Mar 31, 2023
(a) Terms attached to equity shares
The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per share is '' 10. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting. In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held by the shareholders.
While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115 as unsatisfied (or partially satisfied) performance obligation are parts of contracts that have an original expected duration of one year or less. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material outcome based and event based contracts.
34. DISCLOSURE AS PER IND AS 116
The Company, at the inception of a contract, assesses the contract as, or containing, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset:
¦ the Company assesses whether the contract involves the use of an identified asset,
¦ the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
¦ the Company has the right to direct the use of the asset.
The Company has lease contracts for offices premises and transmission facilities used in its operations. Leases of transmission facilities generally have a lease term of 15 years, while offices generally have lease terms ranging from 5 to 10 years.
The Company has also applied the available practical expedients wherein it:
1. Used a single discounting rate to a portfolio of leases with reasonably same characteristics.
2. Applied short term leases exemptions to leases with lease term that ends within 12 months at the date on initial application.
3. Excluded the initial direct cost from the measurement of the Right of use of asset at the date of initial application. Lease Liabilities
The Company recognises a lease liability measured at the present value of all the remaining lease payments, discounted using the Company''s incremental borrowing rate.
The Company''s non-current lease liabilities are included in Non-current financial liabilities (Refer note 19) and current lease liabilities are included in current financial liabilities (Refer note 21). The maturity analysis of lease liabilities is disclosed in note 45 - Financial Risk Management
Right of Use Asset
For new lease contracts, the Company recognises a Right of Use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee. The lease liability and the Right of Use assets is initially measured at the present value of remaining lease payments, discounted using the incremental borrowing rate at the date of recognition. Depreciation is computed using straight-line method over the lease term. The Company''s Right of Use assets were recognised and shown separately in the Balance Sheet (Refer Note 4).
Short-term leases and leases of low-value assets
The Company has elected not to recognise Right of Use assets and lease liabilities for short term leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
For the year:
a. Depreciation expense increased by '' 1,897.92 lakhs (previous year: '' 1,982.91 lakhs) on account of depreciation on Right of Use assets recognised.
b. Rent expense included in ''Operating and other expenses'', decreased by '' 2,988.64 lakhs (previous year: '' 2,917.04 lakhs) on account of operating leases recognised previously.
c. Finance costs increased by '' 1,534.27 lakhs (previous year: '' 1,608.09 lakhs) on account of interest expense on lease liabilities recognised.
d. Cash outflow from operating activities decreased by '' 2,988.64 lakhs (previous year: '' 2,917.04 lakhs) on account of decrease in operating lease payments.
e. Cash outflow from financing activities increased by '' 2,835.23 lakhs (previous year: '' 3,277.29 lakhs) on account of increase in principal and interest payments of lease liabilities.
Details of Micro, Small and Medium Enterprises
Information, as per the requirement of Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company and are relied upon by the Statutory auditors.
II) Defined Benefit Plans
Post-employment obligations
Plan is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act. Employees who are in continuous service for a period of 5 years or death while in employment are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days'' salary multiplied for the number of years of service. The liability in respect of gratuity is uncapped and is not restricted to '' 20 lakhs.
These plans typically expose the Company to actuarial risks such as interest risk and salary inflation risk.
a) Interest risk - A decrease in the discount rate will increase the plan liability.
b) Salary inflation risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
42. PENDING LITIGATIONS, CLAIMS AND CONTINGENT LIABILITY:
a. Pending litigations and claims
The Company is involved in various litigations, the outcome of which are considered probable and in respect of which the Company has aggregate provisions of '' 2,058.08 lakhs as at March 31, 2023 (March 31, 2022 - '' 1,970.04 lakhs).
b. Contingent liability - taxation
The Company is contesting certain disallowances to the taxable income and demands raised by the Income tax authorities, the estimated tax liability of which is '' 19.00 lakhs as at March 31, 2023 (March 31, 2022 - '' 19.00 lakhs). The management does not expect the liability from these claims to crystallize and accordingly, no provision has been recognised in the financial statements for the same.
c. Other Litigation
Subsequent to the year ended March 31, 2023, in the matter of the Company vs Phonographic Performance Limited (''PPL''), the Hon''ble Madras High Court partly allowed the appeal of PPL. The management is in the process of filing a special leave petition before the Hon''ble Supreme Court of India for an immediate stay of the said order. The management, based on legal advice, believes that the chances of a cash outflow on account of the aforesaid matter is remote.
43. CAPITAL MANAGEMENT
For the purpose of the Company''s capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The Company''s objective is to maintain a strong capital base to ensure a sustainable future growth, maintain a strong credit rating, and to provide adequate returns to the shareholders. The funding requirements of the Company are not large and are generally met through internal accruals.
The net debt of the Company as at March 31, 2023 is Nil (March 31, 2022 - Nil).
Refer Note 48 for information on ratios.
44. FAIR VALUE
The fair values of financial assets and liabilities are included at the amount at which the instrument can be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
a. Fair value of cash and cash equivalents, other bank balances, trade and other current financial assets, trade and other payables approximate their carrying amounts due to the short maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
b. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities - Investment in Mutual funds
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The Company''s principal financial liabilities comprise lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance and support the Company''s operations. The Company''s principal financial assets include security deposits, investment in mutual funds, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company''s senior management oversees the management of these risks through appropriate policies and procedures in accordance with Company''s policies and risk objectives. The Company''s activities expose it to a variety of credit risks, market risks and liquidity risks. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk in the financial statements.
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including investments in debt mutual funds, investment in Corporate fixed deposits, balances with banks and foreign exchange transactions.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. The Company undertakes a detailed review of the credit worthiness of clients before extending credit. Outstanding customer receivables are regularly monitored.
Trade receivables consists of a large number of customers. The Company has a credit evaluation policy for each customer and based on the evaluation, credit limit of each customer is defined.
Total Trade receivables (net of provisions) as on March 31, 2023, is '' 12,978.56 lakhs (March 31, 2022: '' 12,679.44 lakhs). The Company believes the concentration of risk with respect to trade receivables is low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
The Company uses the expected credit loss model as per Ind AS 109 - ''Financial Instruments'' to assess the impairment loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix considers available external and internal credit risk factors and the Company''s historical experience in respect of customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12.
Investments in debt mutual funds, Corporate fixed deposit, and balances with banks
Credit risk from balances with banks and investments in debt mutual funds is managed by the Company''s treasury department in accordance with the Company''s policy. The Company believes the concentration of risk with respect to Investment in debt mutual funds, balances with banks and investment in Corporate fixed deposits is low, as the investments of surplus funds are made only with approved counterparties.
b. Liquidity Risk
Liquidity risk is defined as a risk that the Company will not be able to settle or meet its obligations on time. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. Management monitors the Company''s net liquidity position through rolling forecasts based on expected cash flows. In addition, processes and policies related to such risks are overseen by the Senior Management.
The Company''s principal sources of liquidity are cash and cash equivalents, Investments in mutual funds and the cash flow generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
At the end of the reporting period, the Company held Mutual fund investments of '' 17,180.42 lakhs (March 31,2022 '' 17,558.36 lakhs) that are expected to readily generate cash inflows for managing liquidity risk.
c. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk viz. Currency risk, Interest rate risk and other Price risk such as equity Price risk and commodity risk.
The Financial instruments affected by market risk include investments in mutual fund. The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations, provisions.
Foreign Currency risk
Foreign currency risk arises due to the fluctuations in foreign currency exchange rates. The Company does not have any material transactions in foreign currencies.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any financial instruments other than investment in mutual funds that are subject to fluctuation on account of change in market interest rates.
46. Exceptional items consist of the following:
a. Impairment of investment in EN Inc amounting to '' 1,011.02 lakhs.
EN Inc, a wholly owned subsidiary of the Company, operated FM radio broadcasting and media solutions business through EN LLC (step down subsidiary of the Company) in certain areas of The United States of America, namely, New Jersey, San Francisco and Dallas.
During the year ended March 31, 2023, Considering the business environment and other relevant economic and market indicators, the Company identified indicators of impairment related to the operations in San Francisco. The Company''s evaluation involved comparing the carrying value of its investment with the recoverable amount which was determined basis the cash flows expected to be generated by the operations in New Jersey and Dallas.
The future cash flows considered key assumptions such as volume growth, margins, etc. with due consideration for potential risks given the current economic environment. The discount rates used were pre tax rates based on Weighted average cost of capital and reflects markets assessment of the risk specific to the asset as well as time value of money. The recoverable amount estimates were based on judgements, estimates, assumptions and market data as on the reporting date and ignore subsequent changes in the economic and market conditions.
