Mar 31, 2023
1. CORPORATE INFORMATION
Entertainment Network (India) Limited (the ''Company'') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE''). The Company was incorporated on June 24, 1999 and has its registered office at 4th Floor, A-Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai- 400 013, Maharashtra, India. The Company operates FM radio broadcasting stations in 63 Indian cities under the brand names ''Mirchi'', ''Mirchi Love'', and ''Kool FM''.
The Company''s principal revenue stream is advertising. Advertising revenues are generated through the sale of airtime in the Company''s FM radio broadcasting stations, activations, concerts and monetization of Company''s digital and other media properties.
These standalone financial statements were approved by the Company''s Board of Directors on May 4, 2023.
2. SIGNIFICANT ACCOUNTING POLICIES
i. Basis of preparation
These standalone 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 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendments issued thereafter. The standalone financial statements have been prepared on an accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the standalone financial statements except where a newly issued accounting standard has been adopted or a revision to an existing accounting standard requires a consequent change in the accounting policy hitherto in use.
b. Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle.
An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in the normal operating cycle.
b) Held primarily for the purpose of trading.
c) Expected to be realised within twelve months after the reporting period, or
d) A cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
a) It is expected to be settled in the normal operating cycle.
b) It is held primarily for the purpose of trading.
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Based on the nature of services and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities. The standalone financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities which are measured at fair value (refer note ix below)
c. Functional currency
The functional currency of the Company is the Indian Rupee (''). These standalone financial statements are presented in Indian Rupees rounded off to lakhs.
d. Critical estimates and judgements
The preparation of standalone financial statements requires the use of accounting estimates, which will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies. This note provides an overview of the areas that involved more judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the standalone financial statements.
The areas involving critical estimates or judgements are:
a. Useful life of Property, plant and equipment, investment properties and intangible assets - Refer Note 3, Note 6, Note 7, Note 2(iv), Note 2 (v) and Note 2(vi)
b. Impairment of trade receivables - Refer Note 12 and Note 2(ix)(d)
c. Recognition and recoverability of deferred tax assets - Refer Note 10A, Note 32 and Note 2(xiv)
d. Recognition of Revenue from contracts with customers - Refer Note 26 and Note 2(ii)
e. Current tax expense and payable - Refer Note 32, Note 42 (b) and Note 2(xiv)
f. Measurement of lease liabilities and Right-of-use assets - Refer Note 4, Note 34 and Note 2(xi)
g. Measurement of defined benefit obligation - Refer Note 37 and Note 2(x)
h. Provisions and contingencies, including Royalty - Refer Note 42 (a) and Note 2(xvii)
Estimates and judgements are continuously evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company. The estimates and judgments made by the management are believed to be reasonable under the prevailing circumstances.
ii. Revenue from operations
The core principle of Ind AS 115 - Revenue from Contracts with Customers is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contract with customers.
Revenue from contracts with customers is recognised when control of services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of services rendered is net of variable consideration on account of discounts, volume rebate and any taxes or duties collected on behalf of the government which are levied on revenue such as Goods and Services tax (GST).
The Company provides radio advertising services and Media Solutions to clients. The Company classifies its media solutions as under:
i. Branded Solutions: The Company provides various branded services which include Concerts, Award Shows, On-Air properties, Brand Licensing, Multimedia and Digital services.
ii. Managed Solutions: The Company provides services to manage the intellectual properties, activities or events of Clients.
Revenue from Radio Broadcasting and other services
a. Revenue from radio broadcasting is recognised on an accrual basis on the airing of client''s commercials at a point in time.
b. Revenue from solutions business is recognised, in the period in which the performance obligations are satisfied.
Contract balances
Contract assets
A contract asset is the right to consideration in exchange for services transferred to the customer. Contract assets
are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled revenues (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due or payments are already due but yet to be realized).
Contract Liability
A contract liability is the obligation to transfer services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as revenue when the Company satisfies its performance obligation under the contract. Unearned and deferred revenue is recognised when there are billings in excess of revenues.
The Company disaggregates revenue from contracts with customers by the nature of services it provides to the customers.
The billing schedules agreed with customers include periodic performance based payments. Invoices are payable within contractually agreed credit period.
Use of significant judgements in revenue recognition
a. The Company''s contracts with customers could include promises to transfer multiple services to a customer. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables.
b. Judgement is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume rebates and discount. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.
c. The Company uses judgement to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative stand-alone selling price of each distinct service promised in the contract.
d. The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or existence of enforceable right to payment for performance to date and alternate use of such service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.
iii. Other income
a. Dividends, if any are recognised in statement of profit and loss only when:
i) the right to receive payment is established;
ii) it is probable that the economic benefits associated with the dividend will flow to the Company; and
iii) the amount of the dividend can be measured reliably.
b. Interest income from financial assets is recognised using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
iv. Property, plant and equipment
Property, plant and equipment are stated at acquisition cost less accumulated depreciation and impairment losses, if any. Cost of Property, plant and equipment comprises purchase price, duties, levies (excluding input tax credit), and any directly attributable cost of bringing the asset to its working condition and location for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The present value of the expected cost for the decommissioning of an asset (after its use) is included in the cost of the respective asset if the recognition criteria for a provision are met.
Cost incurred on Property, plant and equipment not ready for their intended use is disclosed as Capital Work-inProgress. Advances paid towards the acquisition of Property, Plant and Equipment outstanding at each balance sheet date are classified as capital advances under other non-current assets. Unpaid amounts towards acquisition of Property, Plant and Equipment outstanding at each balance sheet date are classified under other current financial liabilities if due within one year from the date of these standalone financial statements and under other non-current financial liabilities if due after a year from the date of these standalone financial statements.
Depreciation on Property, plant and equipment other than leasehold improvements, is provided on written down value (WDV) method as per the useful life and in the manner specified in Schedule II to the Act. Leasehold improvements are depreciated on straight line basis, over the lease period.
The estimated useful lives used by the Company to compute depreciation is as under:
Asset class |
Depreciation Method |
Useful lives estimated by the management (in years) |
Building (including compensation paid for use of land) |
WDV |
60 |
Plant and equipments - Studio |
WDV |
15 |
Plant and equipments - Transmission |
WDV |
13 |
Furniture and fixtures |
WDV |
10 |
Office equipment |
WDV |
5 |
Motor vehicles |
WDV |
8 |
Computers |
WDV |
3 |
Computers - Servers |
WDV |
6 |
Leasehold improvements |
Straight Line |
Lease period |
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
An item of Property, Plant & Equipment is derecognised upon disposal and any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
v. Intangible assets
a. Frequency Module (FM) Radio Licenses
Non-Refundable One Time Migration Fee paid by the Company for existing FM Radio licenses upon migration to Phase III of the Licensing policy and Non-Refundable One Time Entry Fee paid by the Company for acquiring new FM radio licenses have been capitalised as an intangible asset. These assets are stated at cost less accumulated amortisation and impairment losses, if applicable.
A summary of amortisation policies applied to the licenses is tabulated below: |
||
Asset class |
Amortization Method |
Useful lives estimated by the management (in years) |
Non-Refundable One Time Migration Fee |
Straight Line |
15 years with effect from April 1, 2015 |
Non-Refundable One Time Entry Fee |
Straight Line |
15 years from the date of operationalisation of the respective stations |
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end and adjusted prospectively, if appropriate.
b. Software
a. Software acquired initially together with hardware is capitalised along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software licenses are treated as revenue expenditure and charged to the statement of profit and loss account in the year of purchase.
b. Expenditure on Enterprise Software such as SAP, Sales CRM and Performance Appraisal Software etc. where the economic benefit is expected to be more than a year is recognised as an âIntangible Asset" and are amortised over a period of 45 to 60 months.
vi. Investment properties
Investment in buildings that is not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. All repairs and maintenance costs incurred for the investment properties are charged to statement of profit and loss account when incurred.
Investment properties are depreciated using the written down value method over their estimated useful lives. Investment properties generally have a useful life of 60 years.
Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes (Refer note 6). Fair values are determined based on an annual evaluation performed by a registered valuer. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical carrying value.
Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.
vii. Borrowing cost
Borrowing cost directly attributable to qualifying assets, which take substantial period to get ready for its intended use, are capitalized to the extent they relate to the period until such assets are ready to be put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
viii. Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the balance sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the statement of profit and loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
ix. Financial instruments
a. Recognition and initial measurement
The Company recognizes trade receivables and trade payables when they are originated at transaction price. AH other financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognised at fair value. In case of financial assets and liabilities that are not measured at fair value through profit or loss, directly attributable transaction costs are added to the fair value on initial recognition.
b. Classification and subsequent measurement
i. Financial assets
The Company classifies its financial assets in the following measurement categories:
¦ those to be measured at fair value through profit or loss; and
¦ those measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
Investments that are intended to be held for not more than a year from the date of investment are classified as current investments. All other investments are termed as long term investments. The portion of long term investments which is expected to be realized within twelve months from the balance sheet date are classified as current investments.
Realised and unrealised gains/ losses arising from changes in the fair value of the âfinancial assets at fair value through profit or loss" investment category are included in the statement of profit and loss in the period in which they arise.
ii. Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest rate method. For trade and other payables, the carrying amounts represents the fair value due to the short maturity of these instruments.
