Accounting Policies of GTPL Hathway Ltd. Company
Mar 31, 2023
Significant Accounting Policies
1.2.1 Basis of Preparation and Presentation
These standalone financial statements (hereinafter
referred to as "financial statements" in the standalone
financial statements) are prepared in accordance with
the Indian Accounting Standards ("Ind AS") as per the
Companies (Indian Accounting Standards) Rules, 2015
notified under Section 133 of Companies Act, 2013 ("the
Act'''') and amendments there to, other relevant provisions
of the Act and guidelines issued by the Securities and
Exchange Board of India (SEBI), as applicable.
The financial statements are authorised for issue by the
Board of Directors of the Company at their meeting held
on April 15, 2023.
Amendments to Ind AS issued but not yet effective
On March 31, 2023, the Ministry of Corporate Affairs (MCA)
has notified Companies (Indian Accounting Standards)
Amendment Rules, 2023. This notification has resulted
into amendments in the following existing accounting
standards which are applicable to company from April 01,
2023.
i Ind AS 101 - First-time Adoption of Indian Accounting
Standards
ii Ind AS 102 - Share-based Payment
iii Ind AS 103 - Business Combinations
iv Ind AS 107 - Financial Instruments Disclosures
v Ind AS 109 - Financial Instruments
vi Ind AS 115 - Revenue from Contracts with Customers
vii Ind AS 1 - Presentation of Financial Statements
viii Ind AS 8 - Accounting Policies, Changes in
Accounting Estimates and Errors
ix Ind AS 12 - Income Taxes
x Ind AS 34 - Interim Financial Reporting
Application of above standards are not expected to
have any significant impact on the Company''s financial
statements.
1.2.2 Historical cost convention
The financial statements have been prepared on a
historical cost basis, except for the following:
- Certain financial assets and liabilities (including
derivative instruments) measured at fair value.
- Net defined benefit (asset) / liability measured as per
actuarial valuation
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date
under current market conditions, regardless of whether
that price is directly observable or estimated using another
valuation technique. In determining the fair value of an
asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when
pricing the asset or liability at the measurement date.
1.2.3 Functional and presentation currency
The Company''s financial statements are presented in
Indian Rupees, which is also the Company''s functional
currency. All amounts have been rounded off to the
nearest Millions, except where otherwise indicated.
1.2.4 Classification of Assets and Liabilities into Current/
Non-Current
Based on the nature of activities of the Company and
the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company
has determined its operating cycle as twelve months for
the purpose of classification of its assets and liabilities as
current and non-current.
For the purpose of Balance Sheet, an asset is classified as
current if:
(i) It is expected to be realised, or is intended to be sold
or consumed, in the normal operating cycle; or
(ii) It is held primarily for the purpose of trading; or
(iii) It is expected to realise the asset within twelve months
after the reporting period; or
(iv) The asset is a cash or cash equivalent unless it is
restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting
period.
All other assets are classified as non-current.
1.3 Significant Management judgements, estimates &
assumptions
The preparation of financial statements in conformity
with Ind AS requires management to make judgments,
estimates and assumptions, that affect the application
of accounting policies and the reported amounts of
assets, liabilities and disclosures of contingent assets and
liabilities at the date of these financial statements and the
reported amounts of revenues and expenses for the years
presented. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised and future periods affected.
The following are significant management judgements
in applying the accounting policies of the Company that
have the most significant effect:
a. Recognition of deferred tax assets:
The extent to which deferred tax assets can be
recognised is based on the assessment of the
probability of the Company''s future taxable income
against which the deferred tax assets can be utilised.
b. Useful lives of property, plant & equipment and
intangible assets:
The Company uses its technical expertise along
with historical and industry trends for determining
the economic life of an asset/component of an
asset. The useful lives are reviewed by management
periodically and revised, if appropriate. In case of
a revision, the unamortised depreciable amount is
charged over the remaining useful life of an asset.
c. Fair value measurement of financial instruments:
In estimating the fair value of an asset or liability, the
Company uses market-observable data to the extent
it is available. Where level 1 inputs are not available,
the Company engages third party qualified valuers
to perform the valuation. The management works
closely with qualified external valuers to establish the
appropriate valuation techniques and inputs to the
model.
d. Defined benefit obligations:
The defined benefit obligations measured using
Projected Unit Credit Method of acturial valuation
techniques. An actuarial valuation involves making
key assumption of life expectancies, salary increases
and withdrawal rates. Variation in these assumptions
may impact the defined benefit obligation.
e. Impairment assessment of Investment in
Subsidiaries, Joint Ventures and Associates:
The Company testes impairment for investments and
provids for impairment where the carrying amount
of investments exceeds its recoverable amount.
The recoverable amount is higher of "value in use"
and "fair value less cost of disposal". The Company
calculates value in use as net present value of
forecasted cash flows through investment. Fair value
less cost of disposal is calculated through Market
Multiple method, for which transaction multiples of
comparable companies are taken.
f. Impairment Assessment of Assets:
The Company reviews its carrying value of assets
annually to assess whether there is any indication
for impairment. If any such indication exists,
the Company estimates the recoverable amount
of such assets based on value in use calculations.