The future cash flows were discounted using the post-tax nominal discount rate of 15.15% derived from the post-tax weighted average cost of capital. Accordingly, the Company determined the recoverable amounts for its investment to be '' 829.62 lakhs and recorded a provision for impairment of '' 1,011.03 lakhs for the year ended March 31, 2023.
b. Impairment of investment in Mirchi Bahrain W.L.L amounting to '' 504.33 lakhs.
The Company through its wholly owned subsidiary, Mirchi Bahrain W.L.L launched radio broadcasting operations in the Kingdom of Bahrain on May 21, 2021. However, considering the adverse impact of COVID 19 since the launch of
operations and huge quantum of license fees payables to the Ministry of Information Affairs (MOIA), the operations of the Company had become unsustainable in the current year ended March 31, 2023.
Considering the above, the Company served a notice of termination to the Ministry of Information Affairs (MOIA), Government of Bahrain expressing its inability to continue services in the region due to continued losses and high license fees. This resulted in an impairment trigger for the investment of the Company in the subsidiary.
The accumulated losses of Mirchi Bahrain W.L.L were compared with the investment value and accordingly, the Company made a provision of impairment amounting to '' 504.33 lakhs for the year ended March 31, 2023.
c. Provision for onerous contract amounting to '' 263.13 lakhs
As a part of the above, the Company had made a provision of '' 263.13 lakhs for onerous contracts.
47. On October 31, 2022, the Company entered into a Share Subscription and Shareholders Agreement (SSHA) with Spardha Learnings Private Limited. As a part of the SSHA, the Company has subscribed to the below:
a. 9,238 Pre-Series A2 CCPS of face value of '' 10 and 5 equity shares of face value of '' 10, for a total consideration of '' 500.32 lakhs on November 11, 2022 as tranche 1.
b. 3,694 Pre-Series A2 CCPS of face value of '' 10 for a total consideration of ''199.96 lakhs on January 30, 2023 as tranche 2.
The total investment constitutes 11.50% of the share capital of Spardha Learnings Private Limited on a fully diluted basis. The Company has classified the above investments as non-current investment in its financial information.
e. The improvement in net profit ratio is on account of reduction in loss in current year.
f. Improvement in return on capital employed is on account of reduction in loss in current year as compared to the previous year.
g. Return on investment is higher on account of higher yield from investments during the current year as compared to the previous year.
49. During the year ended March 31, 2023 and previous year ended March 31, 2022, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
50. DISCLOSURE OF TRANSACTIONS WITH STRUCK OFF COMPANIES.
The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year ended March 31, 2023 and previous year ended March 31, 2022
51. The Company did not have any transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto currency or virtual currency
(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
i. Willful defaulter
ii. Utilisation of borrowed funds & share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in Utilisation of borrowings
52. DISCLOSURE IN RELATION TO UNDISCLOSED INCOME
During the year ended March 31, 2023 and previous year ended March 31, 2022, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transaction which are not recorded in the books of accounts.
53. The previous year figures have been reclassified/ regrouped to conform to this year''s classification.
Mar 31, 2018
1. Corporate Information
Entertainment Network (India) Limited (the âCompanyâ) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (âBSEâ) and the National Stock Exchange (âNSEâ). The Company was incorporated on June 24, 1999 and has its registered office at Mumbai, Maharashtra, India. The Company operates FM radio broadcasting stations in 41 Indian cities under the brand names âRadio Mirchiâ , âMirchi Loveâ, âMirchi 95â and âKool FMâ.
The Companyâs principal revenue stream is advertising. Advertising revenues are generated through the sale of air time in the Companyâs FM radio broadcasting stations, activations, concerts and monetization of Companyâs digital and other media properties.
These financial statements were approved for issue by the Companyâs Board of Directors on May 23, 2018.
2A. Critical estimates and / or judgements
The preparation of financial statements requires the use of accounting estimates, which will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies. This note provides an overview of the areas that involved more judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
a. Current tax expense and payable- Refer Note 32 and Note 43 (b)
b. Useful life of intangible asset- Refer Note 7
c. Defined benefit obligation- Refer Note 37
d. Impairment of trade receivables- Refer Note 12
e. Recognition of deferred tax assets- Refer Note 20 and Note 32
Estimates and judgements are continuously evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company. The estimates and judgments made by the management are believed to be reasonable under the prevailing circumstances.
3. DISCLOSURES FOR OPERATING LEASES
Disclosure in respect of lease arrangements entered by the Company are as follows:-
a. The Company has entered into agreements for transmission towers, office and residential premises taken on lease.
b. Lease payments recognised in the statement of profit and loss Rs.3,006.93 lakhs (March 31, 2017 - Rs.2,660.95 lakhs).
c. Of the total leases, nineteen lease licenses have a lock in period ranging from two years to five years. All the other agreements are cancellable at the option of the Company.
Future minimum rentals payable under non-cancellable operating leases are as follows:
4. TRADE PAYABLES
Details of Micro, Small & Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Company owes dues. This information, as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.
5. The Company has classified the various employee benefits provided to employees as under:
I) Defined Contribution Plans
a) Provident Fund
b) Employeeâs Pension Scheme
c) Employee State Insurance Scheme
d) National Pension Scheme
During the year, the Company has recognised the following amounts in the statement of profit and loss: -
II) Defined Benefit Plans
Post-employment obligations
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 daysâ salary multiplied for the number of years of service. The liability in respect of gratuity is uncapped and is not restricted to Rs.20 lakhs.
These plans typically expose the Company to actuarial risks such as interest risk and salary inflation risk.
a) Interest risk - A decrease in the discount rate will increase the plan liability.
b) Salary inflation risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
In accordance with Ind AS 19, actuarial valuation was done in respect of the aforesaid Defined Benefit Plan of gratuity (unfunded) based on the following assumptions: -
F) Sensitivity Analysis
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity of the defined benefit obligation to changes in the principal assumptions:
H) Other details
Weighted Average Duration of the Projected Benefit Obligation as on March 31, 2018 is 8 years (March 31, 2017 - 8 years).
6. SEGMENT INFORMATION
In accordance with Ind AS-108, âOperating Segmentsâ, the Companyâs business segment is Media and Entertainment and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liabilities, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as at and for the year ended March 31, 2018. The Company primarily caters to the domestic market and hence there are no reportable geographical segments.
7. RELATED PARTY DISCLOSURES
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) -Holding Company
ii. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) - Subsidiary Company*
iii. Fellow Subsidiary Companies
Mirchi Movies Limited (MML)#*
Times Innovative Media Limited (TIM)
TIM Delhi Airport Advertising Private Limited (TIMDA)
Times Global Broadcasting Company Limited (TGBCL)*
Times Internet Limited (TIL) #
Zoom Entertainment Network Limited (ZENL)
Gamma Gaana Limited (GGL)
Metropolitan Media Company Limited (formerly Times VPL Limited) (MMCL)
Vardhaman Publishers Limited (VPL)
Junglee Pictures Limited (JPL)*
Magic Bricks Reality Services Limited (MBRSL)
Brand Equity Treaties Limited (BETL)
Worldwide Media Private Limited (WWM)
Akuate Internet Services Private Limited (AISPL)*
iv. Related Parties of Ultimate Holding Company
Bennett Property Holdings Company Limited (BPHCL)
Aegon Life Insurance Company Limited (ALIC)
v. Key Management Personnel
Managing Director & Chief Executive Officer
Mr. Prashant Panday Non-Executive Directors
Mr. Vineet Jain Mr. N.Kumar Mr. Richard Saldanha Mr. Ravindra Kulkarni
Ms. Punita Lal- from March 28, 2016 to November 15, 2017 Mr. B. S. Nagesh- upto November 8, 2016
# Mirchi Movies Limited (MML) has been merged into Times Internet Limited (TIL) in the current year.
* There are no transactions during the year.
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions.
There have been no guarantees provided or received for any related party receivables and payables for the year ended March 31, 2018 and for the year ended March 31, 2017.
8. EARNINGS PER SHARE (BASIC AND DILUTED)
The number of shares used in computing basic Earnings Per Share (EPS) is the weighted average number of shares outstanding during the year.
9. Gross amount required to be spent by the Company during the year for Corporate Social Responsibility (CSR) activities was Rs.211.00 lakhs (March 31, 2017 - Rs.233.05 lakhs). Amount spent during the year by the Company is as follows:
10. On March 16, 2018, Company has entered into a non-binding agreement with TV Today Network (TVTN) to acquire the three stations viz. Mumbai, Delhi and Kolkata stations on a slump sale basis. The Company is in the process of obtaining necessary regulatory approvals.