Realised and unrealised gains/ losses arising from changes in the fair value of the âfinancial liabilities at fair value through profit or loss" are included in the statement of profit and loss in the period in which they arise.
iii. Investment in subsidiaries
Investment in subsidiaries are carried at cost less impairment, if any.
c. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109-''Financial Instruments''. A financial liability (or part of a financial liability) is derecognised from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
d. Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in the credit risk.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109- ''Financial Instruments'', which requires expected lifetime losses to be recognised from initial recognition of the receivables. Lifetime losses are the expected credit losses resulting from all possible default events over the expected life of a trade receivables.
The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. Every year, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
x. Employee benefits
a. Defined Contribution Plans:
The Company has defined contribution plans for post-employment benefits such as Provident Fund, National Pension Scheme, Employee''s State Insurance and Employee''s Pension Scheme, 1995. The Company contributes to a government administered Provident Fund, state plan namely Employee''s Pension Scheme, 1995, Employee''s State Insurance Scheme and National Pension Scheme on behalf of its employees and has no further obligation beyond making its contribution.
The Company''s contributions to the above funds are recognised in the statement of profit and loss every year.
b. Defined Benefit Plans:
The Company provides for gratuity benefit, which is a defined benefit plan, covering all its eligible employees. Liability for defined benefit plans is provided based on valuations, as at the balance sheet date, carried out by an independent actuary. The actuarial valuation method used by the independent actuary for measuring the liability is the projected unit credit method.
Actuarial losses and gains are recognised in other comprehensive income and shall not be reclassified to the statement of profit and loss in a subsequent period.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the statement of profit and loss as past service costs.
The Code on Social Security, 2020 (âthe Code") relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
c. Other long term benefits
The Company has other long term benefits namely compensated absences for all its employees. The liabilities in respect of compensated absences which are expected to be encashed / utilised within twelve months from the balance sheet date are current. Other such liabilities are considered non-current.
d. Termination benefits are recognised as an expense as and when incurred.
xi. Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities in respect of future lease payments and Right of Use assets representing the right to use the underlying assets.
i) Right of Use assets
The Company recognises Right of Use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of Use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of Right of Use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right of Use assets are depreciated on a straight-line basis over the lease term.
ii) Lease liabilities
The Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date or April 1, 2019 whichever is later. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification or a change in the lease term or a change in the lease payments.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense in the statement of Profit and loss.
iv) Termination/Modification of lease
The gain or loss arising from termination shall be determined as the difference between the carrying value of lease liability, and the carrying amount of right to use asset. It shall be recognised in statement of profit and loss when the asset is derecognised.
For a lease modification that is not accounted for as a separate lease, the Company accounts for the remeasurement of the lease liability by:
(a) decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease. The Company recognises in profit or loss any gain or loss relating to the partial or full termination of the lease.
(b) making a corresponding adjustment to the right-of-use asset for all other lease modifications.
xii. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts, if any are shown as borrowings under current financial liabilities in the balance sheet.
xiii. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events (such as bonus shares), if any, other than the conversion of potential equity shares that have changed the number of equity shares outstanding without a corresponding change in resources. For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
xiv. Taxes
Tax expense comprises current and deferred tax. Current income tax and deferred tax are measured based on the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
Current Tax
Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Minimum Alternate Tax (MAT)
MAT paid in accordance with tax laws which give rise to future economic benefits in the form of adjustment to future income tax liability is considered as an asset, if there is convincing evidence that the Company will pay normal tax in future. Accordingly, MAT is recognised as a deferred tax asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The Company reviews the ''Minimum Alternate Tax (MAT) Credit Entitlement'' asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Tax assets and liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets, if any are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to the items recognised in other comprehensive income or directly in equity. In such situations, the tax is also recognised in other comprehensive income or directly in equity, as the case may be.
xv. GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of GST, except
a. When the tax incurred on purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
b. The net amount of tax receivable/ payable is included as part of receivables/payables, as the case may be, in the balance sheet.
xvi. Impairment of non-financial assets
The Company assesses at each balance sheet date whether there is any indication that a non-financial asset, other than goodwill, may be impaired. If any such indication exists, the Company estimates the recoverable amount of such asset. If recoverable amount of such asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical carrying value.
Goodwill if any, is not subject to amortisation and is tested for impairment at each reporting date. An impairment loss recognised for goodwill shall not be reversed in a subsequent period.
xvii. Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
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 benefit. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
xviii. Dividends
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividend is recorded as a liability on the date of approval by the Company''s Board of Directors.
xix. License Fees
As per the applicable Frequency Module (FM) broadcasting policy, license fees is recognised in statement of profit and loss at the rate of 4% of gross revenue or minimum fixed fee for the concerned city, whichever is higher. Minimum fixed fee is 2.5% of the Non-Refundable One Time Entry Fee (NOTEF).
However, for the first three years of operations in the States of North East (i.e. Assam and Meghalaya) and Jammu & Kashmir the rate of License fee was 2% of Gross Revenue or 1.25% of NOTEF, whichever was higher.
Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes. Barter advertising contracts are also included in the gross revenue on the basis of relevant billing rates. NOTEF means the successful bid amount arrived at through an ascending e-auction process for private FM Radio Phase-III Channels conducted by the Ministry of Information & Broadcasting (''MIB'').
Mar 31, 2018
1. Significant Accounting Policies
i. Basis of preparation
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016. The financial statements have been prepared on an accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements except where a newly issued accounting standard has been adopted or a revision to an existing accounting standard requires a consequent change in the accounting policy hitherto in use.
Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle.
An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in the normal operating cycle
b) Held primarily for the purpose of trading
c) Expected to be realised within twelve months after the reporting period, or
d) A cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
a) It is expected to be settled in the normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
Based on the nature of services and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities. The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities which are measured at fair value (refer note ix below)
The Functional Currency of the Company is the Indian Rupee (â). These financial statements are presented in Indian Rupees (rounded off to lakhs; one lakh equals one hundred thousand).
ii. Revenue Recognition
Revenue is recognised to the extent it is probable that the 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. The revenue recognised is net of discounts, volume rebate and any taxes or duties collected on behalf of the government which are levied on revenue such as service tax, goods and service tax (GST), etc.
Revenue from Radio Broadcasting and other services
a. Revenue from radio broadcasting is recognised on an accrual basis on the airing of clientâs commercials.
b. Revenue from other services is recognised, in the period in which the services are rendered and where applicable, the percentage completion method is applied.
Other Income
a. Dividends, if any are recognised in statement of profit or loss only when:
i) the right to receive payment is established;
ii) it is probable that the economic benefits associated with the dividend will flow to the Company; and
iii) the amount of the dividend can be measured reliably.
b. Interest income from financial assets is recognised using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
iii. Business Combinations
Business combinations, if any are accounted by using the acquisition method as per Ind AS 103 âBusiness Combinationâ. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at fair value on acquisition date and the amount of any non-controlling interests in the acquiree. Acquisition related costs are expensed as incurred.
Goodwill is initially measured at cost, being the excess of the net acquisition cost and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the net cost of acquisition, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the Company recognises the gain directly in equity as capital reserve, without routing the same through OCI.
iv. Property, Plant and Equipment
Property, Plant and Equipment are stated at acquisition cost less accumulated depreciation and impairment losses, if any. Cost of Property, Plant and Equipment comprises purchase price, duties, levies (excluding input tax credit), and any directly attributable cost of bringing the asset to its working condition and location for the intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The present value of the expected cost for the decommissioning of an asset (after its use) is included in the cost of the respective asset if the recognition criteria for a provision are met.
Cost incurred on Property, Plant and Equipment not ready for their intended use is disclosed as Capital Work-in-Progress. Advances paid towards the acquisition of Property, Plant and Equipment outstanding at each balance sheet date are classified as capital advances under other non-current assets.
Depreciation on Property, Plant and Equipment other than leasehold improvements, is provided on written down value method as per the useful life and in the manner specified in schedule II to the Act. Leasehold improvements are depreciated on straight line basis, over the lease period.
The estimated useful lives used by the Company to compute depreciation is as under:
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
An item of Property, Plant & Equipment is derecognised upon disposal and any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
v. Intangible assets
a. Frequency Module (FM) Radio Licenses
Non-Refundable One Time Migration Fee paid by the Company for existing FM Radio licenses upon migration to Phase III of the Licensing policy and Non-Refundable One Time Entry Fee paid by the Company for acquiring new FM radio licenses have been capitalised as an intangible asset. These assets are stated at cost less accumulated amortisation and impairment losses, if applicable.
A summary of amortisation policies applied to the licenses is tabulated below:
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end and adjusted prospectively, if appropriate.
b. Goodwill
Goodwill represents the cost of business acquisition in excess of the Companyâs interest in the net fair value of identifiable assets and liabilities of the acquisition. Goodwill is measured at cost less accumulated impairment losses, if any.
c. Software
a. Software acquired initially together with hardware is capitalised along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software licenses are treated as revenue expenditure and charged to the statement of profit and loss account in the year of purchase.
b. Expenditure on Enterprise Software such as SAP, Sales CRM and Performance Appraisal Software etc. where the economic benefit is expected to be more than a year is recognised as an âIntangible Assetâ and are amortised over a period of 45 to 60 months.
vi. Investment property
Investment in buildings that is not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. All repairs and maintenance costs incurred for the investment properties are charged to statement of profit and loss account when incurred.
