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Accounting Policies of Network18 Media & Investments Ltd. Company
Mar 31, 2025
1. CORPORATE INFORMATION
Network18 Media & Investments Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First floor, Empire Complex, 414 - Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Broadcasting, Digital Content, Print and Allied Businesses.
2. MATERIAL ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The standalone financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act,2013, (Ind AS Compliant Schedule III) as amended from time to time. The Company follow indirect method prescribed in Ind AS 7 - Statement of Cash Flows for presentation of its cash flows.
The Company''s standalone financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest crore ('' 00,00,000), except when otherwise indicated.
2.2 Summary of Material Accounting Policies
(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification considering an operating cycle of 12 months being the time elapsed between deployment of resources and the realisation in cash and cash equivalents there-against.
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any.
Projects under which assets are not ready for there intended use are shown as Capital Work in Progress.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Programming costs for all programme / documentaries are being amortised over 2 years from the date of purchase or produced.
Computer Softwares and Website costs are being amortised over its estimated useful life of 3 to 5 years. News archives is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
(e) Provisions and Contingent Liabilities
The Company exercises significant judgement in identification of and estimation of the amounts of provisions and contingent liabilities. These provisions and contingent liabilities are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates.
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurements of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
(g) Current Tax and Deferred Tax
The tax expense for the period comprises of current and deferred tax. The Company exercises
judgment in computation of current tax considering the relevant rulings and reassesses the carrying amount of deferred tax assets at the end of each reporting period.
(h) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of contents, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the
performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue.
Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A. Initial recognition and measurement (i) Financial Assets and Financial
Liabilities
All financial assets and liabilities are initially recognised and measured at fair value and in case of borrowings, net of directly attributable cost. Purchase and Sale of Financial Assets and Financial Liabilities are recognised using trade date accounting.
(i) Financial Assets
a) Measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
at fair value through other comprehensive income
A financial asset is measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All Other equity investments are measured at fair value, with value changes recognised in the Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income'' However, dividend on such equity investments are recognised in the Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
The Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime.
Financial liabilities are subsequently carried at amotised cost using the effective interest method other than those measured at Fair Value through Profit or Loss (FVTPL). For trade and other payables maturing within one year from the Balance Sheet
date, the carrying amounts are determined to approximate fair value due to the short maturity of these instruments.
(iii) Derivative financial instruments
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Any gains or losses arising from changes in the fair value of derivatives are taken to the Statement of Profit and Loss.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets
Estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management. Property, Plant and Equipment/ Other Intangible assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based
on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Determining the lease term
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
(c) Recoverability of trade receivables
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
(d) Provisions
The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(e) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash generating units (''CGU'') for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering recent transaction or independent valuer''s report. It is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used. The recoverable amount of CGU has been determined based on revenue multiples.
(f) Impairment of financial assets
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples and EBITDA multiples. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
(h) Deferred tax
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits 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 Company uses judgement to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
(i) Fair value measurement
For estimates relating to fair value of financial instruments (Refer Note 42)
Mar 31, 2024
2 MATERIAL ACCOUNTING POLICIES
2.1 Basis of Preparation and Presentation
The standalone financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act,2013, (Ind AS Compliant Schedule III) as amended from time to time. The Company follow indirect method prescribed in Ind AS 7 -Statement of Cash Flows for presentation of its cash flows.
The Company''s standalone financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated.
2.2 Summary of Material Accounting Policies
(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification considering an operating cycle of 12 months being the time elapsed between deployment of resources and the realisation in cash and cash equivalents there-against.
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any.
Projects under which assets are not ready for there intended use are shown as Capital Work in Progress.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
(c) Leases
The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term
(d) Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Programming costs for all programme / documentaries are being amortised over 2 years from the date of purchase or produced.
Computer Softwares and Website costs are being amortised over its estimated useful life of 3 to 5 years. News archives is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Mar 31, 2023
1 CORPORATE INFORMATION
Network18 Media & Investments Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First floor, Empire Complex, 414 - Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Digital Content, Print and Allied Businesses.
2 SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The standalone financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, as amended from time to time and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (?), which is its functional currency and all values are rounded to the nearest lakh (? 00,000), except when otherwise indicated.
2.2 Summary of Significant Accounting Policies(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of other intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Computer Softwares and Website costs are being amortised over its estimated useful life of 3 to 5 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis.
(g) Impairment of Non-Financial assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group of assets, called Cash Generating Unit (''CGU") may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions or independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(h) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
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.
Disclosure of contingent liability is made 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 embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Defined Benefit Plans
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services. Re-measurements of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits 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 income 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 income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(k) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of contents, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue.
I nvoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. However, trade receivables that do not contain a significant financing component are measured at transaction prices. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All Other equity investments are measured at fair value, with value changes recognised in the Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income! However, dividend on such equity investments are recognised in the Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL). Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
A. Initial recognition and measurement
All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derivative financial instruments
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Such derivative financial instrument are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently 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. Any gains or losses arising from changes in the fair value of derivatives are taken to the Statement of Profit and Loss.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
2.3 STANDARD ISSUED BUT NOT EFFECTIVE:
On 31st March, 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 1st April, 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.
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets
Property, Plant and Equipment/ Other Intangible assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Recoverability of trade receivables
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash -generating units (''CGU") for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering recent transaction, recent offer price and independent valuer''s report. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
I n assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
(e) Impairment of financial assets
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples and EBITDA multiples. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
For estimates relating to fair value of financial instruments refer Note 42.
Mar 31, 2022
1 CORPORATE INFORMATION
Network18 Media & Investments Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Digital Content, Print and Allied Businesses.
2 SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The standalone financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated.
2.2 Summary of Significant Accounting Policies
(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/Non-Current classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
(b) Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of other intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Computer Softwares and Website costs are being amortised over its estimated useful life of 3 to 5 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis.
(g) Impairment of Non-Financial assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group
of assets, called Cash Generating Unit (''CGU'') may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions, independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(h) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
I f 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.
Disclosure of contingent liability is made 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 embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during
which the benefit is expected to be derived from employees'' services.
Re-measurements of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits 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 income 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 income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(k) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of contents, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not
retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Contract balances
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue.
Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All Other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income. However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
A. Initial recognition and measurement
All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derivative financial instruments
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Such derivative financial instrument are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently 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. Any gains or losses arising from changes in the fair value of derivatives are taken to Statement of Profit and Loss.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the
Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
Not effective during the year:
On 23rd March, 2022, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2022. This notification has resulted into amendments in the following existing accounting standards from 1st April, 2022.
i. Ind AS 101 - First time adoption of Ind AS
ii. Ind AS 103 - Business Combination
iii. Ind AS 109 - Financial Instruments
iv. Ind AS 16 - Property, Plant and Equipment
v. Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets
vi. Ind AS 41 - Agriculture
Application of amendments to the above standards are not expected to have any significant impact on the Company''s standalone financial statements.
J CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets
Property, Plant and Equipment/ Other Intangible assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Recoverability of trade receivables
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification
of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash -generating units (''CGU'') for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering revenue multiples of comparable companies being key assumption based on published information and management assessment. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
(e) Impairment of financial assets
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples and EBITDA multiples. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
For estimates relating to fair value of financial instruments refer Note 42.
(h) Estimation uncertainty relating to the global health pandemic
The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. In assessing the recoverability of Company''s assets such as Goodwill, Financial Assets and Non-Financial Assets, the Company has considered internal and external information. The Company has evaluated impact of this pandemic on it''s business operations and based on it''s review and current indicators of future economic conditions, there is no significant impact on it''s standalone financial statements and the Company expects to recover the carrying amount of all it''s assets.
Mar 31, 2021
1 CORPORATE INFORMATION
Network18 Media & Investments Limited ("the Company") is a listed entity incorporated in India. The registered office of the Company is situated at First floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra. The Company is engaged in activities spanning across Digital Content, Print and Allied Businesses.
2 SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of Preparation and Presentation
The standalone financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The standalone financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, amended from time to time.
The Company''s standalone financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated.
2.2 Summary of Significant Accounting Policies(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification.
An asset is treated as Current when it is -
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when -
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset. The contract conveys the right
to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
Other Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably. Gains or losses arising from derecognition of other intangible assets are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company''s intangible assets comprises assets with finite useful life which are amortised on a straight-line basis over the period of their expected useful life.
Computer Softwares and Website costs are being amortised over its estimated useful life of 3 to 5 years.
The amortisation period and the amortisation method for Intangible Assets with a finite useful life are reviewed at each reporting date.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis.
(g) Impairment of Non-Financial assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Other Intangible assets or group of assets, called Cash Generating Unit (''CGU'') may be impaired. If any such indication exists, the recoverable amount of assets or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
Goodwill is allocated to each of the CGUs (or groups of CGUs) for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use; considering recent transactions, independent valuer''s report. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss other than goodwill, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(h) Provisions and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
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.
Disclosure of contingent liability is made 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 embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability as at the Balance Sheet date on the basis of actuarial valuation as per Projected Unit Credit Method.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurements of defined benefit plans in respect of post-employment benefits are charged to the Other Comprehensive Income.
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the Other Comprehensive Income. In which case, the tax is also recognised in Other Comprehensive Income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income tax authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits 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 income 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 income tax assets to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(k) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(l) Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.
Revenue from contracts with customers includes sale of goods and services. Revenue from rendering of services includes advertisement revenue, subscription revenue, revenue from sale of content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Revenue from rendering of services is recognised over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped. Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, net of returns and allowances, trade discounts and volume rebates and excluding amounts collected on behalf of third parties (for example taxes and duties collected on
behalf of the government). Consideration is generally due upon satisfaction of performance obligations and the receivable is recognized when it becomes unconditional.
Trade receivables represents the Company''s right to an amount of consideration that is unconditional. Revenues in excess of invoicing are considered as contract assets and disclosed as accrued revenue. Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised and disclosed as advances from customers.
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from Financial Assets is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement:
a) Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortisation is included in other income in the Statement of Profit and Loss.
b) Financial assets measured at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in subsidiaries, associates and joint ventures
The Company accounts for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any).
D. Other Equity investments:
All Other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''. However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company''s right to receive the amount is established.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. Further, the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. ECL impairment allowance is recognised in the Statement of Profit and Loss.
(ii) Financial Liabilities
A. Initial recognition and measurement All financial liabilities are recognized initially at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derivative financial instruments
The Company uses derivative financial instruments such as forwards, currency swaps and options to mitigate the risk of changes in exchange rates. Such derivative financial instrument are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently 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. Any gains or losses arising from changes in the fair value of derivatives are taken to Statement of Profit and Loss.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(n) Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand,
cash at banks, short-term deposits and short-term,
highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(o) Earnings per share
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
Effective during the year:
Amendment to Existing Standards
Application of the following amendment did not have any significant impact on the standalone financial statements of the Company.
i. Ind AS 103 - Business Combinations
ii. Ind AS 107 - Financial Instruments: Disclosures
iii. Ind AS 109 - Financial Instruments
iv. Ind AS 116 - Leases
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these judgements, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(a) Depreciation/ Amortisation and useful lives of Property, Plant and Equipment and Other Intangible Assets
Property, Plant and Equipment/ Other Intangible assets are depreciated/ amortised over their estimated useful lives, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates.
(b) Recoverability of trade receivables Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
(c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. Goodwill is allocated to cash -generating units (''CGU'') for the purposes of impairment testing. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use; considering recent transaction, recent offer price and independent valuer''s report. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows covering generally a period of five years are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Estimated future cash flows involve judgement and estimates relating to revenue growth rates, net profit margin and perpetual growth rates. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
(e) Impairment of financial assets
The impairment provisions for financial assets depending on their classification are based on assumptions about risk of default, expected cash loss rates, discounting rates applied to these forecasted future cash flows, revenue multiples, EBITDA multiples, recent transactions, recent offer price, independent valuer''s report and reorganisation of businesses. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
(f) Defined benefit plans
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, salary escalation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
(g) Determining the lease term
The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. It considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
For estimates relating to fair value of financial instruments refer Note 43.
