currencies

(a) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.

(b) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements are recognised as income or as expenses in the year in which they arise.

(c) Non-monetary foreign currency items are carried at cost.

10 Revenue recognition

(a) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognised on time basis on the provision of television broadcasting service to subscribers.

(b) Sales (including Programs, Film Rights) is recognised, when the significant risks and rewards have been transferred to the customers.

(c) Services

i Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.

ii Theatrical revenue from films is recognised on receipt of related sale reports.

(d) Revenue from other services is recognised as and when such services are completed / performed.

(e) Interest income is recognised on a time proportion basis taking into account principal outstanding and the applicable interest rate.

(f) Dividend income is recognised when the Company''s right to receive dividend is established.

11 Inventories

(a) Television Content for Broadcasting :

Inventories includes Programs, Film rights (completed (commissioned / acquired) and under production) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, film rights are expensed / amortised as under:

i Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast.

ii Programs (other than (i) above) are amortised over three financial years starting from the year of first telecast, as per management estimate of future revenue potential.

iii Film rights are amortised on a straight-line basis over the licensed period or 60 months from the commencement of rights, whichever is shorter.

(b) Films produced and / or acquired for distribution:

Cost is allocated to each right based on management estimate of revenue. Costs of theatrical rights, satellite rights, music rights, home video rights etc are amortised when sold / exploited and residual rights are carried at lower of unamortised cost or net realisable value.

i Theatrical rights: 70% of allocated cost is amortised over three months of theatrical release of films and balance 30% in subsequent three quarters.

ii Satellite rights, music rights, home video rights etc: Allocated cost of each right is expensed on sale and amortised on exploitation as per (a) (iii) above.

iii Negative rights : 90% of the cost is allocated and amortised as per (i) and (ii) above and 10% of the cost is allocated to Intellectual Property Rights (IPR) and amortised over subsequent five years.

(c) Raw Stock : Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.

12 Retirement and other employee benefits

(a) Short-term employee benefits are expensed at the undiscounted amount in the Statement of Profit and Loss in the year the employee renders the service.

(b) Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss at the present value of the amount payable determined using actuarial valuation techniques in the year the employee renders the service. Actuarial gains and losses are charged to the Statement of Profit and Loss.

13 Accounting for taxes on income

(a) Current Tax is determined as the amount of tax payable in respect of taxable income as per the provisions of the Income Tax Act, 1961.

(b) Deferred tax is recognised, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates and laws.

14 Leases

(a) Finance Lease

Assets acquired under Finance Lease are capitalised and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognised with the asset under lease.

(b) Operating Lease

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments / revenue under operating leases are recognised as expense / income on accrual basis in accordance with the respective lease agreements.

15 Earnings Per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except when the results would be anti-dilutive.

16 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2012

1 Basis of Preparation

these financial statements are prepared in accordance with indian Generally Accepted Accounting principles (GAAp) under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notified under section 211 (3c), companies(Accounting standards) rules, 2006, the provisions of the companies Act, 1956 and guidelines issued by the securities and exchange Board of india (sEBI).

2 Use of estimates

the preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

3 Tangible fixed assets

(a) tangible fixed assets are stated at cost, net of accumulated depreciation and impairment losses, if any. cost include all expenses incurred to bring the assets to its present location and condition.

(b) capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

4 Intangible assets

intangible assets acquired are measured on initial recognition at cost. intangible assets are carried at cost less accumulated amortisation and impairment loss, if any.

5 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of respective asset. All other borrowing costs are expensed in the period they occur.

6 Impairment of tangible and intangible assets

At each Balance sheet date, the company reviews the carrying amount of assets to determine whether there is an indication that those assets have suffered impairment loss. if any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. the recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

7 Depreciation / Amortisation on tangible and intangible assets

(a) Depreciation on tangible fixed assets is provided on straight Line method at the rates specified in schedule XiV to the companies Act, 1956.

(b) premium on leasehold land and leasehold improvements are amortized over the period of lease.

(c) intangible assets are amortised on a straight line basis over the economic useful life estimated by the management.

8 Investments

(a) investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments including investment property are classified as long-term investments.

(b) current investments are stated at lower of cost and fair value determined on an individual investment basis. long-term investments are stated at cost less provision for diminution other than temporary in the value of such investments.