Investment properties are depreciated using the written down value method over their estimated useful lives. Investment properties generally have a useful life of 60 years.
Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes (Refer note 5). Fair values are determined based on an annual evaluation performed by an accredited external independent valuer. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical carrying value.
Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.
vii. Borrowing cost
Borrowing cost directly attributable to qualifying assets, which take substantial period to get ready for its intended use, are capitalized to the extent they relate to the period until such assets are ready to be put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
viii. Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the balance sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the statement of profit and loss.
ix. Financial instruments
a. Recognition and initial measurement
The Company recognizes trade receivables, trade payables and debt securities when they are originated at transaction price. All other financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Except trade receivables and trade payables, all financial assets and liabilities are recognised at fair value. In case of financial assets and liabilities that are not measured at fair value through profit or loss, directly attributable transaction costs are added to the fair value on initial recognition.
b. Classification and subsequent measurement
i. Financial assets
The Company classifies its financial assets in the following measurement categories:
- those to be measured at fair value through profit or loss; and
- those measured at amortised cost.
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
Investments that are intended to be held for not more than a year from the date of investment are classified as current investments. All other investments are termed as long term investments. The portion of long term investments which is expected to be realized within twelve months from the balance sheet date are classified as current investments.
Realised and unrealised gains/ losses arising from changes in the fair value of the âfinancial assets at fair value through profit or lossâ investment category are included in the statement of profit and loss in the period in which they arise.
ii. Financial liabilities
Financial liabilities are subsequently carried at amortised cost using the effective interest rate method. For trade and other payables, the carrying amounts represents the fair value due to the short maturity of these instruments.
Realised and unrealised gains/ losses arising from changes in the fair value of the âfinancial liabilities at fair value through profit or lossâ are included in the statement of profit and loss in the period in which they arise.
iii. Investment in subsidiary
Investment in subsidiary is carried at cost.
c. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109- âFinancial Instrumentsâ. A financial liability (or part of a financial liability) is derecognised from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
d. Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in the credit risk.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109- âFinancial Instrumentsâ, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
x. Employee benefits
a. Defined Contribution Plans:
The Company has defined contribution plans for post-employment benefits such as Provident Fund, National Pension Scheme, Employeeâs State Insurance and Employeeâs Pension Scheme, 1995. The Company contributes to a government administered Provident Fund, state plan namely Employeeâs Pension Scheme, 1995, Employeeâs State Insurance Scheme and National Pension Scheme on behalf of its employees and has no further obligation beyond making its contribution.
The Companyâs contributions to the above funds are recognised in the statement of profit and loss every year.
b. Defined Benefit Plans:
The Company has defined benefit plans namely gratuity for all its employees. Liability for defined benefit plans is provided based on valuations, as at the balance sheet date, carried out by an independent actuary. The actuarial valuation method used by the independent actuary for measuring the liability is the projected unit credit method.
Actuarial losses and gains are recognised in other comprehensive income and shall not be reclassified to the statement of profit and loss in a subsequent period.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the statement of profit or loss as past service costs.
c. Other Long term benefits
The Company has other long term benefits namely compensated absences for all its employees. The liabilities in respect of compensated absences which are expected to be encashed / utilised before twelve months from the balance sheet date are short term. Other such liabilities are considered long term.
d. Termination benefits are recognised as an expense as and when incurred.
xi. Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases net off any lease incentives received from the lessor are charged to the statement of profit and loss on a straight line basis over the period of the lease unless the increase in payments is in line with the expected general inflation.
xii. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts, if any are shown as borrowings under current liabilities in the balance sheet.
xiii. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earnings per share is the net profit for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events (such as bonus shares), if any other than the conversion of potential equity shares that have changed the number of equity shares outstanding without a corresponding change in resources. For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
xiv. Taxes
Tax expense comprises current and deferred tax. Current income tax and deferred tax are measured based on the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
Current Tax
Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period.
Minimum Alternate Tax (MAT)
MAT paid in accordance with tax laws which give rise to future economic benefits in the form of adjustment to future income tax liability is considered as an asset, if there is convincing evidence that the Company will pay normal tax in future. Accordingly, MAT is recognised as a deferred tax asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The Company reviews the âMinimum Alternate Tax (MAT) Credit Entitlementâ asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Tax assets and liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets, if any are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to the items recognised in other comprehensive income or directly in equity. In such situations, the tax is also recognised in other comprehensive income or directly in equity, as the case may be.
Service tax/GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of service tax/ GST, except
a. When the tax incurred on purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
b. The net amount of tax receivable / payable is included as part of receivables / payables, as the case may be, in the balance sheet.
xv. Impairment of non-financial assets
The Company assesses at each balance sheet date whether there is any indication that a non-financial asset, other than goodwill, may be impaired. If any such indication exists, the Company estimates the recoverable amount of such asset. If recoverable amount of such asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical carrying value.
Goodwill is not subject to amortisation and is tested for impairment on each reporting date. An impairment loss recognised for goodwill shall not be reversed in a subsequent period.
xvi. Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
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 benefit. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
xvii. Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of approval by the Companyâs Board of Directors.
xviii. License Fees
As per the applicable Frequency Module (FM) broadcasting policy, license fees is recognised in statement of profit and loss at the rate of 4% of gross revenue or minimum fixed fee for the concerned city, whichever is higher. Minimum fixed fee is 2.5% of the Non-Refundable One Time Entry Fee (NOTEF).
However, in the States of North East (i.e. Assam and Meghalaya) and Jammu & Kashmir the rate of License fee is 2% of Gross Revenue or 1.25% of NOTEF, whichever is higher.
Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes. Barter advertising contracts are also included in the gross revenue on the basis of relevant billing rates. NOTEF means the successful bid amount arrived at through an ascending e-auction process for private FM Radio Phase-III Channels conducted by the Ministry of Information & Broadcasting (âMIBâ).
Mar 31, 2017
i. Basis of Accounting
These financial statements are prepared in accordance with the Indian Accounting Standards (âInd ASâ) under the historical cost convention on an accrual basis except for certain financial instruments which are measured at fair value and defined benefit plans that are measured on actuarial basis, and the provisions of the Companies Act, 2013 (âActâ) (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 - âFirst time adoption of Indian Accounting Standardsâ. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (âIGAAPâ), which was the previous GAAP Reconciliations and descriptions of the effect of the transition have been summarized in Note 49. Accounting policies have been consistently applied except where a newly issued accounting standard has been adopted or a revision to an existing accounting standard requires a consequent change in the accounting policy hitherto in use.
All assets and liabilities have been classified as current or non-current as per the criteria set out in the Schedule III to the Act.
ii. Revenue Recognition
Revenue is recognized to the extent it is probable that the 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. The revenue recognised is net of discounts and service tax.
a. Revenue from radio broadcasting is recognised on an accrual basis on the airing of clientâs commercials.
b. Revenue from other services is recognized, in the period in which the services are rendered and where applicable, the percentage completed method is applied.
iii. Property, Plant and Equipment
Property, Plant and Equipment are stated at acquisition cost less accumulated depreciation and impairment losses, if any. Cost of Property, Plant and Equipment comprises purchase price, duties, levies and any directly attributable cost of bringing the asset to its working condition and location for the intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The present value of the expected cost for the decommissioning of an asset (after its use) is included in the cost of the respective asset if the recognition criteria for a provision are met.
Cost incurred on Property, Plant and Equipment not ready for their intended use is disclosed as Capital Work-in-Progress. Advances paid towards the acquisition of Property, Plant and Equipment outstanding at each balance sheet date are classified as capital advances under other non-current assets.
Depreciation on Property, Plant and Equipment, other than leasehold improvements, is provided on written down value method as per the useful life and in the manner specified in schedule II to the Act. Leasehold improvements are depreciated on straight line basis, over the lease period.
The estimated useful lives used by the Company to compute depreciation is as under:
The residual values are not more than 5% of the original cost of the asset. Property, Plant and Equipment costing less than Rs.5,000 are depreciated fully in the year of purchase. Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
An item of Property, Plant & Equipment is derecognised upon disposal and any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
iv. Intangible assets
a. Frequency Module (FM) Radio Licenses
Non-Refundable One Time Migration Fees paid by the Company for existing FM Radio licenses upon migration to Phase III of the Licensing policy and Non-Refundable One Time Entry Fees paid by the Company for acquiring new FM radio licenses have been capitalised as an intangible asset. These assets are stated at cost less accumulated amortization and impairment losses, if applicable.
b. Goodwill
Goodwill represents the cost of business acquisition in excess of the Companyâs interest in the net fair value of identifiable assets and liabilities of the acquisition. Goodwill is measured at cost less accumulated impairment losses.
c. Software
a. Software acquired initially together with hardware is capitalised along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software licenses are treated as revenue expenditure and charged to the profit and loss account in the year of purchase.
b. Expenditure on Enterprise Software such as SAP, Sales CRM and Performance Appraisal Software etc. where the economic benefit is expected to be more than a year is recognised as an âIntangible Assetâ and are amortised over a period of 45 to 60 months.
v. Investment property
Investment in buildings that is not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property. All repairs and maintenance costs incurred for the investment properties are charged to profit and loss account when incurred.