These calculations require the use of estimates such
as discount rates and growth rates.
g. Leases:
The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
The Ind AS 116 requires lessees to determine the
lease term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The Company uses significant judgement
in assessing the lease term (including anticipated
renewals) and the applicable discount rate.
h. Revenue and Cost recognition from
Engineering, Procurement and Construction
(''EPC'') contracts:
The Company was appointed as Project
Implementation Agency along with its consortium
partner for package B of Bharat Net Phase II Project
in the state of Gujarat (''the project''). Due to the nature
of the project, recognition of revenue and cost
involves usage of percentage of completion method
which is determined based on the progress towards
complete satisfaction of that performance obligation,
which involves significant judgments, identification
of contractual obligations and the Company''s rights
to receive payments for performance completed till
date.
i. Contingencies:
Management judgement is required for estimating
the possible outflow of resources, if any, in respect
of contingencies, claim, litigations etc against the
Company as it is not possible to predict the outcome
of pending matters with accuracy.
1.4 Revenue recognition1.4.1 Revenue from Operations
Revenue is recognised on the basis of approved contracts
regarding the transfer of goods or services to a customer
for an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those
goods or services. Revenue is measured at the fair value of
consideration received or receivable taking into account
the amount of discounts, rebates, outgoing taxes on sales
of goods or services.
a. Subscription income includes subscription from
subscribers/ Cable Operators relating to cable TV.
Revenue from Operations is recognised on accrual
basis based on underlying subscription plan or
agreements with the concerned subscribers/ Cable
Operators.
b. Unbilled revenue represents the value of services
rendered but not yet been invoiced on the reporting
date due to contractual terms.
c. Revenue from Engineering, Procurement and
Construction (''EPC'') contracts having performance
obligation to be fulfilled over the time are recognised
measuring the progress towards complete
satisfaction of that performance obligation. The
Company measures the progress using the Output
method. In the period in which the performance
obligation of the project is significantly completed,
actual revenue and costs for the project are compared
with revenue and cost recognised in the earlier
periods and the differential amount are recognised
in the period in which the project is significantly
completed.
d. Costs to fulfil a contract which is directly related to a
contract or to an anticipated contract, generates or
enhance resources of the Company that will be used
in satisfying performance obligations in the future
and expected to be recovered are recognised as an
Asset.
e. Activation fee & Installation fees on Set top Boxes
(STBs) is recognised on accrual basis based on
underlying agreements. One-time Rent on Set top
Boxes (STBs) is deferred over expected customer
retention period of 5 years.
f. Placement / Marketing Incentive is recognised
on accrual basis based on agreements with the
concerned broadcasters.
g. Advertisement income is recognised when relevant
advertisements get telecasted.
The Company collects Goods and Service Tax (GST)
on behalf of the government and, therefore, it is not an
economic benefit flowing to the Company. Hence, it is
excluded from revenue.
1.4.2 Other Operating Revenues
Other Operating Income comprises of fees received for
Lease & Rent of Equipment, consultancy services and
License Fees. Income from such services is recognised
as per the terms of underlying agreements/ arrangements
with the concerned parties, when no significant
uncertainties exist regarding the amount of consideration
that will be derived.
Interest income is recognised using the effective interest
rate method.
Income Tax expenses comprise current tax and deferred
tax.
Current Tax is measured on the basis of estimated taxable
income for the current accounting period in accordance
with the applicable tax rates and the provisions of the
Income-tax Act, 1961 and other applicable tax laws.
Current tax assets and current tax liabilities are offset when
there is a legally enforceable right to set off the recognised
amounts and there is an intention to settle the asset and
the liability on a net basis.
Deferred tax is recognised in respect of temporary
differences between carrying amount of assets and
liabilities for financial reporting purpose and the
corresponding amounts used for taxation purpose.
Deferred tax liabilities are recognised for all taxable
temporary differences, except for:
- temporary differences arising from the initial
recognition of an asset or liability in a transaction that
is not a business combination and that affects neither
the accounting nor taxable profit or loss; and
- Taxable temporary differences arising on the initial
recognition of goodwill
Deferred tax assets are recognised for all deductible
temporary differences including unused tax credits and
tax losses. Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax
credits and unused tax losses can be utilised. Deferred tax
assets and liabilities are measured at the tax rates that are
expected to be applied to the temporary differences when
they reverse, based on the laws that have been enacted or
substantively enacted at the reporting date.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be
utilise.
Deferred tax related to items recognised outside profit or
loss in correlation to the underlying transaction either in
OCI or Equity.
The determination of whether an agreement is, or contains,
a lease is based on the substance of the agreement at the
inception date, whether fulfilment of the agreement is
dependent in the use of a specific asset or assets or the
arrangement conveys a right to use the asset, even if that
right is not explicitly specified in an arrangement.
Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term.
The estimated useful lives of right-of-use assets are
determined on the same basis as those of Property,
plant and equipment or as per the lease term whichever
is lower. The right-of-use asset is periodically reviewed
for impairment losses, if any, and adjusted for certain re¬
measurements of the lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, company''s incremental borrowing rate.
Generally, the Company uses its incremental borrowing
rate as the discount rate.