(i) Estimation uncertainty relating to the global health pandemic
The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. In assessing the recoverability of Company''s assets such as Goodwill, Financial Assets and Non-Financial Assets, the Company has considered internal and external information. The Company has evaluated impact of this pandemic on it''s business operations and based on it''s review and current indicators of future economic conditions, there is no significant impact on it''s standalone financial statements and the Company expects to recover the carrying amount of all it''s assets.
Mar 31, 2018
A CORPORATE INFORMATION
Network18 Media & Investments Limited ("the Company") is a listed Company incorporated in India.
The registered office of the Company is situated at First Floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra.
The Company is engaged in the business of publishing, digital and mobile content and allied businesses.
B SIGNIFICANT ACCOUNTING POLICIES
B.1 Basis Of Preparation And Presentation
The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities, which have been measured at fair value amount.
The financial statements of the Company have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013.
These financial statements are the Company''s Ind AS standalone financial statements.
The Company''s financial statements are presented in Indian Rupees (''), which is its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated. "
B.2 Summary Of Significant Accounting Policies (a) Property, plant and equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(b) Intangible assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortization/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Computer software and Website costs are being amortized over its estimated useful life of 3 to 5 years.
(c) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets:
Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in the Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue.
(d) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
(e) Inventories
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis.
(f) Impairment of non-financial assets - property, plant and equipment and intangible assets:
The Company assesses at each reporting dates as to whether there is any indication that any property, plant and equipment and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any.
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(g) Provisions and Contingencies
Provisions are recognized when the Company has a present obligation as a result of a past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
I f 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 recognized as a finance cost.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.
(h) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.
Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability as at the Balance Sheet date on the basis of actuarial valuation.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plans
The Company pays gratuity to the employees who has completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days salary for the every completed year of service as per the Payment of Gratuity Act, 1972.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurement of defined benefit plans in respect of post-employment and other long term benefits are charged to the Other Comprehensive Income.
(i) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity.
i Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred income tax assets are reassessed at each reporting date and recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets are 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 income tax assets to be utilized.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(j) Share based payments
Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(k) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in the Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(l) Revenue recognition
Revenue from operations includes sale of goods and services. Sale of services includes advertisement revenue, subscription revenue, revenue from sponsorship of events, revenue from mobile short messaging, revenue from media related professional and consultancy services.
Sale of services is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government. Revenue from rendering of services is recognized when the performance of agreed contractual task has been completed.
Sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Revenue from sale of goods, is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.
Interest income
Interest Income from a financial asset is recognized using effective interest rate method.
Dividend income
Dividend income is recognized when the Company''s right to receive the payment has been established.
(m) Financial instruments
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting.
B. Subsequent measurement:
a) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate amortization is included in other income in the Statement of Profit and Loss.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are fair valued through profit or loss.
C. Investment in subsidiaries and associates
The Company accounts its investments in subsidiaries, associates and joint venture at cost.
D. Equity investments:
All equity investments are measured at fair value, with value changes recognized in Profit or Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit or loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables, Company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivable. Further, Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there
is significant increase in credit risk full lifetime ECL is used.
(ii) Financial Liabilities
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of loans net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
C CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:
The preparation of the Company''s financial statements requires management to make judgment, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
a) Depreciation and useful lives of Property, plant and equipment and Intangible assets:
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Intangible assets are amortized over its estimated useful lives. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortization to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortization for future periods is adjusted if there are significant changes from previous estimates.
b) Recoverability of trade receivable:
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
c) Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
d) Impairment of non-financial assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units ("CGU''s") fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
e) Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
f) Defined benefit plans:
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
D STANDARDS ISSUED BUT NOT EFFECTIVE:
On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.
i. Issue of Ind AS 115 - Revenue from Contracts with Customers:
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
Mar 31, 2017
A Corporate Information
Network18 Media and Investments Limited ("the Company") is a listed company incorporated in India. The address of its registered office situated at First Floor, Empire Complex, 414, Senapati Bapat Marg, Lower Parel, Mumbai - 400013, Maharashtra.
B Significant Accounting Policies B.1 Basis of Preparation and Presentation
The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount.
The financial statements of the Company have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.
Up to the year ended 31st March, 2016, the Company has prepared its financial statements in accordance with the requirement of Indian GAAP, which includes Standards specified under section 133 of the Companies Act, 2013 ("the Act") read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended) .
These financial statements are the Company''s first Ind AS financial statements.
Company''s financial statements are presented in Indian Rupees (Rs,), which is its functional currency.
B.2 Summary of Significant Accounting Policies
(a) Property, plant and equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and arrangements arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow the entity and the cost can be measured reliably.
Depreciation on property, plant and equipment is provided using straight line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(b) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Lease assets: Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the less or is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
(c) Intangible assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount, rebates less accumulated amortization and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Computer Software, Brand/ Trademarks and website costs are being amortized over its estimated useful life of 3 to 5 years.
(d) Borrowings cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
(e) Inventories
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis.
(f) Impairment of non-financial assets - property, plant and equipment and intangible assets
The Company assesses at each reporting dates as to whether there is any indication that any property, plant and equipment and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any.
An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.''
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(g) Provisions and contingencies
Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.
(h) Employee benefits
(i) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.
(ii) Long term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability as at the Balance Sheet date on the basis of actuarial valuation.
(iii) Post-employment benefits Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit plans
The Company pays gratuity to the employees whoever has completed 5 years of service with the Company at the time of resignation / superannuation. The gratuity is paid @ 15 days salary for the every completed year of service as per the Payment of Gratuity Act.
The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurement of defined benefit plans in respect of post-employment and other long term benefits are charged to the Other Comprehensive Income.
(i) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit or Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity.
i Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(j) Share based compensation
Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(k) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit or Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(l) Revenue recognition
Revenue from sale of goods, is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.
Revenue from rendering of services is recognized when the performance of agreed contractual task been completed.
Revenue from operations includes sale of goods and services measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government.
Sale of services includes advertisement revenue, subscription revenue, revenue from sponsorship of events, revenue from mobile short messaging and other related services.
Interest Income
Interest Income from a financial asset is recognized using effective interest rate method.
Dividends
Dividend income is recognized when the Company''s right to receive the payment has been established.