11. PENDING LITIGATIONS AND CLAIMS:
a. The Company is involved in various litigations, the outcome of which are considered probable and in respect of which the Company has aggregate provisions of Rs.2,123.70 lakhs as at March 31, 2018 (March 31, 2017 - Rs.1,612.47 lakhs).
b. Contingent liability-taxation
The Company is contesting certain disallowances to the taxable income and demands raised by the Income tax authorities, the estimated tax liability of which is Rs.13.97 lakhs as at March 31, 2018 (March 31, 2017 - Rs.128.35 lakhs). The management does not expect the liability from these claims to crystallize and accordingly, no provision has been recognised in the financial statements for the same.
12. CAPITAL MANAGEMENT
For the purpose of the Companyâs capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The Companyâs objective is to maintain a strong capital base to ensure a sustainable future growth, maintain a strong credit rating and provide adequate returns to the shareholders. The Funding requirements of the Company are not large and are generally met through internal accruals and short term borrowings. The Company monitors capital using a capital gearing ratio. Capital gearing ratio is computed as net debt divided by shareholdersâ funds.
The net debt of the Company as on March 31, 2018 was Nil (previous year - Nil).
13. FAIR VALUE
The fair values of financial assets and liabilities are included at the amount at which the instrument can be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
a. Fair value of cash and cash equivalents, other bank balances, trade and other current financial assets, trade and other payables and short term borrowings approximate their carrying amounts due to the short maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
b. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities - Investment in Mutual funds
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
14. Financial risk management
The Companyâs principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support the Companyâs operations. The Companyâs principal financial assets include security deposits, investment in mutual funds, trade and other receivables and cash and cash equivalents that derive directly from its operations.
The Companyâs senior management oversees the management of these risks. The Companyâs activities expose it to a variety of credit risks, market risks and liquidity risks. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk in the financial statements.
a. Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including investments in debt mutual funds, deposits with banks and foreign exchange transactions.
Trade Receivables
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. The Company undertakes a detailed review of the credit worthiness of clients before extending credit. Outstanding customer receivables are regularly monitored. Management monitors the Companyâs net liquidity position through rolling forecasts based on expected cash flows.
Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation, credit limit of each customer is defined. Total Trade receivables as on March 31, 2018 is Rs.17,019.90 lakhs (March 31, 2017 - Rs.16,215.44 lakhs).The Company believes the concentration of risk with respect to trade receivables is low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
The Company uses the expected credit loss model as per Ind AS 109 - âFinancial Instrumentsâ to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix considers available external and internal credit risk factors and the Companyâs historical experience in respect of customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12.
Investments in debt mutual funds and balances with banks
Credit risk from balances with banks and investments in debt mutual funds is managed by the Companyâs treasury department in accordance with the Companyâs policy. The Company believes the concentration of risk with respect to Investment in debt mutual funds and balances with banks is low, as the investments of surplus funds are made only with approved counterparties.
b. Liquidity Risk
Liquidity risk is defined as a risk that the Company will not be able to settle or meet its obligations on time. The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the Senior Management.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has short term borrowings in the form of Commercial Papers. The Company believes that the same can be paid out of from internal accruals and mutual fund investments. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
At the end of the reporting period the Company held Mutual fund investments of Rs.15,528.98 lakhs (March 31, 2017 Rs.10,754.44 lakhs) that are expected to readily generate cash inflows for managing liquidity risk.
Maturities of financial liabilities
The tables below analyze the Companyâs Financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
c. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk currency risk, interest rate risk and other price risk such as equity price risk and commodity risk.
Financial instruments affected by market risk include loans and borrowings. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations, provisions. The analysis for the contingent consideration liability is provided in Note 43.
Foreign Currency risk
Foreign currency risk arises due to the fluctuations in foreign currency exchange rates. The Company does not have any material transactions in foreign currencies. Accordingly, its exposure to the foreign currency risk is limited.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Price risk
The Companyâs exposure to mutual fund securities arises from investments held by the Company and classified in the balance sheet at fair value through profit or loss. To manage its price risk arising from investments in Mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the framework and policies set by the Board of Directors.
15. Standards Issued but not effective IND AS 115 : Revenue from Contracts with customer
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The new standard defines a five-step model to recognise revenue from customer contracts namely:-
a) Identify the contract(s) with a customer.
b) Identify the performance obligations in the contract.
c) Determine the transaction price.
d) Allocate the transaction price to the performance obligations in the contract.
e) Recognise revenue when (or as) the entity satisfies a performance.
The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The Company has undertaken a review of the major commercial arrangements and has concluded that the effect on adoption of Ind AS 115 is expected to be insignificant on the Companyâs financial position or performance.
16. Exceptional items consists of write back of provisions for expenses recorded in earlier years and no longer required. The write back amounted to Rs.423.76 lakhs for the year ended March 31, 2018.
17. The previous year figures have been reclassified to conform to this yearâs classification.
Signatures to notes â1â to â49â forming part of the financial statements.
Mar 31, 2017
Corporate Information
Entertainment Network (India) Limited (the âCompanyâ) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (âBSEâ) and the National Stock Exchange (âNSEâ). The Company was incorporated on June 24, 1999 and has registered office at Mumbai, Maharashtra, India. The Company operates FM radio broadcasting stations in 40 Indian cities under the brand names âRadio Mirchiâ and âMirchi Loveâ.
The Companyâs principal revenue stream is advertising. Advertising revenues are generated through the sale of air time in the Companyâs FM radio broadcasting stations, activations and monetization of Companyâs digital and other media properties.
These financial statements were approved for issue by the Companyâs Board of Directors on May 23, 2017.
1A. Recent accounting pronouncements
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 - âStatement of cash flowsâ and Ind AS 102- âShare-based payment.â These amendments are in accordance with the recent amendments made by the International Accounting Standards Board (IASB) to IAS 7- âStatement of cash flowsâ and IFRS 2- âShare-based payment,â respectively. The amendments are effective from April 1, 2017.
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. This may require inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and its effect on the financial statements.
Presently, Company does not have any share based payments. Consequently, the amendments to Ind AS 102 are currently not relevant to the Company.
1B. Critical estimates and / or judgements
The preparation of financial statements requires the use of accounting estimates, which will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies. This note provides an overview of the areas that involved more judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
a. Current tax expense and payable - Refer Note 33 and Note 45 (b)
b. Goodwill impairment- Refer Note 5
c. Useful life of intangible asset - Refer Note 6
d. Defined benefit obligation - Refer Note 37
e. Impairment of trade receivables - Refer Note 12
f. Recognition of deferred tax assets - Refer Note 21 and 33
Estimates and judgements are continuously evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company. The estimates and judgments made by the management are believed to be reasonable under the prevailing circumstances.
2. COMMITMENTS TO THE EXTENT NOT PROVIDED FOR
Estimated amount of capital expenditure contracted for at the end of the reporting period but not recognised as liabilities are as follows:
3. TRADE PAYABLES
There are no Micro, Small and Medium Enterprises, to whom the Company owes dues. This information, as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.
4. The Company has classified the various employee benefits provided to employees as under :
I) Defined Contribution Plans
a) Provident Fund
b) Employeeâs Pension Scheme
c) Employee State Insurance Scheme
d) National Pension Scheme
II) Defined Benefit Plans
Post-employment obligations
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 daysâ salary multiplied for the number of years of service. The liability in respect of gratuity is uncapped and is not restricted to Rs.10 lakhs.
In accordance with Ind AS 19, actuarial valuation was done in respect of the aforesaid Defined Benefit Plan of gratuity (unfunded) based on the following assumptions :-
A) Sensitivity Analysis
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
5. Segment Information
In accordance with Ind AS-108 âOperating Segmentsâ, the Companyâs business segment is Media and Entertainment and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liabilities, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as at and for the year ended March 31, 2017. The Company primarily caters to the domestic market and hence there are no reportable geographical segments.