Lease payments included in the measurement of the lease
liability comprise the following:
- fixed payments, including in-substance fixed
payments.
- variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date.
- amounts expected to be payable under a residual value
guarantee; and
- the exercise price under a purchase option that the
Company is reasonably certain to exercise and lease
payments in an optional renewal period if the Company
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the
Company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is re-measured when there is
a change in future lease payments arising from a change
in an index or rate, if there is a change in the Company''s
estimate of the amount expected to be payable under
a residual value guarantee, or if company changes
its assessment of whether it will exercise a purchase,
extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount
of the right-of-use asset or is recorded in profit or loss if
the carrying amount of the right-of-use asset has been
reduced to zero.
The Company presents right-of-use assets that do not
meet the definition of investment property in ''property,
plant and equipment'' and lease liabilities in ''financial
liabilities'' in the financial statements.
Short-term leases and leases of low-value assets
Company has elected not to recognise right-of-use assets
and lease liabilities for short-term leases of real estate
properties that have a lease term of less than 12 months.
It also applies the lease of low-value assets recognition
exemption that are considered to be low value. The
Company recognises the lease payments associated with
these leases as an expense on a straight-line basis over the
lease term.
1.6.2 The Company as a Lessor.
Lease income from operating leases where the Company
is a lessor is recognised as income over the lease term.
Business combinations except for common control
transactions are accounted for using the acquisition
method. At the acquisition date, the identifiable assets
acquired, and the liabilities assumed are recognised at
their acquisition date fair values.
Business combinations involving entities or businesses
under common control will be accounted for using the
pooling of interest method. Under pooling of interest
method, the assets and liabilities of the combining
entities are reflected at their carrying amounts, the only
adjustments that are made are to harmonise accounting
policies.
Goodwill is measured at cost, being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous
interest held, over the net identifiable assets acquired and
liabilities assumed. Such goodwill is tested annually for
impairment. If the fair value of the net assets acquired is
in excess of the aggregate consideration transferred, then
the gain is recognised in OCI and accumulated in equity
as capital reserve. However, if there is no clear evidence of
bargain purchase, the entity recognises the gain directly in
equity as capital reserve, without routing the same through
OCI.
1.8 Impairment of Non- Financial Assets
At the end of each reporting period, the Company reviews
the carrying amounts of non-financial assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which
the asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets
are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash¬
generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than
its carrying amount, the carrying amount of the asset is reduced
to its recoverable amount. An impairment loss is recognised
immediately in Statement of Profit and Loss.
When an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognised for the asset in prior
years. A reversal of an impairment loss is recognised
immediately in the Statement of Profit and Loss.
Cash and cash equivalents comprise cash at bank, cash
/ cheques in hand, demand deposits with banks and
other short-term investments with an original maturity of
three months or less. Bank overdrafts are shown within
borrowings in current liabilities in the balance sheet.
1.10 Investment in subsidiaries, joint ventures and
associates
The Company''s investments in its subsidiaries, joint
ventures and associates are measured at cost and
reviewed for impairment at each reporting date.
On disposal of the Investment, the difference between the
net disposal proceeds and the carrying amount is charged
or credited to the Statement of Profit and Loss.
1.11 Financial Assets1.11.1 Classification of Financial Assets
The Company classifies its financial assets in the following
measurement categories:
- those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and
- those measured at amortised cost
The classification depends on the entity''s business model
for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will
either be recorded in profit or loss or other comprehensive
income. For investments in equity instruments, this
will depend on whether the Company has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
other comprehensive income.
1.11.2 Initial Recognition of Financial Assets
At initial recognition, the Company measures a financial
asset at its fair value plus, in the case of a financial asset
subsequently not measured at fair value through profit
or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss
are expensed in profit or loss.
1.11.3 Subsequent measurement of Financial Asset
A Financial Asset is measured at the amortised cost if both
the following conditions are met:
- The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and
- Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.
After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in finance income in
the Statement of Profit and Loss. The losses arising from
impairment are recognised in the Statement of Profit and
Loss.
Financial Assets included within the fair value through
profit and loss (FVTPL) category are measured at fair value
with all changes recognised in the Statement of Profit and
Loss.
The Company subsequently measures all equity
investments, except Equity instruments measured at
cost in accordance with Ind AS 27, at fair value. Where
the Company''s management has elected to present
fair value gains and losses on equity investments in
other comprehensive income, there is no subsequent
reclassification of fair value gains and losses to profit or
loss. Dividends from such investments are recognised in
profit or loss as other income when the Company''s right to
receive payments is established.
Changes in the fair value of financial assets at fair value
through profit or loss are recognised in other gain/ (losses)
in the statement of profit and loss.
1.11.4 Impairment of financial assets
Expected credit losses are recognised for all financial
assets subsequent to initial recognition other than
financials assets in FVTPL category. For financial assets
other than trade receivables, the Company recognises 12
month expected credit losses for all originated or acquired
financial assets if at the reporting date the credit risk of the
financial asset has not increased significantly since its initial
recognition. The expected credit losses are measured as
lifetime expected credit losses if the credit risk on financial
asset increases significantly since its initial recognition.