Investment properties are carried at cost less accumulated depreciation and impairment loss, if any. Investment properties are depreciated using the written down value method over their estimated useful lives. Investment properties generally have a useful life of 60 years.
vi. Borrowing cost
Borrowing cost directly attributable to qualifying assets, which take substantial period to get ready for its intended use, are capitalized to the extent they relate to the period until such assets are ready to be put to use. Other borrowing costs are recognized as an expense in the period in which they are incurred.
vii. Foreign currency transactions
The Functional Currency of the Company is the Indian Rupee. These financial statements are presented in Indian Rupees (rounded off to lakhs; one lakh equals one hundred thousand).
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the balance sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the statement of profit and loss.
viii. Financial instruments
a. Recognition and initial measurement
The Company recognizes trade receivables and debt securities when they are originated at transaction price. All other financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Except trade receivables, all financial assets and liabilities are recognised at fair value. In case of financial assets and liabilities that are not measured at fair value through profit or loss, directly attributable transaction costs are added to the fair value on initial recognition.
b. Classification and subsequent measurement
i. Financial assets
The Company classifies its financial assets in the following measurement categories:
- those to be measured at fair value through profit or loss; and
- those measured at amortised cost.
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
Investments that are intended to be held for not more than a year from the date of investment are classified as current investments. All other investments are termed as long term investments. The portion of long term investments which is expected to be realized within twelve months from the balance sheet date is classified as current investments.
Changes in the fair value of financial assets at fair value through profit or loss are recognised as gain/(losses) in the statement of profit and loss.
ii. Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest rates method. For trade and other payables, the carrying amounts represents the fair value due to the short maturity of these instruments.
Changes in the fair value of financial liabilities at fair value through profit or loss are recognised as gain/(losses) in the statement of profit and loss.
iii. Investment in subsidiary
Investment in subsidiary is carried at cost.
c. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109 - âFinancial Instrumentsâ. A financial liability (or part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
d. Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in the credit risk.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 - âFinancial Instrumentsâ, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
e. Income recognition
i. Dividends are recognised in statement of profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
ii. Interest income from financial assets is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
ix. Employee benefits
a. Defined Contribution Plans:
The Company has defined contribution plans for post-employment benefits such as Provident Fund, National Pension Scheme and Employeeâs Pension Scheme, 1995. The Company contributes to a government administered Provident Fund, state plan namely Employeeâs Pension Scheme, 1995 and National Pension Scheme on behalf of its employees and has no further obligation beyond making its contribution.
The Companyâs contributions to the above funds are recognized in the statement of profit and loss every year.
b. Defined Benefit Plans:
The Company has defined benefit plans namely gratuity for all its employees. Liability for Defined Benefit Plans is provided based on valuations, as at the balance sheet date, carried out by an independent actuary. The actuarial valuation method used by the independent actuary for measuring the liability is the projected unit credit method.
Actuarial losses and gains are recognized in other comprehensive income and shall not be reclassified to the statement of profit and loss in a subsequent period.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the statement of profit or loss as past service costs.
c. Other Long term benefits
The Company has other long term benefits namely compensated absences for all its employees. The liabilities in respect of compensated absences which are expected to be encashed / utilised before twelve months from the balance sheet date are short term. Other such liabilities are considered long term.
d. Termination benefits are recognised as an expense as and when incurred.
x. Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases net off any lease incentives received from the lessor are charged to the statement of profit and loss on a straight line basis over the period of the lease unless the increase in payments is in line with the expected general inflation.
xi. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts, if any are shown as borrowings under current liabilities in the balance sheet.
xii. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events (such as bonus shares) other than the conversion of potential equity shares that have changed the number of equity shares outstanding without a corresponding change in resources. For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
xiii. Income taxes
Tax expense comprises current and deferred tax. Current income tax and deferred tax are measured based on the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give rise to future economic benefits in the form of adjustment to future income tax liability is considered as an asset, if there is convincing evidence that the Company will pay normal tax in future. Accordingly, MAT is recognised as a deferred tax asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The Company reviews the âMinimum Alternate Tax (MAT) Credit Entitlementâ asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward.
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. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.
Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to the items recognised in other comprehensive income or directly in equity. In such situations, the tax is also recognised in other comprehensive income or directly in equity, as the case may be.
xiv. Impairment of non-financial assets
The Company assesses at each balance sheet date whether there is any indication that a non-financial asset, other than goodwill, may be impaired. If any such indication exists, the Company estimates the recoverable amount of such asset. If recoverable amount of such asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical carrying value.
Goodwill is not subject to amortisation and is tested for impairment on each reporting date. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
xv. Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
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 benefit. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
xvi. Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of approval by the Companyâs Board of Directors.
xvii. Business combinations
Business combinations are accounted by using the acquisition method as per Ind AS 103 âBusiness Combinationâ. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at fair value on acquisition date and the amount of any non-controlling interests in the acquiree. Acquisition related costs are expensed as incurred.
Goodwill is initially measured at cost, being the excess of the net acquisition cost and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the net cost of acquisition, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the Company recognises the gain directly in equity as capital reserve, without routing the same through OCI.
xviii.License Fees
As per the applicable Frequency Module (FM) broadcasting policy, license fees is recognized in statement of profit and loss at the rate of 4% of gross revenue for the financial year or minimum fixed fee for the concerned city, whichever is higher. Minimum fixed fee is 2.5% of the Non-Refundable One Time Entry Fees (NOTEF).
Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes. Barter advertising contracts are also included in the gross revenue on the basis of relevant billing rates. NOTEF means the successful bid amount arrived at through an ascending e-auction process for private FM Radio Phase-III Channels conducted by the Ministry of Information & Broadcasting (âMIBâ).
Mar 31, 2016
Company Information
Entertainment Network (India) Limited (the ''Company'') is a public
limited company domiciled in India and is listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE). The Company was
incorporated on June 24, 1999. As on March 31, 2016, the Company
operated FM radio broadcasting stations in 37 Indian cities under the
brand name ''Radio Mirchi''.
The Company''s principal revenue stream is advertising. Advertising
revenues are generated through the sale of air time in the Company''s FM
radio broadcasting stations, activations and monetization of Company''s
media properties.
i. Basis of Accounting
The financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on an accrual basis. The financial statements comply in
all material respects with the accounting standards notified under
section 133 of the Companies Act 2013, read together with paragraph 7
of the Companies (Accounts) Rules 2014.The accounting policies have
been consistently applied by the Company and are consistent with those
followed in the previous year.
ii. Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires Management to make
judgments, estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent liabilities as
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates. Any revision to such accounting estimates
is recognised prospectively in the accounting period in which such
revision takes place except where otherwise noted.
iii. Revenue Recognition
a. Revenue from Operations
i. Revenue from radio broadcasting is recognised on an accrual basis
on the airing of client''s commercials. The revenue that is recognised
is net of service tax.
ii. Revenue from other services is recognized, as and when services
are rendered and where applicable, the percentage completed method is
applied.
b. Other Income
i. Dividend income on mutual fund units is accounted for when the
right to receive the dividend is established by the balance sheet date.
ii. Interest income is recognised on a time proportionate basis taking
into account the amount outstanding and the rate applicable.
iii. Profit on sale of units of mutual funds is recognised at the time
of redemption and is determined as the difference between the
redemption price and the carrying value.
iv. Fixed Assets and Depreciation
a. Tangible Fixed Assets
Tangible fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of tangible fixed
assets comprises purchase price, duties, levies and any directly
attributable cost of bringing the asset to its working condition and
location for the intended use.
Subsequent costs are included in the asset''s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset
is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are
incurred.
Cost incurred on assets not ready for their intended use is disclosed
as Capital Work-in-Progress.
Depreciation on tangible fixed assets is provided on written down value
method as per the useful life and in the manner specified in Schedule
II to the Act.
b. Intangible Assets (other than Software)
Non Refundable One Time Migration Fees paid by the Company for existing
licenses upon migration to Phase III of the Licensing policy and Non
Refundable One Time Entry Fees paid by the Company for acquiring new
licenses have been capitalised as an asset.
c. Software
i. Software obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on Enterprise Software such as SAP, Sales CRM and
Performance AppraisalSoftware where the economic benefit is expected to
be more than a year is recognised as ''Intangible Asset'' and amortised.
Sales CRM is amortised over a period of 45 months. Performance
Appraisal Software is amortised over a period of 5 years.
d. Borrowing Cost
Borrowing cost directly attributable to qualifying assets, which take
substantial period to get ready for its intended use, are capitalized
to the extent they relate to the period until such assets are ready to
be put to use. Other borrowing costs are recognized as an expense in
the period in which they are incurred.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
balance sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the statement of
profit and loss.
vi. Investments
Investments that are intended to be held for not more than a year from
the date of investment are classified as current investments. All other
investments are termed as long term investments. The portion of long
term investments which is expected to be realized within twelve months
from the balance sheet date are classified as current investments.