(m) Financial instruments I Financial Assets
i. Initial recognition and measurement:
All financial assets are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting.
ii. Subsequent measurement:
a) Financial assets carried at amortized cost (AC)
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are fair valued through profit or loss.
iii. Equity investments:
All equity investments are measured at fair value, with value changes recognized in Statement of
Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''.
iv. Investment in subsidiaries, associates and joint ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost.
v. Impairment of financial assets
In accordance with Ind AS 109, the Company use ''Expected Credit Loss'' (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables Company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivable. Further the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analyzed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
II Financial Liabilities
i. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in profit or loss as finance cost.
ii. Subsequent measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
C Critical accounting judgments and key sources of estimation uncertainty:
The preparation of the Company''s financial statements requires management to make judgment, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
a) Depreciation and useful lives of property, plant and Equipment and intangible assets:
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Intangible assets are amortized over its estimated useful lives. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortization to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortization for future periods is adjusted if there are significant changes from previous estimates.
b) Recoverability of trade receivable:
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether
a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
c) Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
D First time adoption of Ind AS:
The Company has adopted Ind AS with effect from 1st April, 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the opening
Reserves as at 1st April, 2015 and all the periods presented have been restated accordingly.
Exemptions from retrospective application:
i) Share-based payment transactions
Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the later of the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to awards that vested prior to 1st April, 2015.
ii) Fair value as deemed cost exemption:
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at deemed cost at the transition date.
iii) Investments in subsidiaries, joint ventures and associates
The Company has elected to measure investment in subsidiaries, joint venture and associate at cost and consider the previous GAAP carrying value as at the date of transition as deemed cost.
*During the year ended 31st March, 2011, Roptonal Limited, Cyprus (''Roptonal'') a subsidiary of the Company''s jointly controlled entity, Viacom18 Media Private Limited made a public offer for purchase of entire issued capital of The Indian Film Company Limited, Guernsey (''TIFC''). The Company and its subsidiary, Network18 Holdings Limited, Mauritius (''Network18 Holdings''), in their capacity as shareholders in TIFC accepted the public offer. Further, pursuant to an agreement between Roptonal and Network18 Holdings, Network18 Holdings has agreed to indemnify Roptonal against the amount, if any, by which the net cash generated by TIFC from its existing film library in respect of the period from the date on which the aforementioned public offer becomes unconditional up to 21st July, 2014 is less than the net asset value of the film library as per the TIFC''s therein mentioned accounts for the year ended 31st March, 2010.
Network18 Holdings has also agreed to indemnify Roptonal against certain Indian tax liabilities that may potentially arise in TIFC or Roptonal in respect of certain withholding tax recoveries stated in TIFC''s financial statements and other taxes relating to the sale of Network18 Holding''s shares in TIFC. The aforementioned agreement further provided that if Network18 Holding does not undertake the indemnity obligations agreed in the agreement, the indemnity shall be provided by the Company.
During the previous years, based on the assessment of estimated cash flow of the indemnified assets, the Company has estimated the liability as Rs, 21,726.20 Lakh.
figures in brackets represents figures for previous year 15-16 figures in brackets represents figures for previous year 14-15 Note:
Mar 31, 2016
1. Basis of preparation
The financial statements have been prepared under historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India and to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (the âAct'') read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). The accounting policies have been consistently applied by Network18 Media & Investments Limited (the âCompany'').
1.1 Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in India (âIndian GAAP'') requires judgments, estimates and assumptions to be made that effect the reported amount of assets and liabilities, disclosure of contingent liabilities and the reported amount of income and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known / materialize.
b. Revenue recognition
i. Advertising and sponsorship revenue from websites is recognized proportionately over the contractual period of advertisement, commencing when the advertisement is placed on the website, unless the Company has to meet performance conditions in which case revenue is recognized using the proportionate completion method. Advertising revenue from magazines is recognized in the period in which the magazines are delivered and are accounted net of commission and discounts. Revenue from sponsorships of event is recognized after the completion of event.
ii. Revenue from mobile short messaging and other related services are recognized based on usage of services by the mobile subscribers and share of revenue agreed with the mobile network operators.
iii. Sale of magazines includes revenue from circulation of magazines and subscription of magazines. Revenue from circulation of magazines includes sales to retail outlets/ newsstands, which are subject to returns. The Company records these retail sales upon delivery, net of estimated returns. These estimated returns are based on historical return rates and are revised as necessary based on actual returns. Revenue from subscription of magazines is recognized on delivery of magazines to subscribers.
iv. Transactions that involve the exchange of goods or services for other goods or services in respect of web operations are accounted for in accordance with Guidance Note on Accounting for Dot-com Companies issued by the Institute of Chartered Accountants of India (ICAI). Barter transactions are recorded at fair value, being the value at which similar transactions are executed with other parties.
v. Revenue from sale of stalls at exhibitions organized by the Company is recognized after completion of exhibition.
vi. Business support service income is recognized after rendering of services.
vii. Dividend income is accounted for when the right to receive dividend is established.
viii. Profit / loss on sale of investments are computed on the basis of weighted average cost on date of disposal of investments.
ix. Interest income is recognized on time proportionate basis, taking into account the amount outstanding and the rate applicable.
c. Fixed assets Tangible assets
Tangible assets are stated at their original cost of acquisition and installation less accumulated depreciation and accumulated impairment, if any. All direct expenses attributable to acquisition and installation of assets are capitalized.
Intangible assets
Acquired brands/domain names and computer software are capitalized at cost of acquisition and disclosed as intangible assets and are stated at their original cost less accumulated amortization and accumulated impairment, if any.
Website development costs that provide additional functions or features to the Company''s website are capitalized. Maintenance expenses or costs that do not result in new features or functions are expensed as incurred.
d. Depreciation / amortization
Depreciation on fixed assets is provided on straight-line basis as per Schedule II of the Act. Intangible assets are amortized on a straight line basis over the estimated useful economic life.
e. Inventory
Inventory is valued as follows:
Raw materials: Lower of cost and net realizable value. Cost of raw materials consists of purchase cost and non-convictable taxes. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
Work-in-progress and finished goods: Lower of cost and net realizable value. Cost includes direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
f. Impairment of tangible and intangible assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is revered if there has been a change in the estimate of recoverable amount.
g. Investments
Current investments are carried at lower of cost and quoted / fair value. Long-term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
h. Leases Operating lease
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis, over the lease term.
i. Employee benefits Provident Fund
The Company''s Employees Provident Fund scheme is a defined contribution plan. The Companyâs contribution to the Employees'' Provident Fund is charged to the Statement of Profit and Loss during the period in which the employee renders the related service.