The Company provides, for trade receivable, expected
credit loss as per simplified approach using provision
matrix on the basis of its historical credit loss experience.
The impairment losses and reversals are recognised in
Statement of Profit and Loss.
1.11.5 De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company''s
balance sheet) when:
- the rights to receive cash flows from the asset have
expired, or
- the Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation
to pay the received cash flows in full without
material delay to a third party under a ''pass-through''
arrangement and either:
a) the Company has transferred substantially all
the risks and rewards of the asset, or
b) the Company has neither transferred nor
retained substantially all the risks and rewards of
the asset but has transferred control of the asset.
1.12 Financial liabilities and equity instruments:
Classification as debt or equity
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and
an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by a Company
are recognised at the proceeds received.
(i) Initial recognition and measurement
Financial liabilities are initially measured at fair value
plus, except for financial liability subsequently not
measured at fair value through profit and loss (FVTPL),
transaction costs that are directly attributable to its
acquisition or issue.
(ii) Subsequent measurement
All financial liabilities are subsequently measured at
amortised cost using effective interest method or at
FVTPL.
Financial liabilities at fair value through profit or
loss
Financial liabilities at fair value through profit or
loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition
as at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are
incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial
instruments entered into by the Company that are
not designated as hedging instruments in hedge
relationships and effective as defined by Ind-AS
109. Gains or losses on liabilities held for trading are
recognised in the profit or loss.
(iii) De-recognition
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same lender
on substantially different terms, or the terms of an
existing liability are substantially modified, such
an exchange or modification is treated as the de¬
recognition of the original liability and the recognition
of a new liability. The difference in the respective
carrying amounts is recognised in the statement of
profit and loss.
1.13 Foreign Currency Transactions:
Monetary items
Foreign currency transactions are recorded at the
exchange rate prevailing at the date of transaction.
Exchange difference arising on settlement of transactions
is recognised as income or expense in the year in which
they arise.
Monetary assets and liabilities denominated in foreign
currencies and remaining unsettled at the end of the year
are translated to functional currency at the exchange rate
prevailing at the reporting date. Exchange differences are
recognised in profit or loss except exchange differences
arising from the translation of items which are recognised
in OCI.
For monetary items that are denominated in a foreign
currency and are measured at amortised cost at the end
of each reporting period, the foreign exchange gains and
losses are determined based on the amortised cost of the
instruments and are recognised in statement of profit and
loss.
For monetary items that are measured as at FVTPL, the
foreign exchange component forms part of the fair value
gains or losses and is recognised in profit or loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the transaction.
1.14 Offsetting financial instruments
Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or realise
the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent on future events
and must be enforceable in the normal course of business
and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.
1.15 Property, plant and equipment
Property, plant and equipment is stated at cost, less
accumulated depreciation and accumulated impairment
losses. The initial cost of an asset comprises its purchase
price, any costs directly attributable to bringing the asset
to the location and condition necessary for it to be capable
of operating in the manner intended by management, the
initial estimate of decommissioning obligation, if any. The
purchase price is the aggregate amount paid and the
fair value of any other consideration given to acquire the
asset.
Subsequent costs are included in the asset''s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Set Top Boxes (STBs) on hand at the year-end are included
in Capital Work in Progress. On installation such devices
are capitalised or treated as sale, as the case may be.
Any asset whose value is less than '' 5,000 is charged to
Statement of Profit & Loss.
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
Stores & Spares which meet the definition of property,
plant and equipment and satisfy the recognition criteria of
Ind AS 16 are capitalised as property, plant and equipment.
1.15.1 Depreciation on Property, plant and equipment
Depreciation is the systematic allocation of the depreciable
amount of PPE over its useful life and is provided on a
straight-line basis over the useful lives as prescribed in
Schedule II to the Act or as per technical assessment.
Depreciable amount for PPE is the cost of PPE less its
estimated residual value. The useful life of PPE is the period
over which PPE is expected to be available for use by the
Company, or the number of production or similar units
expected to be obtained from the asset by the Company.
In case of Set Top Boxes (STBs) Company uses different
useful lives than those prescribed in Schedule II to the Act.
The useful lives have been assessed based on technical
advice, taking into account the nature of the PPE and the
estimated usage of the asset on the basis of management''s
best estimation of obtaining economic benefits from those
classes of assets.
Such classes of assets and their estimated useful lives are
as under:
1.16.3 De-recognition of intangible assets
An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, are recognised in profit or loss when the asset is
derecognised.
Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready
for its intended use or sale are capitalised as part of the
cost of the asset. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs consist
of interest and other costs that the Company incurs in
connection with the borrowing of funds. Borrowing cost
also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.
1.16 Intangible Assets1.16.1 Intangible Assets acquired separately
Intangible assets comprises of Cable Television Franchise,
Non-Compete Franchise, Movie & Serial Rights, Goodwill
and Software. Cable Television and Non- Compete
Franchisee represents purchase consideration of
a network that mainly attributable to acquisition of
subscribers and other rights, permission etc. attached to a
network.
The Intangible Assets with finite useful lives are carried
at cost less accumulated amortisation and impairment
losses, if any.