Investment in buildings that are not intended to be occupied
substantially for use by, or in the operations of the Company, have
been classified as investment property. The same has been classified as
long term investments.
Current investments are carried at cost or fair value, whichever is
lower. Long term investments are stated at cost. However, provision for
diminution in value is made to recognise a decline other than temporary
in the value of the long term investments.
vii. Employee Benefits
a. Defined Contribution Plans :
The Company has Defined Contribution Plans for post-employment benefits
such as Provident Fund, National Pension Scheme and Employee''s Pension
Scheme, 1995. Under the Provident Fund Plan, the Company contributes to
a Government administered Provident Fund on behalf of its employees and
has no further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee''s Pension
Scheme, 1995 and has no further obligation beyond making its
contribution. The Company contributes to a Government administered
National Pension Scheme on behalf of its employees and has no further
obligation behond making its contribution. The Company''s contributions
to the above funds are recognized in the statement of profit and loss
every year.
b. Defined Benefit Plans :
The Company has Defined Benefit Plans namely gratuity and compensated
absences for all its employees. The liabilities in respect of
compensated absences which are expected to be encashed/ utilised before
twelve months from the balance sheet date are considered short term.
Other such liabilities are considered long term.
Liability for Defined Benefit Plans is provided on the basis of
valuations, as at the balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
Actuarial losses / gains are recognised in the statement of profit and
loss in the year in which they arise.
c. Termination benefits are recognised as an expense as and when
incurred.
viii. Operating Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
statement of profit and loss on a straight-line basis over the period
of the lease.
ix. Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, demand deposits with
banks, other short-term highly liquid investments with original
maturities of three months or less.
x. Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company''s earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events (such as bonus shares) other than the
conversion of potential equity shares that have changed the number of
equity shares outstanding without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xi. Income Taxes
Tax expense comprises current and deferred tax. Current income tax and
deferred tax are measured based on the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961.
Current tax assets and liabilities are offset when there is a legally
enforceable right to set off the recognized amounts and there is an
intention to settle the asset and the liability on a net basis.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give
rise to future economic benefits in the form of adjustment to future
income tax liability is considered as an asset, if there is convincing
evidence that the Company will pay normal tax in future. Accordingly,
MAT is recognised as an asset in the balance sheet when it is probable
that the future economic benefit associated with it will flow to the
Company and the asset can be measured reliably. The Company reviews the
''Minimum Alternate Tax (MAT) Credit Entitlement'' asset at each
reporting date and writes down the asset to the extent the Company does
not have convincing evidence that it will pay normal tax during the
specified period i.e. the period for which MAT credit is allowed to be
carried forward.
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised. Deferred tax assets and
liabilities are measured using the tax rates that have been enacted or
substantively enacted by the balance sheet date.
xii. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
xiii. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
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 benefit. Where
there is a possible obligation or a present obligation but the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
xiv. License Fees
As per the applicable Frequency Module (FM) broadcasting policy,
license fees is charged to revenue at the rate of 4% of gross revenue
for the financial year or minimum fixed fee for the concerned city,
whichever is higher. Minimum fixed fee is 2.5% of the Non-Refundable
One Time Entry Fee (NOTEF). During the previous year, minimum fixed fee
was 10% of the Reserve One Time Entry Fee (ROTEF).
Gross Revenue for this purpose shall mean revenue on the basis of
billing rates inclusive of any taxes. Barter advertising contracts are
also included in the gross revenue on the basis of relevant billing
rates. NOTEF means the successful bid amount arrived at through an
ascending e-auction process for first batch of private FM Radio
Phase-Ill Channels conducted by the Ministry of Information &
Broadcasting (''MIB''). ROTEF means 25% of highest valid bid in the
city.
Mar 31, 2015
I. Basis of Accounting
The financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on an accrual basis. The financial statements comply in
all material respects with the accounting standards notified under
section 133 of the Companies Act 2013, read together with paragraph 7
of the Companies (Accounts) Rules 2014. The accounting policies have
been consistently applied by the Company and are consistent with those
followed in the previous year.
ii. Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires Management to make
judgments, estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent liabilities as
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates. Any revision to such accounting estimates
is recognised prospectively in the accounting period in which such
revision takes place except where otherwise noted.
iii. Revenue Recognition
a. Revenue from Operations
i. Revenue from radio broadcasting is recognised on an accrual basis
on the airing of client''s commercials. The revenue that is recognised
is net of service tax.
ii. Revenue from other services is recognized, as and when services
are rendered and where applicable, the percentage completed method is
applied.
b. Other Income
i. Dividend income on mutual fund units is accounted for when the
right to receive the dividend is established by the balance sheet date.
ii. Interest income is recognised on a time proportionate basis taking
into account the amount outstanding and the rate applicable.
iii. Profit on sale of units of mutual funds is recognised at the time
of redemption and is determined as the difference between the
redemption price and the carrying value.
iv. Fixed Assets and Depreciation
a. Tangible Fixed Assets
Tangible fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of tangible fixed
assets comprises purchase price, duties, levies and any directly
attributable cost of bringing the asset to its working condition and
location for the intended use.
Borrowing cost directly attributable to fixed assets which take
substantial period of time to get ready for its intended use are
capitalised to the extent they relate to the period till such assets
are ready to be put to use.
Cost incurred on assets not ready for their intended use is disclosed
as Capital Work-in-Progress.
Depreciation on tangible fixed assets is provided on written down value
method as per the useful life and in the manner specified in Schedule
II to the Act.
The estimated useful lives used by the Company to provide depreciation
is as under:
Asset class Useful lives estimated by the
management (years)
Buildings 60
Plant and Machinery studio 15
Plant and Machinery transmission 13
Furniture and fixtures 10
Office equipment 5
MotorVehicles 8
Leasehold improvements Life based on lease period
Computers 3
Computers - Servers 6
b. Intangible Assets (other than Software)
Migration fees paid by the Company for existing licenses upon migration
to Phase II of the Licensing policy and One Time Entry Fees paid by the
Company for acquiring new licenses have been capitalised as an asset.
A summary of amortization policies applied to the Company''s intangible
assets is tabulated below:
Asset class Useful lives estimated by the management
Migration Fee 10 years with effect from April 1,2005
One Time Entry Fees 10 years from the date of operationalisation
of the respective stations
Goodwill 5 years
c. Software
i. Software obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on Enterprise Software such as SAP and Sales CRM where
the economic benefit is expected to be more than a year is recognised
as "Intangible Asset" and amortised. Sales CRM is amortised over a
period of 45 months.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
balance sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the statement of
profit and loss.
vi. Investments
Investments that are intended to be held for not more than a year from
the date of investment are classified as current investments. All other
investments are termed as long term investments. The portion of long
term investments which is expected to be realized within twelve months
from the balance sheet date are classified as current investments.
Investment in buildings that is not intended to be occupied
substantially for use by, or in the operations of the Company, have
been classified as investment property. The same has been classified as
long term investments.
Current investments are carried at cost or fair value, whichever is
lower. Long term investments are stated at cost. However, provision
for diminution in value is made to recognise a decline other than
temporary in the value of the long term investments.
vii. Employee Benefits
a. Defined Contribution Plans :
The Company has Defined Contribution Plans for post employment benefits
such as Provident Fund and Employee''s Pension Scheme, 1995. Under the
Provident Fund Plan, the Company contributes to a Government
administered Provident Fund on behalf of its employees and has no
further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee''s Pension
Scheme, 1995 and has no further obligation beyond making its
contribution. The Company''s contributions to the above funds are
recognized in the statement of profit and loss every year.
b. Defined Benefit Plans :
The Company has Defined Benefit Plans namely gratuity and compensated
absences for all its employees. The liabilities in respect of
compensated absences which are expected to be encashed / utilised
before / after twelve months from the balance sheet date are considered
to be short term/ long term in nature respectively.
Liability for Defined Benefit Plans is provided on the basis of
valuations, as at the balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
Actuarial losses / gains are recognised in the statement of profit and
loss in the year in which they arise.
c. Termination benefits are recognised as an expense as and when
incurred.
viii. Operating Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
statement of profit and loss on a straight- line basis over the period
of the lease.
ix. Cash and Cash Equivalents
In the Cash Flow Statement, cash and cash equivalents include cash in
hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less.
x. Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company''s earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, (such as bonus shares) other than the
conversion of potential equity shares that have changed the number of
equity shares outstanding without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xi. Income Taxes
Tax expense comprises current and deferred tax. Current income tax and
deferred tax are measured based on the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961.