6. Related Party Disclosures as required under Ind AS 24 - âRelated Party Disclosuresâ are given below:
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) - Holding Company (Refer Note 43)
Times Infotainment Media Limited (TIML) - the erstwhile Holding Company* (Refer Note 43)
ii. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) - Subsidiary Company*
iii. Fellow Subsidiary Companies
Mirchi Movies Limited (MML)
Times Innovative Media Limited (TIM)
TIM Delhi Airport Advertising Private Limited (TIMDA)
Times Global Broadcasting Company Limited (TGBCL)*
Times Internet Limited (TIL) #
Zoom Entertainment Network Limited (ZENL)*
Gamma Gaana Limited (GGL)
Metropolitan Media Company Limited (formerly Times VPL Limited) (MMCL)
Vardhaman Publishers Limited (VPL)
Junglee Pictures Limited (JPL)
Magic Bricks Reality Services Limited (MBRSL)
Brand Equity Treaties Limited (BETL)
Worldwide Media Private Limited (WWM)
Akuate Internet Services Private Limited (AISPL)
Times Centre for Learning Limited (TCLL)*
Times Business Solutions Limited (TBSL) #
Times Websol Limited (TWL) #*
Times Mobile Limited (TM)#
iv. Related Parties of Ultimate Holding Company
Bennett Property Holdings Company Limited (BPHCL)
Aegon Life Insurance Company Limited (ALIC)
v. Key Management Personnel
Managing Director & Chief Executive Officer
Mr. Prashant Panday
Non-Executive Directors
Mr. Vineet Jain
Mr. N. Kumar
Mr. Richard Saldanha
Mr. Ravindra Kulkarni
Ms. Punita Lal - from March 28, 2016
Mr. B. S. Nagesh - upto November 8, 2016
# Times Business Solutions Limited (TBSL), Times Websol Limited (TWL) and Times Mobile Limited (TM) have been merged into Times Internet Limited (TIL) in the previous year.
* There are no transactions during the year.
7. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, transmission towers, office and residential premises taken on lease:
a. Lease payments recognised in the statement of profit and loss Rs.2,660.95 lakhs (Previous Year: Rs.1,930.28 lakhs).
b. Of the total leases, twelve lease licenses have a lock in period ranging from two years to five years. All the other agreements are cancellable at the option of the Company.
Future minimum rentals payable under non-cancellable operating leases are as follows:
8. Earnings Per Share (Basic and Diluted)
The number of shares used in computing Basic Earnings Per Share (EPS) is the weighted average number of shares outstanding during the year.
9. Gross amount required to be spent by the Company during the year for Corporate Social Responsibility (CSR) activities was Rs.233.05 lakhs (Previous year: Rs.200.73 lakhs). Amount spent during the year by the Company is as follows:
10. The Scheme of Amalgamation and Arrangement (âSchemeâ) of TIML (the erstwhile holding company of the Company) with BCCL (the holding Company of TIML) was filed under the Companies Act, 1956 was approved by Honâble Bombay High Court on July 3, 2015 and by the MIB on April 25, 2016. Consequently, TIMLâs entire shareholding in the Company was transferred to BCCL, and BCCL is the sole promoter shareholder of the Company. The appointed date of the Scheme was April 1, 2013.
11. In February 2015, the Company had entered into a non-binding memorandum of understanding with TV Today Network Limited (âTVTNâ) for purchase of seven radio stations from TVTN. On July 22, 2015 the Company received the approval from the Ministry of Information and Broadcasting (âMIBâ), Government of India to purchase TVTNâs four radio stations in Amritsar, Jodhpur, Patiala and Shimla. As regards the remaining three stations viz. Mumbai, Delhi and Kolkata, the MIB declined to grant its approval. The Company and TVTN have appealed against the MIB decision before the Honâble Delhi High Court. The next court hearing in respect of the appeal is scheduled for May 25, 2017. All the fixed assets acquired from TVTN were stated at fair value as on the date of acquisition.
12. Pending litigations and claims:
a. The Company is involved in various litigations the outcome of which are considered probable and in respect of which the Company has aggregate provisions of Rs.1,612.47 lakhs (Previous year Rs.1,031.38 lakhs) as at March 31, 2017.
b. Contingent liability-taxation
The Company is contesting certain disallowances to the taxable income and demands raised by the Income-tax authorities, the estimated tax liability of which is Rs.128.35 lakhs (Previous year : Rs.118.73 lakhs). The management does not expect the liability from these claims to crystallize and accordingly, no provision has been recognized in the financial statements for the same.
13. Capital Management
The Companyâs objective is to maintain a strong capital base to ensure a sustainable future growth, maintain a strong credit rating and provide adequate returns to the shareholders. The Funding requirements of the Company are not large and are generally met through internal accruals and short term borrowings. The Company monitors capital using a capital gearing ratio. Capital gearing ratio is computed as net debt divided by the aggregate of shareholdersâ funds and net debt.
The net debt of the Company was Nil as on March 31, 2017 and April 1, 2015. The net debt as on March 31, 2016 was Rs.292.40 lakhs.
14. Financial risk management
The Companyâs activities expose it to a variety of market risks, liquidity risks and credit risks. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk in the financial statements.
a. Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including investments in debt mutual funds and deposits with banks.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. The Company undertakes a detailed review of the credit worthiness of clients before extending credit. Outstanding customer receivables are regularly monitored. The Company believes the concentration of risk with respect to trade receivables as low, as its customers are in several jurisdictions and industries and operate in largely independent markets. Management monitors the Companyâs net liquidity position through rolling forecasts based on expected cash flows.
The Company uses the expected credit loss model as per IND AS 109 - âFinancial Instrumentsâ to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix considers available external and internal credit risk factors and the Companyâs historical experience in respect of customers.
b. Liquidity Risk
Liquidity risk is defined as a risk that the Company will not be able to settle or meet its obligations on time. The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the Senior Management.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has short term borrowings in the form of commercial papers. The Company believes that the same can be paid out of from internal accruals and mutual fund investments. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
At the end of the reporting period the Company held Mutual fund investments of Rs.10,754.44 lakhs (March 31, 2016 : Rs.22,738.24 lakhs April 1, 2015 : Rs.57,278.05 lakhs) that are expected to readily generate cash inflows for managing liquidity risk.
Maturities of financial liabilities
The tables below analyze the Companyâs Financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
c. Foreign Currency risk
Foreign currency risk arises due to the fluctuations in foreign currency exchange rates. The Company does not have any material transactions in foreign currencies. Accordingly, its exposure to the foreign currency risk is limited.
d. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
e. Price risk
The Companyâs exposure to mutual fund securities arises from investments held by the Company and classified in the balance sheet at fair value through profit or loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the framework and policies set by the Board of Directors.
15. The fair values of financial assets and liabilities are included at the amount at which the instrument can be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair vales:
a. Fair value of cash and cash equivalents, trade and other current financial assets, trade & other payables and short term borrowings approximate their carrying amounts due to the short maturities of these instruments.
b. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
16. First-time adoption of Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS. Beginning April 1, 2016, the Company has adopted applicable Ind AS standards and the adoptions were carried out in accordance with Ind AS 101- First time adoption of Indian Accounting Standards. The âTransition Dateâ is April 1, 2015. The transition was carried out from Accounting Standards as prescribed under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the previous GAAP The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended March 31, 2017 and the comparative information.
This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements, including the balance sheet as at April 1, 2015 and the financial statements as at and for the year ended March 31, 2016.
Exemptions and exceptions availed
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
1. Ind AS optional exemptions
a. Business combinations
The Company elected to apply Ind AS 103 prospectively to business combinations that occured on or after the Transition Date.
b. Deemed cost
The Company elected to continue with the carrying value measured as per the Previous GAAP for all its Property, Plant and Equipment, Intangible Assets and Investment Properties. The carrying value was used as deemed cost as at the Transition Date.
c. Investment in Subsidiary
The Company elected to measure its investment in Subsidiary, at the carrying value as per the Previous GAAP and used it as deemed cost as at the Transition Date.
2. Ind AS mandatory exceptions
i. Estimates
The estimates as at the Transition Date and as at March 31,2016 are consistent with the estimates as at the same date made in conformity with the Previous GAAP Additionally the Company made estimates for impairment of financial assets by applying expected credit loss model as at the Transition Date and as at March 31, 2016.
ii. Classification and measurement of financial assets
The Company designated all its investments in debt mutual funds at fair value through profit and loss as at the Transition Date.
Reconciliations between Previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.
Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2016
There is no material impact on statement of cash flows due to transition from Previous GAAP to Ind AS.
Notes to first-time adoption:
Note I : Investment property
Under the Previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS, investment properties are disclosed on the face of the balance sheet. There is no impact on the total equity or statement of profit and loss.
Note II : Amortisation of goodwill
Under the Previous GAAP, the Company amortised goodwill over a period of 5 years. Under Ind AS, Goodwill is not amortised but tested for impairment as per IND AS 38 - âIntangible Assetsâ. Thus, total comprehensive income for the year ended March 31, 2016 and goodwill as at March 31, 2016 increased by Rs.20.67 lakhs.
Note III : Fair valuation of investments
In accordance with Ind AS, the Companyâs investments in debt mutual funds have been fair valued. The Company has designated these investments at fair value through profit and loss. Under the Previous GAAP, the application of relevant accounting standard resulted in these investments being carried at cost.
Consequent to the above, total comprehensive income for the year ended March 31, 2016 increased by Rs.735.32 lakhs. Further the total equity as at March 31, 2016 increased by Rs.3,303.14 lakhs, out of which the increase as on April 1, 2015 i.e. the Transition Date was Rs.2,567.82 lakhs.