I ntangible assets are assessed for impairment whenever
there is an indication that the intangible asset may be
impaired. Intangible assets with indefinite useful lives are
not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
Mar 31, 2018
1.1 Corporate Information
GTPL Hathway Limited (âthe Companyâ or âthe groupâ) is a Public Company Limited by shares. The Company is engaged in distribution of television channels through analog and digital cable distribution network.
The Company is a public limited company incorporated and domiciled in India and incorporated under the Companies act, 1956. The address of Corporate office is GTPL House, Shree one building, Opp Armieda, Sindhu Bhavan Road, Near Pakwan Cross Road, Bodakdev, Ahmedabad 380059.
1.2 Basis of preparation and presentation
These standalone financial statements (hereinafter referred to as âfinancial statementsâ in the standalone financial statements) are prepared in accordance with the Indian Accounting Standards (âInd ASâ) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013 (âthe Actââ), other relevant provisions of the Act and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.
1.2.1 Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
- Certain financial assets and liabilities (including derivative instruments) measured at fair value;
- Defined benefit plans - plan assets measured at fair value as per actuarial valuation
1.2.2 Functional and presentation currency
The Companyâs Standalone financial statements are prepared in Indian Rupees, which is also the Companyâs functional and presentation currency.
1.2.3 Classification of Assets and Liabilities into Current/Non-Current
All assets and liabilities have been classified as current or non-current, wherever applicable as per the operating cycle of the Company and as per the guidance as set out in Schedule III to the Companies Act, 2013.
1.3 Significant Management judgements, estimates & assumptions
While preparing financial statements in conformity with Ind AS, management make certain estimates and assumptions that require subjective and complexjudgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. We continually evaluate these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The following are significant management judgements in applying the accounting policies of the Company that have the most significant effect:
a. Recognition of deferred tax assets:
The extent to which deferred tax assets can be recognised is based on the assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilised.
b. Useful lives of property, plant &equipment:
The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.
c. Fair value measurement of financial instruments:
In estimating the fair value of an asset or liability, the Company uses market-observable data to the extent it is available. Where level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The management works closely with qualified external valuers to establish the appropriate valuation techniques and inputs to the model.
d. Defined benefit obligations:
The cost of the defined benefit gratuity plan, provident fund and other post-employment medical benefits and the present value of the gratuity and provident fund obligation are determined using actuarial valuations. An actuarial valuation involves making key assumption of life expectancies, salary increases and withdrawal rates. Variation in these assumptions may impact the defined benefit obligation amount and the annual defined benefit expense.
e. Contingencies:
Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies, claim, litigations etc against the Company as it is not possible to predict the outcome of pending matters with accuracy.
1.4 Revenue recognition
1.4.1 Revenue from Operations
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
a. Subscription income includes subscription from Subscribers / Cable Operators relating to cable TV. Revenue from Operations in DAS notified area is recognized on accrual basis based on underlying subscription plan or agreements with the concerned subscribers / Cable Operators. Whereas, Subscription Income from Cable TV Operators in Non-DAS area, is accrued monthly based on number of connections declared by the said operators to the Company. In cases where revision of number of connections and / or rate is under negotiations at the time of recognition of revenue, the Company recognizes revenue as per invoice raised. Adjustments for the year, if any, arising on settlement is adjusted against the Revenue. Other cases are reviewed by the management periodically.
b. Activation fee, which in substance is an advance payment for future services or the ongoing services being provided are essential to the subscribers receiving the expected benefit of the upfront payment of activation fee. Accordingly, revenue from activation fees shall be amortized over expected customer retention period i.e. 5 years.
c. Carriage / Placement income is recognized on accrual basis based on agreements with the concerned broadcasters.
d. Advertisement income is recognised when relevant advertisements get telecasted.
The Company collects service tax/Goods and Service Tax (GST) and entertainment tax on behalf of the government and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.
1.4.2 Other Operating Revenues From Services
Other Operating Income comprises of fees received for Lease & Rent of Equipment and consultancy services. Income from such services is recognized as per the terms of underlying agreements/ arrangements with the concerned parties, and no significant uncertainties exist regarding the amount of consideration that will be derived.
From Sales of goods
Other Operating Income comprises of profit received on sale of Set Top Boxes. Income from profit from set top box is arrived at by netting off the cost of purchases of set top boxes with its sale. Income from such sale of goods is recognized when no significant uncertainties exist regarding the amount of consideration that will be derived and risk and rewards of ownership of the goods transferred.
1.4.3 Interest Income
Interest income from debt instruments is recognized using the effective interest rate method on time proportionate basis. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset.
1.4.4 Share of profit/loss from Partnership Firms
Share of Profit / Loss from Partnership Firms is accounted in respect of the financial year of the firm, ending on or before the balance sheet date on the basis of their audited accounts.
1.5 Income tax
Income Tax expenses comprise current tax and deferred tax charge or credit.
1.5.1 Current Tax
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
1.5.2 Deferred tax
Deferred taxes are computed for all temporary differences between the accounting base and the tax base of assets and liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
- When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
- In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
1.6 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
1.6.1 As a lessee Finance Lease
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Operating Lease
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
1.6.2 As a lessor
Lease income from operating leases where the company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
1.7 Business combinations
Business combinations are accounted for using the acquisition method. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values.
Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interest method. Under pooling of interest method, the assets and liabilities of the combining entities are reflected at their carrying amounts, the only adjustments that are made are to harmonise accounting policies.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
1.8 Impairment of Non- Financial Assets
At the end of each reporting period, the Company reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, cash / cheques in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.10 Non-current assets held for sale and discontinued operations
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Noncurrent assets classified as held for sale are presented separately from the other assets in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit and loss.
1.11 Investment in subsidiaries, joint ventures and associates
Subsidiaries are entities over which the company has control. The company controls an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The Companyâs investments in its subsidiaries, joint ventures and associates are accounted at cost and reviewed for impairment at each reporting date.
1.12 FinancialAssets
1.12.1 Classification of Financial Assets
The company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
1.12.2 Initial Recognition of Financial Assets
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
1.12.3 Debt instruments at Amortised cost
A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and other receivables.
Debt instruments included within the fair value through profit and loss (FVTPL) category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
1.12.4 Equity instruments
The company subsequently measures all equity investments at fair value. Where the companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the companyâs right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain/ (losses) in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
(i) Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk since inception.
For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
(ii) De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
- the rights to receive cash flows from the asset have expired, or
- the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either:
a) the Company has transferred substantially all the risks and rewards of the asset, or
b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
1.13 Financial Liabilities:
1.13.1 Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, financial guarantee contracts or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
(ii) Subsequent measurement
All financial liabilities are subsequently measured at amortised cost using effective interest method or at FVTPL. The subsequent measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships and effective as defined by Ind-AS 109. Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities can be designated upon initial recognition at fair value through profit or only if such election so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ) as stated in Ind-AS 109. For non - held for trading liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI, unless such recognistion in OCI would create or enlarge an accounting mismatch in profit or loss, in which case these effects in credit risk are recognised in P &L. These gains/ loss are not subsequently transferred to P&L. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The company has not designated any financial liability as at fair value through profit and loss.
Financial guarantee contracts
Financial guarantee contracts issued by the company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortisation.
(iii) De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
1.14 Foreign Currency Transaction:
Monetary items
Foreign currency transactions are recorded at the exchange rate prevailing at the date of transactions. Exchange difference arising on settlement of transactions is recognized as income or expense in the year in which they arise.
Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at the year-end rate and difference in translations and unrealised gains / (losses) on foreign currency transactions are recognised in the statement of profit & loss.
Non - Monetary items:
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in Other Income.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
1.15 Off setting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
1.16 Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Set Top Boxes (STBs) on hand at the year-end are included in Capital Work in Progress. On installation, such devices are capitalized or treated as sale, as the case may be.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Stores & Spares which meet the definition of property plant and equipment and satisfy the recognition criteria of Ind AS 16 are capitalized as property, plant and equipment.
1.16.1 Depreciation on Property, plant and equipment
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on a straight-line basis over the useful lives as prescribed in Schedule II to the Act or as per technical assessment.
Depreciable amount for PPE is the cost of PPE less its estimated residual value. The useful life of PPE is the period over which PPE is expected to be available for use by the Company, or the number of production or similar units expected to be obtained from the asset by the Company.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
In case of Set Top Boxes (STBs) Company uses different useful lives than those prescribed in Schedule II to the Act. The useful lives have been assessed based on technical advice, taking into account the nature of the PPE and the estimated usage of the asset on the basis of managementâs best estimation of obtaining economic benefits from those classes of assets.
Such classes of assets and their estimated useful lives are as under:
Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of Projects from the date of commencement of commercial production. Depreciation on deductions/disposals is provided on a pro-rata basis up to the month preceding the month of deduction/disposal.
The estimated useful lives, residual values and depreciation method reviewed at the end of each reporting period, with regards to any changes in the accounting estimates on prospective basis.
1.17 Intangible Assets
1.17.1 Intangible Assets acquired separately
Intangible assets comprises of Cable Television Franchise, Non-Compete Franchise, Movie & Serial Rights, Goodwill and Software. Cable Television and Non- Compete Franchisee represents purchase consideration of a network that mainly attributable to acquisition of subscribers and other rights, permission etc. attached to a network.
The Intangible Assets with finite useful lives are carried at cost less accumulated amortization and impairment if any, and are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
1.17.2 Amortisation of intangible assets
The intangible assets are amortized on a straight line basis over their estimated useful lives as follows:
The estimated useful lives, residual values, amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
1.17.3 De-recognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.18 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.19 Provisions, Contingent liabilities and Contingent Assets
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions for restructuring are recognised by the company when it has developed a detailed formal plan for restructuring and has raised a valid expectation in those affected that the company will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
1.20 Retirement and other Employee benefits
1.20.1 Short-term obligations
Short term employee benefits are recognised as an expense at an undiscounted amount in the Statement of profit & loss of the year in which the related services are rendered.
a) Post-employment obligations
The Company operates the following post-employment schemes:
- defined benefit plans such as gratuity; and
- defined contribution plans such as provident fund.
Defined Benefit Plans
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined Contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions for provident fund as per the provisions of the Provident Fund Act, 1952 to the government. The Companyâs contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service. The companyâs obligation is limited to the amounts contributed by it.