Gratuity
The Company provides for gratuity, a post-employment defined benefit plan covering eligible employees.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the projected unit credit method performed by an independent actuarial, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation is based on the market yields on government securities as at the balance sheet date. Actuarial gains/losses are recognized immediately in the Statement of Profit and Loss. Gain and loss on curtailment or settlement are recognized when the curtailment or settlement occurs.
Compensated absences
Benefits comprising long term compensated absences constitute other long term employee benefits. The liability for compensated absences is determined using the Projected Unit Credit Method, on the basis of an actuarial valuation performed by an independent actuarial at the period end. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss. Gain and loss on curtailment or settlement are recognized when the curtailment or settlement occurs.
Short-term employee benefits
Short term employee benefits expected to be paid or payable in exchange for the services rendered is recognized on undiscounted basis.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences on foreign exchange transactions settled during the period are recognized in the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the balance sheet date are translated at the exchange rate prevailing on that date and resulting exchange differences are recognized in the Statement of Profit and Loss.
k. Income tax
Tax expense comprises current tax and deferred tax. Current tax is determined in accordance with the provisions of Income Tax Act, 1961.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situation, where the Company has unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
l. Employee stock options plan
Accounting value of stock options is determined on the basis of âIntrinsic Valueâ representing the excess of the market price on the date of grant over the exercise price of the options granted under the âEmployees Stock Option Schemeâ of the Company, and is being amortized as âDeferred employee compensationâ on a straight-line basis over the vesting period in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and Guidance Note 18 âShare Based Paymentsâ issued by the Institute of Chartered Accountants of India.
m. Provisions and contingencies
Provisions are recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.
Contingent assets are neither recognized nor disclosed in the financial statements.
n. Borrowing costs
Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset when it is probable that they will result in future economic benefits to the Company and the costs can be measured reliably.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
o. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
p. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
b Description of the rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having face value of '' 5 per share. All the existing equity shares rank pari passu in all respects including but not limited to entitlement for dividend, bonus issue and rights issue. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Security details tor borrowings outstanding as at 31 March 2016
a. Bank overdraft from ICICI Bank secured by first pari passu charge on all the current assets and movable fixed assets of the Company (both present and future). The same is repayable as per the terms agreed with the bank.
b. Bank overdraft from Yes Bank is secured by first pari passu charge on all the current assets and movable fixed assets of the Company (both present and future). The same is repayable as per the terms agreed with the bank.
c. Loans from related parties are repayable within one year.
d. Commercial papers are repayable within two months.
During the year ended 31 March 2011, Roptonal Limited, Cyprus (âRoptonal'') a subsidiary of the Company''s jointly controlled entity, Viacom18 Media Private Limited made a public offer for purchase of entire issued capital of The Indian Film Company Limited, Guernsey (âTIFC''). The Company and its subsidiary, Network18 Holdings Limited, Mauritius (âNetwork18 Holdings''), in their capacity as shareholders in TIFC accepted the public offer. Further, pursuant to an agreement between Roptonal and Network18 Holdings, Network18 Holdings has agreed to indemnify Roptonal against the amount, if any, by which the net cash generated by TIFC from its existing film library in respect of the period from the date on which the aforementioned public offer becomes unconditional up to 21 July 2014 is less than the net asset value of the film library as per the TIFC''s therein mentioned accounts for the year ended 31 March 2010.
Network18 Holdings has also agreed to indemnify Roptonal against certain Indian tax liabilities that may potentially arise in TIFC or Roptonal in respect of certain withholding tax recoveries stated in TIFCâs financial statements and other taxes relating to the sale of Network18 Holdingâs shares in TIFC. The aforementioned agreement further provided that if Network18 Holding does not undertake the indemnity obligations agreed in the agreement, the indemnity shall be provided by the Company.
During the previous years, based on the assessment of estimated cash flow of the indemnified assets, the Company has estimated the liability as '' 21,726.20 lakhs.
(a) Pursuant to the enactment of the Companies Act, 2013 (the âActâ), the Company had, effective from 1 April 2014, reassessed the useful life of its fixed assets and had computed depreciation and amortization with reference to the useful life of assets as recommended in Schedule II of the Act. Consequently, depreciation and amortization for the year ended 31 March 2015 was lower byRs, 53.19 lakhs and net profit was higher by Rs, 53.19 lakhs. Further, based on the transitional provision provided in Schedule II, an amount of Rs, 64.01 lakhs was adjusted with the opening reserves during the year ended 31 March 2015.
(b) The charge for the year ended 31 March 2015 amounting to Rs, 302.62 lakhs and Rs, 196.87 lakhs inter-alia towards tangible and intangible assets respectively, included an amount of Rs, 54.01 lakhs which was included under exceptional item owing to obsolescence/impairment (accelerated depreciation and amortization).
Estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Defined contribution plan
The Company has contributed Rs, 205.07 lakhs (previous year Rs, 216.66 lakhs) to Contribution to provident fund and employees'' state insurance.
Other long term employee benefits
The Company, along with its subsidiary company, TV18 Broadcast Limited, has jointly established an Employee Welfare Plan dated 2 February 2009 for the benefit of their existing and future employees and to administer the same, a Trust named Network18 Group Senior Professional Welfare Trust has been constituted under the Indian Trusts Act, 1881 vide Trust Deed dated 19 February 2009.
The Employee Welfare Plan provides that any accretion to the corpus of the Trust (like dividends, profit on sale of investments, interest income, etc.) will be utilized for the benefit of beneficiaries upon occurrence of certain specific events. It further provides that the amount of benefit to be provided out of such accretion will be at the discretion of the trustees.
During the year ended 31 March 2016 and 31 March 2015, there were no net accretions to the corpus of the aforementioned Trust and accordingly no liability or plan assets have been provided/ recognized in these financial statements.
Mar 31, 2015
1. Basis of preparation
The financial statements have been prepared under historical cost
convention, on accrual basis, in accordance with the generally accepted
accounting principles in India and to comply with the Accounting
Standards specified under Section 133 of the Companies Act, 2013(the
'Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 (as
amended). The accounting policies have been consistently applied by
Network18 Media & Investments Limited the ('Company').