(c) investment property

investment in land which is not intended to be occupied substantially for use by or in the operations of the company is classified as investment property, investment properties are stated at cost. the cost comprises purchase price, borrowing costs, if capitalisation criteria are met and directly attributable cost of bringing the investment property to its working condition for the intended use.

9 Transactions in foreign currencies

(a) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions.

(b) Foreign currency monetary items are translated using the exchange rates prevailing at the reporting date. Exchange difference are recognised as income or expense in the period in which they arise.

(c) Non-monetary items denominated in foreign currency are carried at cost.

10 Revenue recognition

(a) Broadcasting revenue - Advertisement revenue (net of agency commission) is recognized when the related advertisement or commercial appears before the public i.e. on telecast. subscription revenue is recognized on completion of service.

(b) sales (includes licensing of Programs, Films / Movie Rights) are recognized, when the delivery is completed.

(c) services

i commission-space selling is recognized when the related advertisement or commercial appears before the public i.e. on telecast.

ii theatrical revenue from movies is recognized on receipt of related sale reports.

(d) Dividend income is recognized when the company's right to receive dividend is established.

(e) interest income is recognized on a time proportion basis taking into account outstanding and the applicable interest rate.

(f) Revenue from other services are recognised as and when such services are completed / performed.

11 Inventories

(a) programs, films / movie rights for Broadcasting :

programs, films / movie rights are carried at lower of unamortized cost or realizable value. Where the realizable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment.

i cost of reality shows / chat shows / events/ game shows and sports rights etc. are fully expensed on telecast.

ii cost of programs (other than (i) above) are amortized over three financial years from the year of telecast as per management estimates of future revenue potential.

iii cost of films/movie rights are charged on a straight-line basis over the license period or 60 months from the date of acquisition, whichever is shorter.

(b) films / movie produced and/or acquired for distribution:

cost is allocated to each rights based on management estimates of revenues and amortization of costs of theatrical rights, satellite rights, music rights, video rights and others are made when sold/exploited and films/movie rights carried at lower of unamortized cost or net realizable value.

i theatrical rights: 70% of allocated cost is amortized over three months of theatrical release of movie and balance 30% in subsequent three quarters.

ii satellite rights, music rights, Home Video rights etc: Allocated cost of each right is expensed on sale.

iii Negative rights : 90% of the cost is allocated and amortized as per b(i) and b(ii) above and 10% of the cost is allocated to intellectual property rights (IpR) and amortized over subsequent five years.

(c) Work- in - progress: programs and films / movies under production are stated at cost. cost comprises of raw stock, cost of services and other expenses incurred upto the date of balance sheet.

(d) raw stock: tapes are valued at lower of cost or estimated net realizable value. cost is taken on Weighted Average basis.

12 Retirement and other employee benefits

(a) short-term employee benefits are expensed at the undiscounted amount in the statement of profit and Loss in the year employee renders the service.

(b) post employment and other long term employee benefits are recognized as an expense in the statement of profit and Loss at the present value of the amount payable determined using actuarial valuation techniques in the year the employee renders the service. Actuarial gains and losses are charged to the statement of profit and Loss.

13 Accounting for taxes on income

(a) current tax is determined as the amount of tax payable in respect of taxable income as per the provisions of the income tax Act, 1961.

(b) Deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates and laws.

14 Leases

(a) finance Lease

Assets acquired under finance Lease are capitalized and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. initial costs directly attributable to lease are recognized with the asset under lease.

(b) Operating Lease

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments/revenue under operating leases are recognized as expense/income on accrual basis in accordance with the respective lease agreements.

15 Earnings Per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except when the results would be anti-dilutive.

16 Provisions, Contingent Liabilities and Contingent Assets

provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. contingent Liabilities are not recognized but are disclosed in the notes. contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2011

1. Basis of Accounting

The Financial statements have been prepared under the historical Cost Convention and on accrual basis in accordance with the accounting standards referred to in section 211 (3C) of the Companies act, 1956.

2. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. actual results could differ from these estimates. any revision to estimates is recognized prospectively in current and future periods.

3. Fixed Assets

a) Fixed assets are stated at original cost of acquisition/ installation net of accumulated depreciation, amortization and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) Capital Work in progress is stated at the amount expended upto the date of Balance sheet including advances for capital expenditure.

c) Computer software including implementation expenses (intangible asset) is capitalized as an intangible asset in the year in which related software is implemented.