1.20.2 Other long-term employee benefit obligations - Compensated Absences
The liabilities for leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
1.21 Earnings Per Share (EPS)
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.22 Rounding of amounts
All amounts disclosed in the financial statement and notes have been rounded off to the nearest millions, except where otherwise indicated.
Mar 31, 2017
1.1 Basis of preparation and presentation
The standalone financial statement comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules thereunder.
In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented reconciliation from the presentation of Standalone Financial Information under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (âPrevious GAAP or Indian GAAPâ) to Ind AS of Shareholdersâ equity as at March 31, 2016 and as at April 1, 2015 and of the Standalone Statement of profit and loss for the year ended March 31, 2016.
1.2 Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following
- certain financial assets and liabilities (including derivative instruments) measured at fair value;
- assets held for sale - measured at fair value less cost to sell;
- defined benefit plans - plan assets measured at fair value; and
1.3 Use of judgements, estimates & assumptions
While preparing financial statements in conformity with Ind AS, we make certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. We continually evaluate these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Ir particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as below:
- Assessment of functional currency
- Financial instruments;
- Useful lives of property, plant and equipment and intangible assets;
- Valuation of inventories;
- Measurement of recoverable amounts of cash-generating units;
- Assets and obligations relating to employee benefits;
- Provisions;
- Evaluation of recoverability of deferred tax assets; and
- Contingencies.
1.4 Foreign Currency Translation:
1.4.1 Functional and presentation currency
The Companyâs Standalone financial statements are prepared in Indian Rupees, which is also the Companyâs functional and presentation currency.
1.4.2 Transactions and balances Monetary items
Foreign currency transactions are recorded at the exchange rate prevailing at the date of transactions. Exchange difference arising on settlement of transactions is recognized as income or expense in the year in which they arise.
Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at the year-end rate and difference in translations and unrealised gains / (losses) on foreign currency transactions are recognised in the statement of profit & loss.
Non - Monetary items:
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
1.5 Revenue recognition
1.5.1 Revenue from Operations
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Subscription income includes subscription from Subscribers / Cable Operators relating to cable TV, Internet. Revenue from Operations in DAS notified area is recognized on accrual basis based on underlying subscription plan or agreements with the concerned subscribers / parties. Whereas, Subscription Income from Cable TV Operators in Non-DAS area, is accrued monthly based on number of connections declared by the said operators to the Company. In cases where revision of number of connections and / or rate is under negotiations at the time of recognition of revenue, the Company recognizes revenue as per invoice raised. Adjustments for the year, if any, arising on settlement is adjusted against the Revenue. Other cases are reviewed by the management periodically.
Activation fee, which in substance is an advance payment for future services or the ongoing services being provided are essential to the subscribers receiving the expected benefit of the upfront payment of activation fee. Accordingly revenue from activation fees shall be amortized over expected customer retention period.
Carriage / Placement income is recognized on accrual basis based on agreements with the concerned subscribers / parties on a monthly / yearly basis.)
Revenue from prepaid Internet Service plans, which are active at the end of accounting period, is recognized on time proportion basis. In other cases of Internet Service plans, entire revenue is recognized in the period of sale.
Advertisement income is recognised as per the terms of underlying agreements/arrangements with the concerned parties.
The Company collects service tax and entertainment tax on behalf of the government and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.
1.5.2 Other Revenues
Other Income comprises of profit received on sale of Set Top Boxes and fees received for Lease & Rent of Equipment, advertisement and consultancy services. Income from such services is recognized as per the terms of underlying agreements/arrangements with the concerned parties. Income from profit from set top box is arrived at by netting off the cost of purchases of set top boxes with its sale.
Other Operating Income comprises of fees for advertisement and consultancy services. Income from such services is recognized as per the terms of underlying agreements/arrangements with the concerned parties.
1.5.3 Interest Income
Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset.
1.5.4 Share of profit/loss from Joint Ventures / Partnership Firms
Share of Profit / Loss from Partnership Firms / Joint Ventures is accounted in respect of the financial year of the firm / venture, ending on or before the balance sheet date, on the basis of their audited accounts.
1.6 Income tax
1.6.1 Current Tax
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss.
1.6.2 Deferred tax
Deferred taxes are computed for all temporary differences between the accounting base and the tax base of assets and liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
1.7 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
1.7.1 As a lessee
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss or a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
1.7.2 As a lessor
Lease income from operating leases where the company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
Lease is recognized as finance lease or operating lease as per the definition and classification criteria. An important consideration in such determination is that land has indefinite economic life. Based on contractual & other arrangement, Land can either be classified as financial lease or operating lease.
1.8 Business combinations
Business combinations are accounted for using the acquisition method. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values.
Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interest method. Under pooling of interest method, the assets and liabilities of the combining entities are reflected at their carrying amounts, the only adjustments that are made are to harmonise accounting policies.
The acquisition method of accounting under Ind AS is used to account for business combinations by the Company from the date of transition tc Ind AS i.e. April 1, 2015. Prior to the date of transition to Ind AS, business acquisition has been accounted based on previous GAAP.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for noncontrolling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, ther the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
1.9 Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assets fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash generating units). Mon-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
1.10 Cash and cash equivalents
Cash and cash equivalents for the purposes of Cash Flow Statement comprise cash at bank, cash / cheques in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.11 Non-current assets held for sale and discontinued operations
Mon-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.