1.1 Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires judgments, estimates and assumptions to be made that effect
the reported amount of assets and liabilities, disclosure of contingent
liabilities and the reported amount of income and expenses during the
year. Difference between the actual results and estimates are
recognized in the period in which the results are known / materialise.
b. Revenue recognition
i. Advertising and sponsorship revenue from websites is recognized
proportionately over the contractual period of advertisement,
commencing when the advertisement is placed on the website, unless the
Company has to meet performance conditions in which case revenue is
recognized using the proportionate completion method. Advertising
revenue from magazines is recognized in the period in which the
magazines are delivered and are accounted net of commission and
discounts. Revenue from sponsorships of event is recognized after the
completion of event.
ii. Revenue from mobile short messaging and other related services are
recognized based on usage of services by the mobile subscribers and
share of revenue agreed with the mobile network operators.
iii. Sale of magazines includes revenue from circulation of magazines
and subscription of magazines. Revenue from circulation of magazines
includes sales to retail outlets/ newsstands, which are subject to
returns. The Company records these retail sales upon delivery, net of
estimated returns. These estimated returns are based on historical
return rates and are revised as necessary based on actual returns.
Revenue from subscription of magazines is recognized on delivery of
magazines to subscribers.
iv. Transactions that involve the exchange of goods or services for
other goods or services in respect of web operations are accounted for
in accordance with Guidance Note on Accounting for Dot-com Companies
issued by the Institute of Chartered Accountants of India (ICAI).
Barter transactions are recorded at fair value, being the value at
which similar transactions are executed with other parties.
v. Revenue from travel and tour services is recognized after rendering
of services as per the terms of the contract.
vi. Revenue from sale of stalls at exhibitions organized by the
Company is recognized after completion of exhibition.
vii. Business support service income is recognized after rendering of
services.
viii. Dividend income is accounted for when the right to receive
dividend is established.
ix. Profit / loss on sale of investments are computed on the basis of
weighted average cost on date of disposal of investments.
x. Interest income is recognized on time proportionate basis, taking
into account the amount outstanding and the rate applicable.
c. Fixed assets
Tangible assets
Tangible assets are stated at their original cost of acquisition and
installation less accumulated depreciation. All direct expenses
attributable to acquisition and installation of assets are capitalised.
Intangible assets
Acquired brands/domain names and computer software are capitalised at
cost of acquisition and disclosed as intangible assets.
Website development costs that provide additional functions or features
to the Company's website are capitalised. Maintenance expenses or
costs that do not result in new features or functions are expensed as
incurred.
d. Depreciation / Amortisation
Depreciation on fixed assets is provided on straight line basis as per
Schedule II of the 2013 Act.
e. Inventory
Inventory is valued as follows:
Raw materials: Lower of cost and net realizable value. However,
materials and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Work-in-progress and finished goods: Lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. Cost is
determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
f. Impairment of tangible and intangible assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of Profit and Loss in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
revered if there has been a change in the estimate of recoverable
amount.
g. Investments
Current investments are carried at lower of cost and quoted / fair
value. Long term investments are stated at cost. Provision for
diminution in the value of long term investments is made only if such a
decline is other than temporary.
h. Leases
Operating lease
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis, over the
lease term.
i. Employee benefits
Provident Fund
The Company's Employees Provident Fund scheme is a defined contribution
plan. The Company's contribution to the Employees' Provident Fund is
charged to the Statement of Profit and Loss during the period in which
the employee renders the related service.
Gratuity
The Company provides for gratuity, a post employment defined benefit
plan covering eligible employees.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method performed by an independent, which recognises each period of
service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation. The obligation is measured at the present value of the
estimated future cash flows. The discount rate used for determining the
present value of the obligation is based on the market yields on
government securities as at the balance sheet date. Actuarial
gains/losses are recognized immediately in the Statement of profit and
loss. Gain and loss on curtailment or settlement are recognized when
the curtailment or settlement occurs.
Compensated absences
Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation performed by an independent valuer at the period
end. Actuarial gains and losses are recognised immediately in the
Statement of profit and loss. Gain and loss on curtailment or
settlement are recognized when the curtailment or settlement occurs.
Short term employee benefits
Short term employee benefits expected to be paid or payable in exchange
for the services rendered is recognised on undiscounted basis.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the period are recognized
in the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing on
that date and resulting exchange differences are recognized in the
Statement of profit and loss.
k. Income tax
Income tax expense comprises current tax and deferred tax. Current tax
is determined in accordance with the provisions of Income Tax Act,
1961.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situation,
where the Company has unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized
against future taxable profits.
l. Employee stock options plan
Accounting value of stock options is determined on the basis of
"Intrinsic Value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employees Stock Option Scheme" of the Company, and is being amortised
as "Deferred employee compensation" on a straight-line basis over the
vesting period in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines and Guidance Note 18 "Share Based Payments" issued by the
Institute of Chartered Accountants of India.
m. Provisions and contingencies
Provision recognised in the accounts when there is a present obligation
as a result of past event(s) and it is probable that an outflow of
resources will be required to settle the obligation and a reliable
estimate can be made. Provisions are not discounted to their present
value and are determined based on the best estimate required to settle
the obligation at the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow
of resources is remote.
Contingent assets are neither recognised nor disclosed in the financial
statements.
n. Borrowing costs
Borrowing costs that are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the Company and the costs can be
measured reliably.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
Mar 31, 2014
1.1 Background
Network18 Media & Investments Limited ("the Company") was incorporated
as SGA Finance and Management Services Private Limited on February 16,
1996. The name was changed to Network 18 Fincap Private Limited on
April 12, 2006. The Company was converted into a public company on 20
October 2006. The name was further changed to its current name on 1
December 2007.
1.2 Scheme of arrangement
The Board of Directors of the Company, on 7 July 2010, announced and
approved another Scheme of Arrangement (''the Infomedia Scheme'') between
Infomedia Press Limited (formerly Infomedia 18 Limited ("Infomedia
18")) and the Company and their respective shareholders and creditors.