Current tax assets and liabilities are offset when there is a legally
enforceable right to set off the recognized amounts and there is an
intention to settle the asset and the liability on a net basis.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give
rise to future economic benefits in the form of adjustment to future
income tax liability is considered as an asset, if there is convincing
evidence that the Company will pay normal tax in future. Accordingly,
MAT is recognised as an asset in the balance sheet when it is probable
that the future economic benefit associated with it will flow to the
Company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised. Deferred tax assets and
liabilities are measured using the tax rates that have been enacted or
substantively enacted by the balance sheet date.
xii. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
xiii. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
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 benefit. Where
there is a possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
xiv. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April
1,2005 license fees are charged to revenue at the rate of 4% of gross
revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for
the concerned city, whichever is higher. Gross Revenue for this purpose
shall mean revenue on the basis of billing rates inclusive of any
taxes. Barter advertising contracts shall also be included in the gross
revenue on the basis of relevant billing rates. ROTEF means 25% of
highest valid bid in the city.
Mar 31, 2014
Notes forming part of the Financial Statements
Company Information
Entertainment Network (India) Limited (the ''Company'') is a public
limited company domiciled in India and is listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE). The Company was
incorporated on June 24, 1999. The Company operates FM radio
broadcasting stations in 32 Indian cities under the brand name ''Radio
Mirchi''.
The Company''s principal revenue stream is advertising. Advertising
revenues are generated through the sale of air time in the Company''s FM
radio broadcasting stations.
1. Significant Accounting Policies i. Basis of Accounting
The financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on an accrual basis. Pursuant to circular 15/2013 dated
13.09.2013 read with circular 08/2014 dated 04.04.2014, till the
standards of accounting or any addendum thereto are prescribed by
Central Government in consultation with or pursuant to the
recommendation of the National Financial Reporting Authority, the
existing Accounting Standards notified under the Companies Act, 1956
("the Act") shall continue to apply. Consequently, these financial
statements have been prepared to comply in all material aspects with
the accounting standards notified under Section 211(3C) [Companies
(Accounting Standards) Rules, 2006, as amended] and other relevant
provisions of the Companies Act,1956. The accounting policies have
been consistently applied by the Company and are consistent with those
followed in the previous year.
All assets and liabilities have been classified as current or
non-current as per the criteria set out in the Revised Schedule VI to
the Act.
ii. Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities as at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates. Any revision to such
accounting estimates is recognised prospectively in the accounting
period in which such revision takes place.
iii. Revenue Recognition
a. Revenue from Operations
i. Revenue from radio broadcasting is recognised on an accrual basis
on the airing of client''s commercials. The revenue that is recognised
is net of service tax. ii. Revenue from services is recognised when
the result of the transactions can be determined with reliability and
on the percentage completed basis.
b. Other Income
i. Dividend income on mutual fund units is accounted for when the
right to receive the dividend is established by the Balance Sheet date.
ii. Interest income is recognised on a time proportionate basis taking
into account the amount outstanding and the rate applicable.
iii. Profit on sale of units of mutual funds is recognised at the time
of redemption and is determined as the difference between the
redemption price and the carrying value.
iv. Fixed Assets and Depreciation
a. Tangible Fixed Assets
Tangible fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any. Cost of tangible fixed assets comprises
purchase price, duties, levies and any directly attributable cost of
bringing the asset to its working condition and location for the
intended use. Borrowing cost directly attributable to fixed assets
which take substantial period of time to get ready for its intended use
are capitalised to the extent they relate to the period till such
assets are ready to be put to use.
Cost incurred on assets not ready for their intended use is disclosed
as Capital Work-in-Progress.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements are amortised over the primary
period of lease of the property. Leasehold land is not amortised since
the term of lease is perpetual in nature. Tangible assets individually
costing less than Rupees 5,000 are depreciated fully in the year of
purchase.
b. Intangible Assets (other than Software)
Migration fees paid by the Company for existing licenses upon migration
to Phase II of the Licensing policy and One Time Entry Fees paid by the
Company for acquiring new licenses have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from
April 1, 2005, equally over a period of ten years, being the period of
the license. One Time Entry Fees is amortised over a period of ten
years, being the period of license, from the date of operationalisation
of the respective stations.
Goodwill is amortised over a period of five years.
c. Software
i. Software obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on Enterprise Software such as SAP and Sales CRM where
the economic benefit is expected to be more than a year is recognised
as "Intangible Asset" and amortised.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
Balance Sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the Statement of
Profit and Loss.
vi. Investments
Investments that are intended to be held for not more than a year from
the date of investment are classified as Current investments. All other
investments are termed as Long term investments. The portion of Long
term investments which is expected to be realized within twelve months
from the Balance Sheet date are classified as Current investments.
Investment in buildings that is not intended to be occupied
substantially for use by, or in the operations of the Company, have
been classified as investment property. The same has been classified as
Long term investments. Investment property is carried at cost less
accumulated depreciation.
Current investments are carried at cost or fair value, whichever is
lower. Long term investments are stated at cost. However, provision for
diminution in value is made to recognise a decline other than temporary
in the value of the Long term investments.
vii. Employee Benefits
a. Defined Contribution Plans :
The Company has Defined Contribution Plans for post employment benefits
such as Provident Fund and Employee''s Pension Scheme, 1995. Under the
Provident Fund Plan, the Company contributes to
a Government administered Provident Fund on behalf of its employees and
has no further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee''s Pension
Scheme, 1995 and has no further obligation beyond making its
contribution.
The Company''s contributions to the above funds are recognized in the
Statement of Profit and Loss every year.
b. Defined Benefit Plans :
The Company has Defined Benefit Plans namely Gratuity and Compensated
Absences for all its employees. The liabilities in respect of
Compensated Absences which are expected to be encashed / utilised
before / after twelve months from the Balance Sheet date are considered
to be short term / long term in nature respectively.
Liability for Defined Benefit Plans is provided on the basis of
valuations, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
Actuarial losses / gains are recognised in the Statement of Profit and
Loss in the year in which they arise.
c. Termination benefits are recognised as an expense as and when
incurred.
viii. Operating Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight-line basis over the period
of the lease.
ix. Cash and Cash Equivalents
In the Cash Flow Statement, cash and cash equivalents include cash in
hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less.
x. Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company''s earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, (such as bonus shares) other than the
conversion of potential equity shares that have changed the number of
equity shares outstanding without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xi. Income Taxes
Tax expense comprises Current and Deferred tax. Current income tax and
Deferred tax are measured based on the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961.
Current tax assets and liabilities are offset when there is a legally
enforceable right to set off the recognized amounts and there is an
intention to settle the asset and the liability on a net basis.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give
rise to future economic benefits in the form of adjustment to future
income tax liability is considered as an asset, if there is convincing
evidence that the Company will pay normal tax in future. Accordingly,
MAT is recognised as an asset in the Balance Sheet when it is probable
that the future economic benefit associated with it will flow to the
Company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised. Deferred tax assets and
liabilities are measured using the tax rates that have been enacted or
substantively enacted by the Balance Sheet date.
xii. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If at the Balance Sheet date there is an
indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciated historical cost.
xiii. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value
and are determined based on best estimates of the amount required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates.
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 benefit. Where
there is a possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
xiv. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April
1, 2005 license fees are charged to revenue at the rate of 4% of gross
revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for
the concerned city, whichever is higher. Gross Revenue for this purpose
shall mean revenue on the basis of billing rates inclusive of any
taxes. Barter advertising contracts shall also be included in the gross
revenue on the basis of relevant billing rates. ROTEF means 25% of
highest valid bid in the city.
Mar 31, 2013
I. Basis of Accounting
The financial statements comply in all material aspects with all the
applicable accounting principles in India, the applicable accounting
standards notified under the Companies (Accounting Standards) Rules,
2006, (''as amended'') and the relevant provisions of the Companies Act,
1956 ("The Act"). The financial statements are prepared under the
historical cost convention on an accrual basis. The accounting policies
have been consistently applied by the Company and are consistent with
those followed in the previous year.
All assets and liabilities have been classified as current or
non-current as per the criteria set out in the Revised Schedule VI to
the Act.
ii. Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates. Any revision to such accounting estimates
is recognised prospectively in the accounting period in which such
revision takes place.
iii. Revenue Recognition
a. Revenue from radio broadcasting is recognised on an accrual basis
on the airing of client''s commercials. The revenue that is recognised
is net of service tax.
b. Revenue from short period events is recognised according to the
completed performance method. Revenue from services provided over a
longer term is recognised when the result of the transactions can be
determined with reliability and on the percentage completed basis.
c. Dividend income on mutual fund units is accounted for when the
right to receive the dividend is established by the Balance Sheet date.
d. Interest income is recognised on a time proportionate basis taking
into account the amount outstanding and the rate applicable.
e. Profit on sale of units of mutual funds is recognised at the time
of redemption and is determined as the difference between the
redemption price and the carrying value.
iv. Fixed assets and Depreciation
Cost of fixed assets comprises purchase price, duties, levies and any
directly attributable cost of bringing the asset to its working
condition and location for the intended use.
Borrowing cost directly attributable to fixed assets which take
substantial period of time to get ready for its intended use are
capitalised to the extent they relate to the period till such assets
are ready to be put to use.
Cost incurred on assets not ready for their intended use is disclosed
as Capital Work-in-Progress.