Note IV : Trade receivables
As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the Provision for doubtful debts. As a result, the allowance for doubtful debts increased by Rs.57.86 lakhs as at March 31, 2016 (April 1, 2015 Rs.157.55 lakhs). Consequently, the total comprehensive income for the year ended March 31, 2016 reduced by 37.84 lakhs.
Note V : Borrowings
Under the Previous GAAP, transaction costs incurred in connection with borrowings used for capital expenditure were capitalised and depreciated over useful life of respective assets. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. Accordingly, transaction costs on borrowings as at March 31, 2016 have been reduced by Rs.13.06 lakhs (April 1, 2015 Rs.Nil) with a corresponding adjustment in Capital work in progress of Rs.12.52 lakhs (April 1, 2015 Rs.Nil) and balance to retained earnings.
Note VI : Proposed dividend
Under the Previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and tax on it aggregating Rs.573.75 lakhs as at March 31, 2016 (April 1, 2015 Rs.573.75 lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
Note VII : Actuarial gains and Losses
Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. However, this has no impact on the total comprehensive income and total equity as on April 1, 2015 or as on March 31, 2016.
Note VIII : Security deposits
Under the Previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued certain security deposits by discounting them over the lock in period under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits reduced by Rs.25.23 lakhs as at March 31, 2016 (April 1, 2015 Rs.Nil) and the prepaid rent increased by Rs.25.23 lakhs as at March 31, 2016 (April 1, 2015 - Rs.Nil).
Note IX : Deferred tax
Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on certain temporary differences which was not required under Previous GAAP.
In addition, the various transitional adjustments lead to temporary differences. Under the Ind AS, the Company has to account for such differences. Deferred tax adjustments are recognised in relation to the underlying transactions either in retained earnings or as a separate component of equity. During the year ended March 31, 2016, the net deferred tax liabilities on account of Ind AS adjustments was Rs.53.23 lakhs. As on the Transition Date, the net impact on deferred tax assets due to Ind AS adjustments was Rs.515.52 lakhs.
Note X : Other Comprehensive Income
Under Previous GAAP, the Company has not presented other comprehensive income âOCIâ separately. Hence, it has reconciled Previous GAAP profit or loss to profit or loss as per Ind AS. Further, Previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.
17. The previous year figures have been reclassified to conform to this yearâs classification.
Signatures to notes â1â to â50â forming part of the financial statements.
Mar 31, 2016
1. Commitments to the extent not provided for
Estimated amount of contracts remaining to be executed on capital
account Rs. 31,031,283 (Previous Year : Rs. 12,050,861) net of advances
of Rs. 93,179,757 (Previous Year : Rs. 65,477).
2. Trade payables
There are no Micro, Small and Medium Enterprises, to whom the Company
owes dues. This information, as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006, has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
3. The Company has classified the various employee benefits provided
to employees as under:
I) Defined Contribution Plans
a) Provident Fund
b) National Pension Scheme
c) State Defined Contribution Plans - Employers'' Contribution to
Employee''s Pension Scheme, 1995.
4. Segment Information
In accordance with Accounting Standard-17, ''Segment Reporting'', the
Company''s business segment is Media and Entertainment and it has no
other primary reportable segments. Accordingly, the segment revenue,
segment results, total carrying amount of segment assets and segment
liabilities, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as reflected in
the Financial Statements as at and for the year ended March 31, 2016.
The Company primarily caters to the domestic market and hence there are
no reportable geographical segments.
5. Related Party Disclosures as required under Accounting Standard
18- ''Related Party Disclosures'' are given below:
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) - Ultimate Holding Company
(Refer Note 35) Times Infotainment Media Limited (TIML) - Holding
Company* (Refer Note 35)
ii. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) - Subsidiary Company*
iii. Fellow Subsidiary Companies
Times Innovative Media Limited (TIM)
TIM Delhi Airport Advertising Private Limited (TIMDA)
Times Internet Limited (TIL) #
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL) #
Metropolitan Media Company Limited (formerly Times VPL Limited) (MMCL)
Vardhaman Publishers Limited (VPL)
Times Websol Limited (TWL) #
Times Mobile Limited (TM) #
Magic Bricks Realty Services Limited (MBRSL)*
Worldwide Media Private Limited (WWM)
Zoom Entertainment Network Limited (ZENL)
Gamma Gaana Limited (GGL)
Junglee Pictures Limited (JPL)
Akuate Internet Services Private Limited (AISPL)
Times Centre for Learning Limited (TCLL)
iv. Related Parties of Ultimate Holding Company
Bennett Property Holdings Company Limited (BPHCL)
v. Key Management Personnel
Managing Director & Chief Executive Officer
Mr. Prashant Panday
# Times Business Solutions Limited (TBSL), Times Websol Limited (TWL)
and Times Mobile Limited (TM) have been merged into Times Internet
Limited (TIL).
* There are no transactions during the year.
31. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, transmission
towers, office and residential premises taken on lease:
a) Lease payments recognised in the Statement of Profit and Loss Rs.
193,027,615 (Previous Year :Rs. 175,229,203).
b) Two lease licenses have a lock in period of three years from the
commencement of respective lease period. All the other agreements are
cancellable at the option of the Company.
6. In the previous year ended March 31, 2015, the Company had revised
depreciation rates on fixed assets w.e.f. April 1, 2014 as per the
useful life specified in Schedule II of the Companies Act, 2013 (the
Act'') or as re- assessed by the Company. As prescribed in the said
Schedule II of the Act, an amount of Rs. 58,324,116 (net of deferred
tax of Rs. 30,032,369) was charged to the opening balance of retained
earnings in that year for the assets in respect of which there was no
remaining useful life as on April 1, 2014.
7. Gross amount required to be spent by the Company during the year
for Corporate Social Responsibility (CSR) activities was Rs. 20,072,852
(Previous year: Rs. 16,007,525). Amount spent during the year by the
Company was Rs. 20,084,000 (Previous year:Rs. 7,143,200).
8. The Scheme of Amalgamation and Arrangement (''Scheme'') of TIML (the
holding company of the Company) with BCCL(the holding company of TIML)
was filed under the Companies Act, 1956. The Scheme was approved by the
Hon''ble Bombay High Court vide Order dated July 3, 2015 (''Order''),
which was subject to the approval of the Ministry of Information &
Broadcasting, Government of India (''MIB''). The MIB, vide its letter
dated April 25, 2016 (received by the Company on April 26, 2016),
accorded its approval to the change in ownership pattern of the Company
under the Scheme. Consequently, TIML''s entire shareholding in the
Company transferred to BCCL, and BCCL is the sole promoter shareholder
of the Company. The appointed date of the Scheme was April 1,2013.
9. In February 2015, the Company had entered into a non-binding
memorandum of understanding with TV Today Network Limited (''TVTN'') for
purchase of seven radio stations from TVTN. On July 22, 2015 the
Company received the approval from the MIB to purchase TVTN''s four
radio stations in Amritsar, Jodhpur, Patiala and Shimla. The Company
acquired these four stations for a consideration of Rs. 40,000,000. The
Company allocated Rs. 15,377,157 towards fixed assets received from
TVTN and the balance consideration was allocated towards the FM Radio
License cost i.e. NOTMFfor the four stations acquired through the
Business Transfer Agreement I''BTA). The Company completed the
acquisition on September 19, 2015. The Company also paid the migration
fees to the MIB for these four stations in order to migrate from Phase
II to Phase III. As regards the remaining three stations viz. Mumbai,
Delhi and Kolkata, the MIB declined to grant its approval. The Company
and TVTN have appealed against the MIB decision before the Hon''ble
Delhi High Court. The next court hearing in respect of the appeal is
scheduled for July 13, 2016.
10. Pending litigations and claims
a. The Company is involved in various litigations the outcome of which
are considered probable and in respect of which the Company has
aggregate provisions ofRs. 103,137,851 (Previous year Rs. 85,333,139)
as at March 31,2016.
b. Contingent liability - taxation
The Company is contesting certain disallowances to the taxable income
and demands raised by the Income tax authorities, the estimated tax
liability on account of these disallowances and demands is Rs.
11,873,445 (Previous year:Rs. 11,873,445). The management does not
expect the liability from these claims to crystallize and accordingly,
no provision has been recognized in the financial statements for the
same.
11. Previous year''s figures have been reclassified to confirm to this
year''s classification.
Mar 31, 2014
1. Segment Information
In accordance with Accounting StandardÂ17, "Segment Reporting", the
Company''s business segment is radio broadcasting business and it has no
other primary reportable segments. Accordingly, the segment revenue,
segment results, total carrying amount of segment assets and segment
liabilities, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as reflected in
the Financial Statements as of and for the year ended March 31, 2014.