As per the Infomedia Scheme, the Business Directories business, the New
Media business and the Publishing business of Infomedia18 have demerged
into the Company while the Printing Press business of Infomedia which
was eventually closed remained with Infomedia. The Infomedia Scheme was
approved by the Hon''ble High Court of Delhi on 22 May 2012 and made
effective on 1 June 2012 with an appointed date of 1 April 2010.
Further, in consideration of the demerger of the Business Directories
business, the New Media business and the Publishing business of
Infomedia18 into the Company, on 19 June 2012, the Company had issued
3,679,356 equity shares to the shareholders of Infomedia18 (in the
ratio of 14 equity shares of Rs. 5 for every 100 equity shares in
Infomedia 18 of Rs. 10), The demerged undertaking of Infomedia 18 was
engaged in publication of Yellow Pages (Business Directories), special
interest magazines and operating certain websites.
2. Basis of preparation
The financial statements have been prepared under historical cost
convention, on accrual basis, in accordance with the generally accepted
accounting principles in India and to comply with the Accounting
standards prescribed in the Companies (Accounting standards) Rules,
2006 notified under the Companies Act, 1956 read with the General
Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013 and the
relevant provisions of the Companies Act, 1956 ("the Act"). The
accounting policies have been consistently applied by the Company.
2.1 Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP)
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities as at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
Any revision to accounting estimates is recognized prospectively in the
current and future periods.
b. Revenue recognition
(i) Advertising and sponsorship revenue from websites is recognized
ratably over the contractual period of advertisement, commencing when
the advertisement is placed on the website, unless the Company has to
meet performance conditions in which case revenue is recognized using
the proportionate completion method. Advertising revenue from magazines
is recognized in the period in which the magazines are delivered and
are accounted net of commission and discounts. Revenue from
sponsorships of event is recognized after the completion of event.
(ii) Revenue from mobile short messaging and other related services are
recognized based on usage of services by the mobile subscribers and
share of revenue agreed with the mobile network operators.
(iii) Sale of magazines includes revenue from circulation of magazines
and subscription of magazines. Revenue from circulation of magazines
includes sales to retail outlets/ newsstands, which are subject to
returns. The Company records these retail sales upon delivery, net of
estimated returns. These estimated returns are based on historical
return rates and are revised as necessary based on actual returns.
Revenue from subscription of magazines is recognized on delivery of
magazines to subscribers.
(iv) Transactions that involve the exchange of goods or services for
other goods or services in respect of web operations are accounted for
in accordance with Guidance Note on Accounting for Dot-com Companies
issued by the Institute of Chartered Accountants of India (ICAI).
Barter transactions are recorded at fair value, being the value at
which similar transactions are executed with other parties.
(v) Revenue from travel and tour services is recognized after rendering
of services as per the terms of the contract.
(vi) Revenue from sale of stalls at exhibitions organized by the
Company is recognized after completion of exhibition.
(vii) Business support service income is recognized after rendering of
services.
(viii) Dividend income is accounted for when the right to receive
dividend is established.
(ix) Profit / loss on sale of investments are computed on the basis of
weighted average cost on date of disposal of investments.
(x) Interest income is recognized on time proportionate basis, taking
into account the amount outstanding and the rate applicable.
c. Fixed assets Tangible assets
Fixed assets are stated at their original cost of acquisition and
installation less accumulated depreciation. All direct expenses
attributable to acquisition and installation of assets are capitalised.
Intangible assets
Acquired brands/domain names and computer software are capitalised at
cost of acquisition and disclosed as intangible assets.
Website development costs that provide additional functions or features
to the Company''s website are capitalised. Maintenance expenses or costs
that do not result in new features or functions are expensed as
incurred.
d. Depreciation / amortisation
Depreciation /amortisation on fixed assets is calculated on straight
line basis using the rates arrived at based on the useful lives
estimated by management. The Company has used following useful lives
for the fixed assets:
Asset category Useful life
Building 30 years
Ownership flats 62 years
Plant and equipment 2-21 years
Furniture and fixtures 2-16 years
Vehicles 3-11 years
Information technology
and related equipment 2-7 years
Intangible assets:
*Brands/ trademarks 5 years
*Website costs 2-5 years
*Computer software 3-5 years
Leasehold improvements Over the lease period or estimated
whichever is shorter. useful life,
e. Inventory
Inventory is valued as follows:
Raw materials: Lower of cost and net realizable value. However,
materials and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Work-in-progress and finished goods: Lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. Cost is
determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
f. Impairment of tangible and intangible assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and the same is accordingly reversed in the statement
of profit and loss.
g. Investments
Investments which are readily realizable and intended to be held for
not more than a year from the date on which investment made are
classified as current investments. All other investments are classified
as long-term investments.
Current investments are stated at lower of cost or fair value.
Long-term investments are stated at cost however provision for
diminution in their value is made to recognize a decline, other than
temporary value of investment.
Profit/ loss on sale of investments are computed with reference to the
average cost of the investment.
h. Leases Operating lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
i. Employee benefits Provident Fund
The Company''s Employees Provident Fund scheme is a defined contribution
plan. The Company''s contribution to the Employees'' Provident Fund is
charged to the Statement of Profit and Loss during the period in which
the employee renders the related service.
Gratuity
The Company provides for gratuity, a defined benefit plan covering
eligible employees.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognized immediately in the
Statement of profit and loss. Gain and loss on curtailment or
settlement are recognized when the curtailment or settlement occurs.
Compensated absences
Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the period end. Actuarial gains and losses are
recognized immediately in the Statement of profit and loss. Gain and
loss on curtailment or settlement are recognized when the curtailment
or settlement occurs.
Short term employee benefits
Short term employee benefits expected to be paid or payable in exchange
for the services rendered is recognized on undiscounted basis.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the period are recognized
in the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing on
that date and resulting exchange differences are recognized in the
Statement of profit and loss.
k. Income tax
Income tax expense comprises current tax and deferred tax. Current tax
is determined in accordance with the provisions of Income Tax Act,
1961.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situation,
where the company has unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized
against future taxable profits.
l. Earnings/ (loss) per Share
The Company reports basic and diluted earnings/ (loss) per share in
accordance with Accounting Standard 20 on Earnings per Share. Basic
earnings/ (loss) per equity share have been computed by dividing the
Net Profit / (Loss) after tax by the weighted average number of equity
shares outstanding during the period. Diluted earnings / (loss) per
share is computed using the weighted average number of equity shares
and dilutive potential equity shares outstanding during the period
except where the result would be anti-dilutive.
m. Employee stock options plan
Accounting value of stock options is determined on the basis of
"Intrinsic Value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employees Stock Option Scheme" of the Company, and is being amortized
as "Deferred employee compensation" on a straight- line basis over the
vesting period in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 and Guidance Note 18 "Share Based Payments" issued by
the ICAI.
n. Provisions and contingencies
The Company makes provision when there is a present obligation as a
result of a past event where the outflow of economic resources is
probable and a reliable estimate of the amount of obligation can be
made.