4. Borrowing Costs

Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. all other borrowing costs are charged to revenue.

5. Impairment of Assets

at each Balance sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

6. Depreciation/Amortization

a) depreciation on fixed assets is provided on straight Line Method at the rate specified in schedule XIV to the Companies act, 1956.

b) premium on Leasehold Land and Leasehold Improvements are amortized over the period of Lease.

c) Computer software (intangible assets) is amortized on straight line basis over a period of 36 months from the date of its implementation based on the management estimate of useful life.

7. Investments

a) Long Term Investments are carried at cost. provision is made for diminution in value of these investments other than temporary, wherever required.

b) Current Investments are carried at cost or fair value, whichever is lower.

8. Transaction in Foreign Currencies

a) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions.

b) Foreign currency monetary assets and liabilities at the Balance sheet date are translated at the closing rate. Gain and losses resulting on settlement/translation of monetary assets and liabilities are recognized in the profit and Loss account.

c) non-monetary items denominated in foreign currency are carried at cost.

d) In respect of forward exchange contracts assigned to the foreign currency assets/ liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the Balance sheet is recognized in the profit and Loss account. any profit or loss resulting on settlement/ cancellation of forward contract is recognized as income or as expense in the year it arises.

9. Revenue Recognition

a) Broadcasting revenue - advertisement revenue (net of agency commission) is recognized when the related advertisement or commercial appears before the public i.e. on telecast. subscription revenue is recognized on completion of service.

b) sales (includes licensing of programs, Movies and rights) are recognized when the delivery is completed.

c) services

i. Commission-space selling is recognized when the related advertisement or commercial appears before the public i.e. on telecast.

ii. Theatrical revenue from movies is recognized on receipt of related sale reports.

d) dividend is recognized when the right to receive the dividend is unconditional.

e) sMs revenue is recognized on the basis of the counts generated by the computer software.

10. Inventories:

a) Programs ,Movie and Rights :

Programs ,Movie and rights are carried at lower of unamortized cost or realizable value. Where the realizable value on the basis of its useful economic life is less than its carrying amount, the difference is expensed as impairment.

i. Cost of reality shows / chat shows / events/ game shows and sports rights etc. are fully expensed on telecast.

ii. Cost of programs (other than (i) above) are amortized over three financial years from the year of telecast as per management estimates of future revenue potential.

iii. Cost of Movie rights are charged on a straight-line basis over the license period or 60 months from the date of acquisition, whichever is shorter.

b) Movie produced and acquired for distribution:

Cost is allocated to each rights based on management estimates of revenues from each of these rights and amortization of costs of rights of domestic theatrical, International theatrical rights, television rights, music rights, video rights and others are made when sold and movies carried at lower of unamortized cost or net realizable value.

i. Theatrical rights: - 70% cost is allocated and amortized over three months of theatrical release of movie and balance 30% in subsequent three quarters.

ii. allocated cost of satellite rights, Music rights, home Video rights etc are expensed on sale.

iii. In case of negative rights of movies 90% of cost is amortized as per b(i) above and 10% allocated to Ipr is amortized over subsequent nine years.

c) Work- in – progress- programs and movies under production are stated at cost. Cost comprises of material cost, cost of services and other expenses incurred upto the date of balance sheet.

d) raw stock – Tapes are valued at lower of cost or estimated net realizable value. Cost is taken on First in First out (FIFO) basis.

e) education Materials/ equipments are valued at lower of cost or estimated net realizable value. Cost means average cost

11. Retirement Benefits

a) short-term employee benefits are expensed at the undiscounted amount in the profit and loss account in the year employee renders the service.

b) post employment and other long term employee benefits are expensed in the profit and loss account in the year the employee render the service. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

12. Accounting for Taxes on Income

a) Current Tax is determined as the amount of tax payable in respect of taxable income for the year as per the provisions of the Income Tax act, 1961.

b) deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using tax rates and laws enacted.

13. Leases

a) Finance Lease assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognized with asset under lease.

b) Operating Lease

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments/revenue under operating leases are recognized as expense/income on accrual basis in accordance with the respective lease agreements.

14. Miscellaneous Expenditure preliminary expenses are amortized over a period of ten years.

15. Earnings per Share

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. dilutive earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

16. Provisions, Contingent Liabilities and Contingent Assets

provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1. Basis of Accounting

The Financial Statements have been prepared under the Historical Cost Convention and on accrual basis in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognized prospectively in current and future periods.