The Company mainly caters to the needs of the domestic market and hence
there are no reportable geographical segments.
2. Related Party Disclosures as required under Accounting Standard 18
- "Related Party Disclosures" are given below:
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) Â Ultimate Holding Company
Times Infotainment Media Limited (TIML) Â Holding Company *
ii. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL) Â Subsidiary Company*
iii. Fellow Subsidiary Companies
Times Innovative Media Limited (TIM)
TIM Delhi Airport Advertising Private Limited (TIMDA)
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Metropolitan Media Company Limited (formerly Times VPL Limited) (MMCL)
Vardhaman Publishers Limited (VPL)
Times Websol Limited (TWL)
Times Mobile Limited (TM)
Brand Equities Treaties Limited (BETL)
Worldwide Media Private Limited (WWM)
BCCL International Events Private Limited (BIEPL)
Times Centre for Learning Limited (TCLL)
iv. Other Related Parties
Bennett Property Holdings Company Limited (BPHCL) Aegon Religare Life
Insurance Company Limited (ARLIC)
v. Key Managerial Personnel
Executive Director & Chief Executive Officer
Mr. Prashant Panday
Mar 31, 2013
Nature of Operations
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. Commitments to the extent not provided for
Estimated amount of contracts remaining to be executed on capital
account Rs. 790,039 (Previous Year : Rs. 1,523,654) net of advances of Rs.
1,088,144 (Previous Year : Rs. 235,565).
2. Sundry Creditors
i. Disclosure has been made as per the definition given in the Micro,
Small and Medium Enterprises Development Act, 2006. The Company
received information from some of the "suppliers" regarding their
status under the Micro, Small and Medium Enterprises Development Act,
2006 and hence disclosures relating to the amounts as at year end
together with interest payable as required under the Act have been
given below:
The information in the table above and that regarding micro and small
enterprises given in Note 7 "Trade Payables" has been determined to the
extent such parties have been identified on the basis of information
available with the Company. This has been relied upon by the auditors.
ii. There are no amounts due and outstanding to be credited to
Investor Education and Protection Fund.
3. The Company has classified the various employee benefits provided
to employees as under:- I) Defined Contribution Plans
a) Provident Fund
b) State Defined Contribution Plans - Employers'' Contribution to
Employee''s Pension Scheme, 1995. During the year, the Company has
recognised the following amounts in the Statement of Profit and Loss :-
4. Segment Information
In accordance with Accounting Standard  17, "Segment Reporting", the
Company''s business segment is radio broadcasting business and it has no
other primary reportable segments. Accordingly, the segment revenue,
segment results, total carrying amount of segment assets and segment
liabilities, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as reflected in
the Financial Statements as of and for the year ended March 31, 2013.
The Company mainly caters to the needs of the domestic market and hence
there are no reportable geographical segments.
5. Related Party Disclosures as required under Accounting Standard 18
- "Related Party Disclosures" are given below:
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) Â Ultimate Holding Company
Times Infotainment Media Limited (TIML) Â Holding Company *
ii. Subsidiary Companies
Alternate Brand Solutions (India) Limited (ABSL) Â Subsidiary Company
iii. Fellow Subsidiary Companies
Mirchi Movies (India) Limited (MML) *
Times Innovative Media Limited (TIM)
TIM Delhi Airport Advertising Private Limited (TIMDAA)
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Times VPL Limited (TVL) *
Vardhaman Publishers Limited (VPL)
Times Websol Limited (TWL)
Times Mobile Limited (TM)
Brand Equities Treaties Limited (BETL)
iv. Other Related Parties
Worldwide Media Private Limited (WWM) Bennett Property Holding Company
Limited (BPHCL) BCCL International Events Private Limited (BIEPL) Aegon
Religare Life Insurance Company (ARLIC)
v. Key Managerial Personnel
Executive Director & Chief Executive Officer
Mr. Prashant Panday
* There are no transactions during the year
6. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, transmission
towers, office and residential premises taken on lease:
a) Lease payments recognised in the Statement of Profit and Loss Rs.
159,735,947 (Previous Year : Rs. 153,516,356).
b) All the agreements provide for early termination by the Company by
giving prior notice in writing.
7. Earnings Per Share (Basic and Diluted)
The number of shares used in computing Basic Earnings per share (EPS)
is the weighted average number of shares outstanding during the year.
8. The Board of Directors of the Company at their meeting held on
August 13, 2012 approved the purchase of its wholly owned subsidiary''s
(ABSL) Intellectual Property Rights Events Business (''IPR Business'') as
a going concern. The slump sale of the IPR Business by ABSL to the
Company was effected through a Business Transfer Agreement (''BTA'') for
a consideration of Rs. 100. The transfer was effective from July 1, 2012.
The purchase resulted in a goodwill of Rs. 49,708 and acquisition of
assets and liabilities amounting to Rs. 83,571,199 and Rs. 83,620,807
respectively.
9. The previous year figures have been reclassified to conform to
this year''s classification.
Mar 31, 2012
Nature of Operations
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.
FOote:
per the Frequency Module (FM) broadcasting policy, effective April 1,
2005 the Company was given the option to migrate all its existing
licenses from Phase I regime to Phase II regime on payment of migration
3es. Migration fees for each station was equal to the average of all
successful bids received for that city. The Company had exercised the
option and had migrated its licenses for all the seven cities to Phase
II regime y payment of migration fees aggregating Rs 815,234,695.
Migration Fees have a remaining amortization period of three years.
Further, the Company had participated in the second round of bidding
and was awarded quench at 25 locations. The payment made by the
Company to acquire these frequencies (One Time Entry Fees) was Rs
1,301,000,000. The remaining arranges e we ears. Based on the opinion
obtained from an independent firm of Chartered Accountants, both
Migration .Fees and One Time Entry Fees have been capita.
Provision for income tax was made on the basis of Section 115JB of the
Income Tax Act, 1961 (Minimum Alternate Tax) in the previous year.
Commitments to the extent not provided for
Estimated amount of contracts remaining to be executed on capital
account Rs 1,523,654 (Previous Year: Rs 933,966) net of advances ofRs
234,565 (Previous Year: Rs 10,922,919),
The information in 26 (i) above and that regarding micro and small
enterprises given in Note 6 "Trade Payables" has been determined to the
extent such parties have been identified on the basis of information
available with the Company. This has' been relied upon by the auditors.
There are no amounts due and outstanding to be credited to Investor
Education and Protection Fund.
Ill) The liability for leave encashment and compensated absences as at
the year end is Rs 14,173,038 (Previous Year: Rs 12,378,764).
2. SEGMENT INFORMATION
In accordance with Accounting Standard - 17, "Segment Reporting''
issued by the Institute of Chartered Accountants of India, the
Company's business segment is radio broadcasting business and it has
no other primary reportable segments. Accordingly, the segment revenue,
segment results, total carrying amount of segment assets and segment
liabilities, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as reflected in
the Financial Statements as of and for the year ended March 31, 2012.
The Company caters to the needs of the domestic market and hence there
are no reportable geographical segments.
2. RELATED PARTY DISCLOSURES
i. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) - Ultimate Holding Company
Times Infotainment Media Limited (TIML) - Holding Company
ii. Subsidiary Companies
Alternate Brand Solutions (India) Limited (ABSL) - Subsidiary Company '
Times Innovative Media Limited (TIM) - Subsidiary Company up to
December 29, 2010 '
TIM Delhi Airport Advertising Private Limited (TIMDAA) - A Subsidiary
Company of TIM (ceased to be a subsidiary from December 29, 2010)
iii. Fellow Subsidiary Companies
Mirchi Movies (India) Limited (MML)
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Optimal Media Solutions Limited (OMSL) '
Times VPL Limited (TVL) [formerly Vijayanand Printers Limited (VAPL)
Vardhaman Publishers Limited (VPL)
Artha Distribution Services Limited (ADSL)*
Times Innovative Media Limited (TIM) - from December 30, 2010
TIM Delhi Airport Advertising Private Limited (TIMDAA) - from December
30, 2010
iv. Other Related Party where common control exists
Aegon Relegate Life Insurance Company (ARLIC)
Worldwide Media Private Limited (WWM)
Bennett Property Holding Company Limited (BPHCL)
v. Key Managerial Personnel Chairman
Mr. Vineet Jain
Executive Director & Chief Executive Officer .
Mr. Prashant Panday - Executive Director from July 1, 2010 .
Non-Executive Directors .