Mon-current assets are not depreciated or amortised while they are classified as held for sale. Mon-current assets classified as held for sale are presented separately from the other assets in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit and loss.
1.12 Investment in subsidiaries, joint ventures and associates
Subsidiaries are entities over which the company has control. The company controls an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
The Companyâs investments in its subsidiaries, joint ventures and associates are accounted at cost and reviewed for impairment at each reporting date.
1.13 Investments and other financial assets
1.13.1 Classification
The company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
1.13.2 Measurement
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
1.13.3 Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and other receivables.
Debt instruments included within the fair value through profit and loss (FVTPL) category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
1.13.4 Equity instruments
The company subsequently measures all equity investments at fair value. Where the companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the companyâs right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain/ (losses) in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
(i) Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(ii) De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
- the rights to receive cash flows from the asset have expired, or
- the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either:
a) the Company has transferred substantially all the risks and rewards of the asset, or
b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
1.14 Financial Liabilities, Derivatives and hedging activities:
1.14.1 Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans anc borrowings, payables, financial guarantee contracts or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
(ii) Subsequent measurement
All financial liabilities are subsequently measured at amortised cost using effective interest method or at FVTPL. The subsequent measurement of financial liabilities depends on their classification, as described below
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships and effective as defined by Ind-AS 109. Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities can be designated upon initial recognition at fair value through profit or only if such election so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ) as stated in Ind-AS 109. For non -held for trading liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI, unless such recognistion in OCI would create or enlarge an accounting mismatch in profit or loss, in which case these effects in credit risk are recognised in P &L. These gains/ loss are not subsequently transferred to P&L. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The company has not designated any financial liability as at fair value through profit and loss.
Financial guarantee contracts
Financial guarantee contracts issued by the company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortisation.
1.14.2 Derivative financial instruments and hedge accounting
(i) Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts, and interest rate swaps, to hedge its foreign currency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The purchase contracts that meet the definition of a derivative under Ind-AS 109 are recognised in the statement of profit and loss. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
(ii) De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
1.15 Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in Other Income.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
1.16 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
1.17 Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Set Top Boxes (STBs) and Internet Access devices on hand at the year-end are included in Capital Work in Progress. On installation, such devices are capitalized or treated as sale, as the case may be.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Stores & Spares which meet the definition of property plant and equipment and satisfy the recognition criteria of Ind AS 16 are capitalized as property, plant and equipment.
1.17.1 Depreciation on Property, plant and equipment
The depreciation on tangible fixed assets was provided using Straight Line Method at rates specified and in the manner prescribed by Schedule XIV to the Companies Act, 1956 upto 31st March, 2014 except for the Set top Boxes as mentioned below.
With effect from 1st April, 2014, Depreciation on tangible fixed assets is provided using the Straight Line Method based on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considered the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc
Depreciation on Set Top Boxes are provided under Straight Line Method over the estimated useful life of eight years as per technical evaluation.
In case of additions or deletions during the year, depreciation is computed from the month in which such assets are put to use and up to previous month of sale, disposal or held for sale as the case may be. In case of impairment, depreciation is provided on the revised carrying amount over its remaining useful life.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, wher there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
1.18 Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
1.19 Intangible Assets
1.19.1 Intangible Assets acquired separately
Intangible assets comprises of Cable Television Franchise, Movie & Serial Rights, Bandwidth Rights, Goodwill and Softwares. Cable Television Franchisee represents purchase consideration of a network that mainly attributable to acquisition of subscribers and other rights, permission etc. attached to a network.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
1.19.2 De-recognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.19.3 Amortisation of intangible assets
The intangible assets are amortized on a straight line basis over their expected useful lives as follows:
- Cable Television Franchise is amortized over a period of 5 to 20 years
- Softwares are amortized over the license period and in absence of such tenor, over five years.
The estimated useful lives, residual values, amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
1.20 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.21 Provisions, Contingent liabilities and Contingent Assets
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions for restructuring are recognised by the company when it has developed a detailed formal plan for restructuring and has raised a valid expectation in those affected that the company will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
1.22 Retirement and other Employee benefits
1.22.1 Short-term obligations
Short term employee benefits are recognised as an expense at an undiscounted amount in the Statement of profit & loss of the year ir which the related services are rendered.
a) Post-employment obligations
The Company operates the following post-employment schemes:
- defined benefit plans such as gratuity; and
- defined contribution plans such as provident fund.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions for provident fund and pension as per the provisions of the Provident Fund Act, 1952 to the government. The Companyâs contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service. The companyâs obligation is limited to the amounts contributed by it.
1.22.2 Other long-term employee benefit obligations
The liabilities for leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
1.23 Earnings Per Share (EPS)
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.24 Rounding of amounts
All amounts disclosed in the financial statement and notes have been rounded off to the nearest crores, except where otherwise indicated.
1.25 Reclassification
Previous yearâs figures have been reclassified / regrouped wherever necessary.
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