3. Fixed Assets

a) Fixed assets are stated at original cost of acquisition/ installation net of accumulated depreciation, amortization and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) Capital Work in progress is stated at the amount expended upto the date of Balance sheet including advances for capital expenditure.

c) Computer software including implementation expenses (intangible asset) is capitalized as an intangible asset in the year in which related software is implemented.

4. Borrowing Costs

Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. All other borrowing costs are charged to revenue.

5. Impairment of Assets

At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

6. Depreciation/Amortization

a) Depreciation on fixed assets is provided on Straight Line Method at the rate specified in Schedule XIV to the Companies Act, 1956.

b) Premium on Leasehold Land and Leasehold Improvements are amortized over the period of Lease.

c) Computer Software (intangible assets) is amortized on straight line basis over a period of 36 months from the date of its implementation based on the management estimate of useful life.

7. Investments

a) Long Term Investments are carried at cost. Provision for diminution in value of these investments other than temporary is made , wherever required.

b) Current Investments are carried at cost or fair value whichever is lower.

8. Transaction in Foreign Currencies

a) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions.

b) Foreign currency monetary assets and liabilities at the Balance Sheet date are translated at the closing rate. Gain and losses resulting on settlement/translation of monetary assets and liabilities are recognized in the Profit and Loss Account.

c) Non-monetary items denominated in foreign currency are carried at cost.

d) In respect of forward exchange contracts assigned to the foreign currency assets/ liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the Balance Sheet is recognized in the Profit and Loss Account. Any profit or loss resulting on settlement/ cancellation of forward contract is recognized as income or as expense in the year it arises.

9. Revenue Recognition

a) Broadcasting revenue - Advertisement revenue (net of agency commission) is recognized when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (includes licensing of TV Programs and movies ) are recognized when the delivery is completed.

c) Services

i. Commission-Space selling is recognized when the related advertisement or commercial appears before the public i.e. on telecast.

ii. Theatrical revenue from movies is recognized on receipt of reports

d) Dividend is recognized when the right to receive the dividend is unconditional.

10. Inventories

a) TV Programs and Movie rights (Produced and acquired):

TV Programs and movie rights are carried at lower of unamortized cost or realizable value. Where the realizable value on the basis of its useful economic life is less than its carrying amount, the difference is expensed as impairment.

i. Cost of reality shows / chat shows / events/ game shows etc. are fully expensed on telecast.

ii. TV Programs (other than (i) above) are amortized over three financial years from the year of telecast as per management estimates of future revenue potential.

iii. Movie rights are amortized on a straight-line basis over the license period or 60 months from the date of purchase whichever is shorter.

b) Movie produced and acquired for distribution:

The amortization pertaining to domestic theatrical, International theatrical rights, television rights, music rights, video rights and others are made, based on management estimates of revenues from each of these rights

i. Theatrical rights: - 70% cost is amortized over three months of theatrical release of movie and balance 30% in subsequent three quarters.

ii. Satellite rights, Music rights, Home Video rights etc are expensed on sale.

iii. In case of Negative rights of movies 90% of cost is amortized as per b(i) above and 10% allocated to IPR is amortized over subsequent nine years.

c) TV programs and movies under production are stated at cost. Cost comprises of material cost, cost of services and other expenses incurred upto the date of balance sheet.

d) Raw Stock - Tapes are valued at lower of cost or estimated net realizable value. Cost is taken on First in First out (FIFO) basis.

e) Educational Materials/ Equipments are valued at lower of cost or estimated net realizable value. Cost means average cost.

11. Retirement Benefits

a) Short-term employee benefits are expensed at the undiscounted amount in the profit and loss account in the year employee renders the service.

b) Post employment and other long term employee benefits are expensed in the profit and loss account in the year the employee render the service. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

12. Accounting for Taxes on Income

a) Current Tax is determined as the amount of tax payable in respect of taxable income for the year as per the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using tax rates and laws enacted.

13. Leases

a) Finance Lease

Assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs directly attributable to lease are recognized with asset under lease.

b) Operating Lease

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments/revenue under operating leases are recognized as expense/income on accrual basis in accordance with the respective lease agreements.

14. Miscellaneous Expenditure

Share Issue and Preliminary expenses are amortized over a period of ten years.

15. Earnings Per Share

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

16. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the fnancial statements.

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