Mr. N. Kumar ,
Mr. Deepak M. Satwalekar - up to March 30,2011
Mr. Ravindra Kulkarni
Mr. Ravindra Dhariwal
Mr. A. P Parigi
Mr. Richard Saldanha - from November 23, 2010
* There are no transactions during the year.
4. Disclosures for Operating Leases ' ,
Disclosures in respect of cancellable agreements for cars, transmission
towers, office and residential premises taken on lease:
a) Lease payments recognized in the Profit and Loss Account Rs
153,516,356 (Previous Year: Rs 136,769,643).
b) All the agreements provide for early termination by the Company by
giving prior notice in writing.
5. On December 29, 2010, the Company sold its entire stake in Times
Innovative Media Limited (TIM) to Bennett, Coleman & Company Limited
(BCCL). The profit from this sale amounting to 1126,848,239 has been
reflected as exceptional items in the financial statements in the
previous year. '
6. The Company has a Media Collaboration Arrangement with Bennett,
Coleman & Company Limited (BCCL), the ultimate holding company. This
arrangement seeks to expand the advertisement market and inter- alia
helps the Company gain access to certain clients who may not otherwise
advertise in FM radio. The revenues generated from this arrangement
where Rs 149,249,927(Previous Year: Rs 167,865,293).
Hitherto, in view of the uncertainties subsequent to the sale as to the
timing and the quantum of the ultimate collection, the Company had
based on the Accounting Standards created a provision for doubtful
debts in respect of the sales made pursuant to this arrangement and
remaining uncollected. The provision amounted to Rs 111,829,272 in the
previous year.
During the current year, the Company revised the terms of settlement
for the deals under the Media Collaboration Arrangement. The Company
also finalized the terms of settlement for all outstanding deals done
up to March 31, 2011. The revised terms and the settlement of the prior
deals resulted in an aggregate net write back of Rs 115,247,775.
7. The Honorable Copyright Board ("CRB'') vide its final order
dated August 25, 2010 ruled that radio broadcasters will be liable to
set apart 2% of the net advertising earnings of each of their FM radio
stations for royalty payment to all the music providers in proportion
to usage. Following a writ petition by the Super Cassettes Industries
Limited ("SCIL"), the Honorable Delhi High Court granted stay on
implementation of the aforesaid CRB order against SCIL. Accordingly,
w.e.f. August 25, 2010 the Company has accounted the music royalty for
sound recordings provided by all music providers other than the SCIL on
a revenue share basis, in the interim, the music royalty for sound
recording provided by SCIL is accounted based on the needle hour rate
indicated in the CRB order dated November 19, 2002.
8 The financial statements for the year ended March 31, 2011 was
prepared as per the then applicable pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended March 31, 2012 are prepared as per the Revised Schedule VI,
Accordingly, the previous year figures have also been reclassified to
conform to this year's classification. The adoption of Revised Schedule
VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial
statements.
Mar 31, 2011
Nature of Operations
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. Contingent Liabilities
a. Guarantees issued by banks on behalf of the Company Rupees
15,254,202 (Previous Year : Rupees 6,000,000).
b. Corporate Guarantee issued by the Company to HDfic Bank on behalf of
Times Innovative Media Limited (an erstwhile subsidiary company) Rupees
Nil (Previous Year : Rupees 200,000,000) and to HSBC Bank Rupees Nil
(Previous Year : Rupees 500,000,000).
2. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account Rupees 933,966 (Previous Year : Rupees 5,094,910) net of
advances of Rupees 10,922,919 (Previous Year : Rupees 10,800,000).
* excludes contribution to gratuity and leave encashment which is based
on actuarial valuations done at an overall company level.
@ The current year's managerial remuneration is for the period
beginning from July 1, 2010 and ending March 31, 2011 paid to the
Executive Director & Chief Executive Officer of the Company.
# The Previous year's managerial remuneration is for the six months
period ended September 30, 2009 paid to the Managing Director of the
Company.
Approval for the appointment and payment of the above remuneration in
the previous year to Mr. A. P. Parigi, Managing Director has been
received from the Central Government of India, Ministry of Corporate
Affairs vide their letter No. SRN/A/56429632/3/2009-CL. VII dated
October 26, 2009 and A70602552-CL-VII dated April 19, 2010.
b. Director's Sitting Fees Rupees 910,000 (Previous Year : Rupees
720,000)
3. One Time Entry Fee (OTEF) and Migration Fee
As per the Frequency Module (FM) broadcasting policy, effective April
1, 2005 the Company was given the option to migrate all its existing
license from Phase I regime to Phase II regime on payment of migration
fees. Migration fees for each station was equal to the average of all
successful bids received for that city. The Company had exercised the
option and had migrated its licenses for all the seven cities to Phase
II regime by payment of migration fees aggregating Rupees 815,234,695.
Migration Fees has remaining amortisation period of four years.
Further, the Company had participated in second round of bidding and
was awarded frequency at 25 locations. The payment made by the Company
to acquire these frequencies (One Time Entry Fees) was Rupees
1,301,000,000. The remaining amortisation period of OTEF ranges between
four and seven years.
Based on the opinion obtained from an independent firm of Chartered
Accountants, both Migration Fees and One Time Entry Fees have been
capitalised as Intangible Asset.
11. The Company has classifed the various employee benefits provided to
employees as under : I) Defined Contribution Plans
a. Provident Fund
b. State Defined Contribution Plans - Employers' Contribution to
Employee's Pension Scheme, 1995.
III) The liability for leave encashment and compensated absenses as at
the year end is Rupees 12,378,764 (Previous Year : Rupees 11,764,713).
4. Segment Information
In accordance with Accounting Standard à 17, "Segment Reporting" issued
by the Institute of Chartered Accountants of India, the Company's
business segment is radio broadcasting business and it has no other
primary reportable segments. Accordingly, the segment revenue, segment
results, total carrying amount of segment assets and segment
liabilities, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as refected in
the Financial Statements as of and for the year ended March 31, 2011.
The Company caters to the needs of the domestic market and hence there
are no reportable geographical segments.
5. Related Party Disclosures
a. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) Ã Ultimate Holding Company
Times Infotainment Media Limited (TIML) Ã Holding Company
b. Subsidiary Companies
Alternate Brand Solutions (India) Limited (ABSL) Ã Subsidiary Company
Times Innovative Media Limited (TIM) Ã Subsidiary Company up to
December 29, 2010
TIM Delhi Airport Advertising Private Limited (TIMDAA) Ã A Subsidiary
Company of TIM (ceased to be a subsidiary from December
29, 2010)
c. Fellow Subsidiary Companies
Mirchi Movies (India) Limited (MML)
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Optimal Media Solutions Limited (OMSL)
Times VPL Limited (TVL) [formerly Vijayanand Printers Limited (VAPL)]
Vardhaman Publishers Limited (VPL)
Artha Distribution Services Limited (ADSL)*
Times Innovative Media Limited (TIM) Ã from December 30, 2010
TIM Delhi Airport Advertising Private Limited (TIMDAA) Ã from December
30, 2010
d. Other Related Party
Aegon Religare Life Insurance Company (ARLIC)
e. Key Managerial Personnel Chairman
Mr. Vineet Jain
Managing Director
Mr. A. P. Parigi à upto September 30, 2009
Executive Director & Chief Executive Officer
Mr. Prashant Panday- Executive Director from July 1, 2010
Non-Executive Directors
Mr. N. Kumar
Mr. Deepak M. Satwalekar - up to March 30, 2011
Mr. Ravindra Kulkarni
Mr. Ravindra Dhariwal
Mr. A. P. Parigi - from October 01, 2009
Mr. Richard Saldanha - from November 23, 2010
* There are no transactions during the year
6. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, transmission
towers, office and residential premises taken on lease:
a. Lease payments recognised in the Profit and Loss Account Rupees
136,769,643 (Previous Year : Rupees 136,974,009).
b. All the agreements provide for early termination by the Company by
giving prior notice in writing.
7. On December 29, 2010, the Company sold its entire stake in Times
Innovative Media Limited (TIM) to Bennett, Coleman & Company Limited
(BCCL). The profit from this sale amounting to Rupees 126,848,239 has
been refected as exceptional items in the financial statements.
8. The Company has a Media Collaboration Arrangement with Bennett,
Coleman & Company Limited (BCCL), the ultimate holding company. This
arrangement seeks to expand the advertisement market and inter-alia
helps the Company to gain access to certain clients who may not
otherwise advertise in FM radio. The revenues generated from this
arrangement were Rupees 167,865,293 (Previous Year : Rupees
144,153,607) in the current year. Subsequently, in view of the
uncertainties as to timing and the quantum of the ultimate collection,
the Company has based on the principles of prudence, created a
provision for doubtful debts to the extent of Rupees 111,829,272
(Previous Year : Rupees 127,735,492) in respect of the sales made
pursuant to this arrangement.