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements are amortised over the primary
period of lease of the property. Leasehold land is not amortised since
the term of lease is perpetual in nature. Tangible assets individually
costing less than Rs. 5,000 are depreciated fully in the year of
purchase.
b. Intangible assets (other than Software)
Migration fees paid by the Company for existing licenses upon migration
to Phase II of the Licensing policy and One Time Entry Fees paid by the
Company for acquiring new licenses have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from
April 1, 2005, equally over a period of ten years, being the period of
the license. One Time Entry Fees is amortised over a period of ten
years, being the period of license, from the date of operationalisation
of the respective stations.
Goodwill is amortised over a period of five years.
c. Software
i. Software obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on Enterprise Software such as SAP and Sales CRM where
the economic benefit is expected to be more than a year is recognised
as "Intangible Asset" and amortised.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
Balance Sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the Statement of
Profit and Loss.
vi. Investments
Investments that are intended to be held for not more than a year from
the date of investment are classified as Current investments. All other
investments are termed as Long term investments. The portion of Long
term investments which is expected to be realized within twelve months
from the Balance Sheet date are classified as current investments.
Investment in buildings that is not intended to be occupied
substantially for use by, or in the operations of the Company, have
been classified as investment property. The same has been classified as
long term investments. Investment property is carried at cost less
accumulated depreciation.
Current investments are carried at cost or fair value, whichever is
lower. Long term investments are stated at cost. However, provision for
diminution in value is made to recognise a decline other than temporary
in the value of the long term investments.
vii. Retirement Benefits
a. Short Term Employee Benefits :
The employees of the Company are entitled to leave encashment as per
the leave policy of the Company. The liability in respect of leave
encashment which is expected to be encashed / utilised within twelve
months after the Balance Sheet date is considered to be of short term
nature.
b. Long Term Employee Benefits :
Defined Contribution Plans :
The Company has Defined Contribution Plans for post employment benefits
such as Provident Fund and Employee''s Pension Scheme, 1995. Under the
Provident Fund Plan, the Company contributes to a Government
administered Provident Fund on behalf of its employees and has no
further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee''s Pension
Scheme, 1995 and has no further obligation beyond making its
contribution.
The Company''s contributions to the above funds are charged to revenue
every year.
Defined Benefit Plans :
The Company has a Defined Benefit Plan namely Gratuity and Leave
Encashment for all its employees. The liabilities in respect of Leave
Encashment which is expected to be encashed / utilised after twelve
months from the Balance Sheet date is considered to be long term in
nature.
Liability for Defined Benefit Plan is provided on the basis of
valuations, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
Actuarial losses / gains are recognised in the Statement of Profit and
Loss in the year in which they arise. c. Termination benefits are
recognised as an expense as and when incurred.
viii. Operating Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight-line basis over the period
of the lease.
ix. Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company''s earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the
conversion of potential equity shares, that have changed the number of
equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
x. Income Taxes
Tax expense comprises of Current and Deferred tax. Current income tax
and deferred tax are measured based on the amount expected to be paid
to the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give
rise to future economic benefits in the form of adjustment to future
income tax liability is considered as an asset, if there is convincing
evidence that the Company will pay normal tax in future. Accordingly,
MAT is recognised as an asset in the Balance Sheet when it is probable
that the future economic benefit associated with it will flow to the
Company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
xi. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If at the Balance Sheet date there is an
indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
xii. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.
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 benefit. Where
there is a possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
xiii. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April
1, 2005 license fees are charged to revenue at the rate of 4% of gross
revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for
the concerned city, whichever is higher. Gross Revenue for this purpose
shall mean revenue on the basis of billing rates inclusive of any taxes
and without deduction of any discount given to the advertiser and any
commission paid to advertising agencies. Barter advertising contracts
shall also be included in the gross revenue on the basis of relevant
billing rates. ROTEF means 25% of highest valid bid in the city.
Mar 31, 2012
I. Hinting Policies
i. Basis of Accounting
The financial statements comply in all material aspects with all the
applicable accounting principles in India, the applicable accounting
standards notified under Section 211(3C) of the Companies Act, 1956
(''The Act") and the relevant provisions of the Act. The
financial statements are prepared under the historical cost convention
on an accrual basis. The accounting policies have been consistently
applied by the Company and are consistent ' with those followed in the
previous year.
All assets and liabilities have been classified as current or
non-current as per the criteria set out in the Revised Schedule VI to
the Act.
ii. Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates. Any revise to
-such accounting estimates is recognized prospectively in the
accounting period in which such revision takes place.
iii. Revenue Recognition
a. Revenue from radio broadcasting is recognized on an accrual basis
on the airing of client's commercials. The revenue that is
recognized is net of service tax.
b. Dividend income on mutual fund units is accounted for when the
right to receive the payment is established by the balance sheet date.
c. Interest income is recognized on time proportionate basis taking
into account the amount outstanding and the rate applicable.
d. Profit on sale of units of mutual funds is recognized at the time
of redemption and is determined as the difference between 'the
redemption price and the carrying value.
iv. Fixed assets and Depreciation
Cost of fixed assets comprises purchase price, duties, levies and any
directly attributable cost of bringing the asset to its working
condition and location for the intended use.
Borrowing cost directly attributable to fixed assets which take
substantial period of time to get ready for its intended use are
capitalized to the extent they relate to the period till such assets
are ready to be put to use.
Cost of assets not ready for their intended use before such date, are
disclosed as Capital Work-in-Progress.
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements are amortized over the primary
period of lease of the property. Leasehold land is not amortized since
the term of lease is perpetual in nature. Tangible assets individually
costing less than Rs 5,000 are depreciated fully in the year of
purchase.
b. Intangible assets (other than Software) . Migration fees paid by
the Company for existing licenses upon migration to Phase II of the
Licensing policy and One Time Entry Fees paid by the Company for
acquiring new licenses have been capitalized as an asset.
The migration fee capitalized is being amortized, with effect from
April 1, 2005, equally over a period of ten years, being the period of
the license. One Time Entry Fees is amortized over a period of ten
years, being the period of license, from the date of operationalisation
of the respective stations.
c. Software
i. Software obtained initially together with hardware is capitalized
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on acquired Computer Software
(SAP) is recognized as "intangible Asset" and amortized over a period
of twenty five months. Expenditure on other software where the
economic benefit is expected to be more than a year is amortized.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realization. Monetary items denominated in foreign currency as at the
balance sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognized in the Profit and Loss
Account.
vi. Investments
Investments that are intended to be held for not more than a year from
the date of investment are classified as Current investments. All other
investments are termed as Long term investments.
Current investments are carried at cost or fair value, whichever is
lower. Long term investments are stated at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the long term investments.
vii. Retirement Benefits
a. Short Term Employee Benefits :
The employees of the Company are entitled ,to leave encashment as per
the leave policy of the Company. The liability in respect of leave
encashment which is expected to be encased / utilized within twelve
months after the balance sheet date is considered to be of short term
nature.
b. Long Term Employee Benefits :
Defined Contribution Plans:
The Company has Defined Contribution Plans for post employment benefits
such as Provident Fund and Employee's Pension Scheme, 1995. Under the
Provident Fund Plan, the Company contributes to a Government
administered Provident Fund on behalf of its employees and has no
further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee's Pension
Scheme, 1995 and has no further obligation beyond making its
contribution.
The Company's contributions to the above funds are charged to revenue
every year.
Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Leave
Encashment for all its employees. The liabilities in respect of Leave
Encashment which is expected to be encased / utilized after twelve
months from the balance sheet date is considered to be long
term in nature.
Liability for Defined Benefit Plan is provided on the basis of
valuations, as at the balance heat date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
Actuarial losses/gains are recognized in the statement of profit and
loss in the year in which they arise.
c. Termination benefits are recognized as an expense as and when
incurred.
viii. Operating Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the less or are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight-line basis over the period
of the lease.
ix. Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company's earnings per share is the
net profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the
conversion of potential equity shares, that have changed the number of
equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
x. Income Taxes
Tax expense comprises of Current and Deferred tax. Current income tax
and deferred tax are measured based on the amount expected to be paid
to the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with tax laws which give
rise to future economic benefits in the form of adjustment to future
income tax liability is considered as an asset if there is convincing
evidence that the company ' will pay normal tax in future. Accordingly,
MAT is recognized 1 as an asset in the balance sheet when it is
probable that the future economic benefit associated with it will flow
to the Company and the asset can be measured reliably.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognized only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. '
xi. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss Account. If at the balance sheet date, there is an
indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
xii. Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
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 benefit. Where
there is a possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
xiii. License Fees
"As per the Frequency Module (FM) broadcasting policy, effective April
1, 2005 license fees are charged to revenue at the rate of 4% of gross
revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for
the concerned city, whichever is higher. Gross Revenue for this purpose
shall mean revenue on the basis of billing rates inclusive of any taxes
and without deduction of any discount given to the advertiser and any
commission paid to advertising agencies. Barter advertising contracts
shall also be included in the gross revenue on the basis of relevant
billing rates. ROTEF means 25% of highest valid bid in the city.
