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Accounting Policies of Entertainment Network (India) Ltd. Company

Mar 31, 2017

i. Basis of Accounting

These financial statements are prepared in accordance with the Indian Accounting Standards (‘Ind AS’) 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 (‘Act’) (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 - ‘First time adoption of Indian Accounting Standards’. 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 (‘IGAAP’), 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 client’s 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 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 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 Company’s 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 “Intangible Asset” 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 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 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 - ‘Financial Instruments’. A financial liability (or part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

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.

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 Employee’s Pension Scheme, 1995. The Company contributes to a government administered Provident Fund, state plan namely Employee’s Pension Scheme, 1995 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 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 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 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 ‘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 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 Company’s Board of Directors.

xvii. Business combinations

Business combinations are accounted by using the acquisition method as per Ind AS 103 ‘Business Combination’. 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 (‘MIB’).


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.

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