9. Provision for income tax has been made on the basis of Section
115JB of the Income Tax Act, 1961 (Minimum Alternate Tax).
10. The Honourable Copyright Board ("CRB") vide its final order dated
August 25, 2010 ruled that radio broadcasters will be liable to set
apart 2% of the net advertising earnings of each of their FM radio
stations for royalty payment to all the music providers in proportion
to usage. Following a writ petition by the Super Cassettes Industries
Limited ("SCIL"), the Honourable Delhi High Court granted stay on
implementation of the aforesaid CRB order against SCIL. Accordingly,
w.e.f. August 25, 2010 the Company has accounted the music royalty for
sound recordings provided by all music providers other than the SCIL on
a revenue share basis. In the interim, the music royalty for sound
recording provided by SCIL is accounted based on the needle hour rate
indicated in the CRB order dated November 19, 2002.
11. Recoveries deducted from expenses are on account of sharing of
common expenses with subsidiaries and Group Companies.
12. Information pursuant to other provisions of Part II of Schedule VI
to The Act, is either nil or not applicable to the Company for the
year.
13. Previous year's figures have been regrouped where necessary.
Mar 31, 2010
Nature of Operations
The Company was incorporated on June 24, 1999. The Company operates FM
radio broadcasting stations through the brand Radio Mirchi in 32
Indian cities. The Companys revenue is generated mainly from the sale
of air time for advertising.
2. Contingent Liabilities
a) Guarantees issued by banks on behalf of the Company Rupees 6,000,000
(Previous Year : Rupees 6,000,000).
b) Corporate Guarantee issued by the Company to HDFC Bank on behalf of
Times Innovative Media Limited (a subsidiary company) Rupees
200,000,000 (Previous Year : Rupees 200,000,000) and to HSBC Bank
Rupees 500,000,000 (Previous Year : Rupees Nil).
3. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account Rupees 5,094,910 (Previous Year : Rupees 87,809) net of
advances of Rupees 11,089,571 (Previous Year : Rupees 20,500,000).
* In the previous year, provision for / contributions to employee
retirement / post retirements, which are based on actuarial valuations
done on an overall company basis, are excluded above.
# The current years managerial remuneration is for the six months
period ended September 30, 2009 paid to the Managing Director of the
Company since the Company did not have a managing / whole-time director
after that date.
Approval for the appointment and payment of the above remuneration to
Mr. A. P. Parigi, Managing Director, has been received from the Central
Government of India, Ministry of Corporate Affairs vide their letter
No. 12/928/2007- CL.VII dated December 6, 2007, SRN/A/56429632/3/2009-
CL.VII dated October 26, 2009 and A70602552-CL-VII dated April 19, 2010.
Note: The computation of proft under Section 309(5) of the Companies
Act, 1956 is not applicable as no commission is payable to the Managing
Director.
b) Directors Sitting Fees Rs. 720,000 (Previous Year : Rupees 690,000)
4. One Time Entry Fee (OTEF) and Migration Fee
As per the new Frequency Module (FM) broadcasting policy, effective
April 1, 2005 the Company had been given the option to migrate all its
existing licence from Phase I regime to Phase II regime on payment of
migration fees. Migration fees for each station shall be equal to the
average of all successful bids received for that city. The Company had
exercised the option and has migrated its licences for all the seven
cities to Phase II regime by payment of migration fees aggregating
Rupees 815,234,695.
Further, the Company had participated in second round of bidding and
was awarded frequency at 25 locations. The payment made by the Company
to acquire these frequencies (One Time Entry Fees) is Rupees
1,301,000,000.
Based on the opinion obtained from an independent frm of Chartered
Accountants, both Migration Fees and One Time Entry Fees have been
capitalised as Intangible Asset.
G) Expected employers contribution for the next year Rupees 4,805,497
(Previous Year : Rupees 5,420,826).
III) The liability for leave encashment and compensated absenses as at
the year end is Rupees 11,764,713 (Previous Year : Rupees 11,132,510).
5. Segment Information
In accordance with Accounting Standard à 17, ÃSegmental Reporting"
issued by the Institute of Chartered Accountants of India, the
Companys business segment is radio broadcasting business and it has no
other primary reportable segments. Accordingly, the segment revenue,
segment results, total carrying amount of segment assets and segment
liability, total cost incurred to acquire segment assets and total
amount of charge for depreciation during the year, is as refected in
the Financial Statements as of and for the year ended March 31, 2010.
The Company caters to the needs of the domestic market and hence there
are no reportable geographical segments.
6. Related Party Disclosures
a. Parties where control exists
Bennett, Coleman & Company Limited (BCCL) Ã Ultimate Holding Compan
Times Infotainment Media Limited (TIML) Ã Holding Company
b. Subsidiary Companies
Times Innovative Media Limited (TIM) Ã Subsidiary Company Alternate
Brand Solutions (India) Limited (ABSL) Ã Subsidiary Company
c. Fellow Subsidiary Companies
Vardhaman Publishers Limited (VPL)
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Zoom Entertainment Networks Limited (ZENL)*
Optimal Media Solutions Limited (OMSL)
Artha Distribution Services Limited (ADSL)
Vijayanand Printers Limited (VAPL)
Mirchi Movies (India) Limited (MML)
d. Other Related Party where common control exists Worldwide Media
Private Limited (WWM)*
* There are no transactions during the year.
e. Key Managerial Personnel
Chairman
Mr. Vineet Jain
Managing Director
Mr. A. P. Parigi à upto September 30, 2009
Non - Executive Directors
Mr. Ravindra Dhariwal
Mr. N. Kumar
Mr. Deepak M. Satwalekar
Mr. Ravindra Kulkarni
Mr. A. P. Parigi à from October 01, 2009
Chief Executive Offcer
Mr. Prashant Panday
7. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, offce and
residential premises taken on lease:
a) Lease payments recognised in the Proft and Loss Account Rupees
146,600,344 (Previous Year : Rupees 137,328,503).
b) All the agreements provide for early termination by either party by
giving prior notice in writing.
8. Employee Stock Option Scheme (ESOS)
Pursuant to the resolution passed by the Board of directors and members
of the Company at the meeting of Board of Directors and Extra Ordinary
General Meeting of the Members of the Company respectively, held on
November 5, 2005, the Company had introduced an Employee Stock Option
Scheme (Ãthe scheme") for its existing and future permanent employees
and directors and existing and future permanent employees and directors
of its Subsidiary Company and Holding Company.
The scheme provides that the total number of options granted there
under will be 109,360. Pursuant to a resolution passed by the
Remuneration / Compensation Committee at its meeting held on November
5, 2005, all 109,360 options that are exercisable for Equity Shares
have been granted at an exercise price of Rupees 90.
In accordance with the Guidance Note on ÃAccounting for Employee
Share-based Payments" issued by the The Institute of Chartered
Accountants of India and Employee Stock Option and Stock Purchase
Guidelines, 1999 issued by the Securities and Exchange Board of India,
fair value of these options, on the grant date, is amortised over the
vesting period.
9. The Company has a Media Collaboration Arrangement with Bennett,
Coleman & Company Limited (BCCL), the ultimate holding company. This
arrangement seeks to expand the advertisement market and inter-alia
helps the Company to gain access to certain clients who may not
otherwise advertise in FM radio.
The revenues generated from this arrangement were Rupees 144,153,607 in
the current year. Subsequently, in view of the uncertainties as to
timing and the quantum of the ultimate collection, the Company has
based on the principles of prudence, created a provision for doubtful
debts to the extent of Rupees 127,735,492 in respect of the sales made
from this arrangement.
10. Recoveries deducted from expenses are on account of sharing of
common expenses with subsidiaries and Group Companies.
11. The Company has made investment aggregating Rupees 320,000,000
(83.44% shares) in Times Innovative Media Limited (TIM) a subsidiary of
the Company.
As at March 31, 2010 TIM had accumulated losses of Rupees
1,496,740,430. This has resulted in net worth erosion of 65%. This is
due to the losses incurred in the past few years on account of severe
economic downturn coupled with expansion of inventory. TIM has
critically reviewed its property portfolio and has given up
non-strategic loss making properties. The Company has assessed TIMs
revenue and cash fow projections has agreed to provide fnancial support
to TIM as and when required.
In view of the above and since the investment is long term in nature,
in the opinion of the Management, no provision for diminution is
required presently to the carrying value of the investment.
12. Information pursuant to other provisions of Part II of Schedule VI
to The Act, is either nil or not applicable to the Company for the
year.
13. Previous years fgures have been regrouped where necessary.