Mar 31, 2011
I. Basis of Accounting
The financial statements comply in all material aspects with all the
applicable accounting principles in India, the applicable accounting
standards notifed under Section 211(3C) of the Companies Act, 1956
("The Act") and the relevant provisions of the Act. The financial
statements are prepared under the historical cost convention on an
accrual basis. The accounting policies have been consistently applied
by the Company.
ii. Use of Estimates
The preparation of financial statements in accordance with the generally
accepted accounting principles requires the Management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities as at the date
of financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to such accounting estimates is
recognised prospectively in the accounting period in which such
revision takes place.
iii. Revenue Recognition
Revenue from radio broadcasting is recognised on an accrual basis on
the airing of client's commercials. The revenue that is recognised is
net of service tax.
iv. Fixed assets and Depreciation
Cost of fixed assets comprises purchase price, duties, levies and any
directly attributable cost of bringing the asset to its working
condition and location for the intended use.
Borrowing cost directly attributable to fixed assets which take
substantial period of time to get ready for its intended use are
capitalised to the extent they relate to the period till such assets
are ready to be put to use.
Advances paid towards the acquisition of fixed assets that are
outstanding at each balance sheet date and cost of assets not ready for
their intended use before such date are disclosed as Capital
Work-in-Progress.
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specifed in Schedule XIV to the
Act. The cost of leasehold improvements are amortised over the primary
period of lease of the property. Leasehold land is not amortised since
the term of lease is perpetual in nature. Tangible assets individually
costing less than Rupees 5,000 are depreciated fully in the year of
purchase.
b. Intangible assets (other than Sofitware)
Migration fees paid by the Company for existing licenses upon migration
to Phase II of the Licensing policy and One Time Entry Fees paid by the
Company for acquiring new licenses have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from
April 1, 2005, equally over a period of ten years, being the period of
the license. One Time Entry Fees is amortised over a period of ten
years, being the period of license, from the date of operationalisation
of the respective stations.
c. Sofitware
i. Sofitware obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of sofitware licenses are treated
as revenue expenditure and charged in the year of purchase.
ii. Expenditure on acquired Computer Sofitware (SAP) is recognised as
"Intangible Asset" and amortised over a period of twenty five months.
Expenditure on other sofitware where the economic benefit is excepted to
be more than a year is amortised.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fuctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
balance sheet date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the Profit and Loss
Account.
vi. Investments
Investments that are intended to be held for not more than a year are
classifed as Current investments. All other investments are termed as
Long term investments.
Current investments are stated at lower of cost and fair value. Long
term investments are stated at cost. However, provision for diminution
in value is made to recognise a decline other than temporary in the
value of the long term investments.
vii. Retirement Benefits
a. Short Term Employee Benefits :
The employees of the Company are entitled to leave encashment as per
the leave policy of the Company. The liability in respect of leave
encashment which is expected to be encashed / utilised within twelve
months afiter the balance sheet date is considered to be of short term
nature.
b. Long Term Employee Benefits :
Defined Contribution Plans:
The Company has Defined Contribution plans for post employment benefits
such as Provident Fund and Employee's Pension Scheme, 1995. Under the
Provident Fund Plan, the Company contributes to a Government
administered Provident Fund on behalf of its employees and has no
further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee's Pension
Scheme, 1995 and has no further obligation beyond making its
contribution.
The Company's contributions to the above funds are charged to revenue
every year.
Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Leave
Encashment for all its employees. The liabilities in respect of Leave
Encashment which is expected to be encashed / utilised afiter twelve
months from the balance sheet date is considered to be long term in
nature.
Liability for Defined Benefit Plan is provided on the basis of
valuations, as at the balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary
for measuring the liability is the Projected Unit Credit Method.
c. Termination benefits are recognised as an expense as and when
incurred.
viii. Income Taxes
Tax expense comprises of Current and Deferred tax. Current income tax
and deferred tax are measured based on the amount expected to be paid
to the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance with tax laws which
give rise to future economic benefits in the form of adjustment to
future income tax liability is considered as an asset if there is
convincing evidence that the company will pay normal tax in future.
Accordingly, MAT is recognised as an asset in the balance sheet when it
is probable that the future economic benefit associated with it will fow
to the company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
ix. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit and Loss Account. If at the balance sheet date, there is an
indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is refected at the
recoverable amount.
x. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outfow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current best estimates.
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 outfow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outfow of
resources is remote, no provision or disclosure is made.
xi. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April
1, 2005 license fees are charged to revenue at the rate of 4% of gross
revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for
the concerned city, whichever is higher. Gross Revenue for this purpose
shall mean revenue on the basis of billing rates inclusive of any taxes
and without deduction of any discount given to the advertiser and any
commission paid to advertising agencies. Barter advertising contracts
shall also be included in the gross revenue on the basis of relevant
billing rates. ROTEF means 25% of highest valid bid in the city.
Mar 31, 2010
I. Basis of Accounting
These fnancial statements are prepared under the historical cost
convention and comply in all material aspects with all the applicable
accounting principles in India, the applicable accounting standards
notifed under section 211(3C) of the Companies Act, 1956 ("The Act")
and the relevant provisions of the Act.
ii. Use of Estimates
The preparation of fnancial statements in accordance with the generally
accepted accounting principles requires the Management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of fnancial statements and the reported
amount of expenses of the year. Actual results could differ from these
estimates. Any revision to such accounting estimates is recognised in
the accounting period in which such revision takes place.
iii. Revenue Recognition
Revenue from radio broadcasting is recognised on an accrual basis on
the airing of clients commercials net of service tax.
iv. Fixed assets and Depreciation
a. Tangible assets
Tangible fxed assets are stated at cost less accumulated depreciation.
Depreciation on tangible fxed assets is provided on written down value
method at the rates and in the manner specifed in Schedule XIV to the
Act. The cost of leasehold improvements are amortised over the primary
period of lease of the property. Leasehold land is not amortised.
Tangible assets individually costing less than Rupees 5,000 are
depreciated fully in the year of purchase.
b. Intangible assets
Migration fees paid by the Company for existing licences upon migration
to Phase II of the Licensing policy and One Time Entry Fees paid by the
Company for acquiring new licences have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from
April 1, 2005, equally over a period of ten years, being the period of
the licence. One Time Entry Fees is amortised over a period of ten
years, being the period of licence, from the date of operationalisation
of the station.
c. Software
i. Software obtained initially together with hardware is capitalised
along with the cost of hardware and depreciated in the same manner as
the hardware. All subsequent purchases of software are treated as
revenue expenditure and charged in the year of purchase.
ii. Expenditure on acquired Computer Software (SAP) are recognised as
"Intangible Asset" and amortised over a period of twenty fve months.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising
out of subsequent fuctuations are accounted for on actual payment or
realisation. Monetary items denominated in foreign currency as at the
Balance Sheet Date are converted at the exchange rates prevailing on
that day. Exchange differences are recognised in the Proft and Loss
account.
vi. Investments
Long term investments are stated at cost. Where there is a diminution
in value (other than temporary), the carrying value is reduced to
recognize the decline. Current investments are stated at lower of cost
and market value / repurchase price.
vii. Retirement Benefts
a. Short Term Employee Benefts :
The employees of the Company are entitled to leave encashment as per
the leave policy of the Company. The liability in respect of leave
encashment which is expected to be encashed / utilised within twelve
months after the balance sheet date is considered to be of short term
nature. The same is provided based on an actuarial valuation carried
out by an independent actuary as at the year end.
b. Long Term Employee Benefts :
Defined Contribution Plans :
The Company has Defned Contribution plans for post employment benefts
such as Provident Fund and Employees Pension Scheme, 1995. Under the
Provident Fund plan, the Company contributes to a Government administ
-ered Provident Fund on behalf of its employees and has no further
obligation beyond making its contribution.
The Company contributes to State Plan namely Employees Pension Scheme,
1995 and has no further obligation beyond making its contribution.
The Companys contributions to the above funds are charged to revenue
every year.
Defned Beneft Plan :
The Company has a Defned Beneft plan namely Gratuity and Leave
Encashment for all its employees. Long term Leave Encashment includes
provision for leave which is expected to be encashed / utilised after
twelve months from the Balance Sheet date.
Liability for Defned Beneft plan is provided on the basis of
valuations, as at the Balance Sheet Date, carried out by an independent
actuary. The actuarial valuation method used by independent actuary for
measuring the liability is the Projected Unit Credit Method.
c. Termination benefts are recognised as an expense as and when
incurred.
viii. Taxation Current Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred Taxation
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, 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. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
suffcient future taxable income will be available against which such
deferred tax assets can be realised.
ix. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Proft and Loss Account. If at the Balance Sheet date, there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is refected
at the recoverable amount.
x. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outfow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current best estimates.
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 outfow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outfow of
resources is remote, no provision or disclosure is made.
xi. Licence Fees
As per the new Frequency Module (FM) broadcasting policy, effective
April 1, 2005 licence fees are charged to revenue at the rate of 4% of
gross revenue for the period or 10% of Reserve One Time Entry Fee
(ROTEF) for the concerned city, whichever is higher. Gross Revenue for
this purpose shall mean revenue on the basis of billing rates inclusive
of any taxes and without deduction of any discount given to the
advertiser and any commission paid to advertising agencies. Barter
advertising contracts shall also be included in the gross revenue on
the basis of relevant billing rates. ROTEF means 25% of highest valid
bid in the city.