A disclosure is made for a contingent liability when there is a:
* Possible obligation, the existence of which will be confirmed by the
occurrence/non-occurrence of one or more uncertain events, not fully
with in the control of the Company; or
* Present obligation, where it is not probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation; or
* Present obligation, where a reliable estimate cannot be made. o.
o.Borrowing costs
Borrowing costs that are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the Company and the costs can be
measured reliably.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
p. Segment reporting
Identification of segments:
The Company''s operating businesses are organized and managed separately
according to the nature of services provided, with each segment
representing a strategic business unit that serves different markets.
The Company operates only in India and accordingly there are no
geographical segments.
Intersegment transfers:
Inter segment revenues have been accounted for based on the transaction
price agreed to between segments which is primarily market led.
Allocation of costs:
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Revenues and expenses, which relate to the Company as a whole and are
not allocable to segments on a reasonable basis are presented as
"Unallocable" in the segment disclosure.
Mar 31, 2013
A. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
b. Revenue recognition
(i) Advertising and sponsorship revenue from websites is recognized
ratably over the contractual period of advertisement, commencing when
the advertisement is placed on the website, unless the Company has to
meet performance conditions in which case revenue is recognized using
the proportionate completion method. Advertising revenue from magazines
is recognized in the period in which the magazines are delivered and
are accounted net of commission and discounts. Revenue from
sponsorships of event is recognized after the completion of event.
(ii) Revenue from wireless short messaging service is recognized based
on usage of service by the mobile subscribers and share of revenue
agreed with the mobile network operator.
(iii) Sale of magazines includes revenue from circulation of magazines
and subscription of magazines. Revenue from circulation of magazines
includes sales to retail outlets/ newsstands, which are subject to
returns. The Company records these retail sales upon delivery, net of
estimated returns. These estimated returns are based on historical
return rates and are revised as necessary based on actual returns.
Revenue from subscription of magazines is recognized on delivery of
magazines to subscribers.
(iv) Transactions that involve the exchange of goods or services for
other goods or services in respect of web operations are accounted for
in accordance with Guidance Note on Accounting for Dot-com Companies
issued by the Institute of Chartered Accountants of India (ICAI).
Barter transactions are recorded at fair value, being the value at
which similar transactions are executed with other parties.
(v) Revenue from travel and tour services is recognized after rendering
of services as per the terms of the contract.
(vi) Revenue from sale of stalls at exhibitions organized by the
Company is recognized after completion of exhibition.
(vii) Dividend income is accounted for when the right to receive
dividend is established.
(viii) Profit / loss on sale of investments are computed on the basis
of weighted average cost on date of disposal of investments.
(ix) Interest income is recognized on time proportionate basis, taking
into account the amount outstanding and the rate applicable.
c. Fixed assets Tangible assets
Fixed assets are stated at their original cost of acquisition and
installation less accumulated depreciation. All direct expenses
attributable to acquisition and installation of assets are capitalised.
Intangible assets
Acquired brands/domain names and computer software are capitalised at
cost of acquisition and disclosed as intangible assets.
Website development costs that provide additional functions or features
to the Company''s website are capitalised. Maintenance expenses or costs
that do not result in new features or functions are expensed as
incurred.
d. Depreciation / amortisation
Depreciation /amortisation on fixed assets is calculated on straight
line basis using the rates arrived at based on the useful lives
estimated by management. The Company has used following useful lives
for the fixed assets:
e. Inventory
Inventory is valued as follows:
Raw materials: Lower of cost and net realizable value. However,
materials and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis. Work-in-progress and finished
goods: Lower of cost and net realizable value. Cost includes direct
materials and labour and a proportion of manufacturing overheads based
on normal operating capacity. Cost is determined on weighted average
basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
f. Impairment of tangible and intangible assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and the same is accordingly reversed in the statement
of profit and loss.
g. Investments
Investments which are readily realizable and intended to be held for
not more than a year from the date on which investment made are
classified as current investments. All other investments are classified
as long- term investments.
Current investments are stated at lower of cost or fair value.
Long-term investments are stated at cost however provision for
diminution in their value is made to recognize a decline, other than
temporary value of investment.
Profit/ loss on sale of investments are computed with reference to the
average cost of the investment
h. Leases Operating lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
i. Employee benefits Provident Fund
The Company''s Employees Provident Fund scheme is a defined contribution
plan. The Company''s contribution to the Employees'' Provident Fund is
charged to the Statement of Profit and Loss during the period in which
the employee renders the related service.
Gratuity
The Company provides for gratuity, a defined benefit plan covering
eligible employees.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognized immediately in the
Statement of profit and loss.
Compensated absences
Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the period end. Actuarial gains and losses are
recognized immediately in the Statement of profit and loss.
Short term employee benefits
Short term employee benefits expected to be paid or payable in exchange
for the services rendered is recognized on undiscounted basis.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the period are recognized
in the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing on
that date and resulting exchange differences are recognized in the
Statement of profit and loss.
k. Income tax
Income tax expense comprises current tax and deferred tax. Current tax
is determined in accordance with the provisions of Income Tax Act,
1961.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situation,
where the company has unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized
against future taxable profits.
l. Earnings/ (loss) per Share
The Company reports basic and diluted earnings/ (loss) per share in
accordance with Accounting Standard 20 on Earnings per Share. Basic
earnings/ (loss) per equity share have been computed by dividing the
Net Profit /(Loss) after tax by the weighted average number of equity
shares outstanding during the period. Diluted earning / (loss) per
share is computed using the weighted average number of equity shares
and dilutive potential equity shares outstanding during the period
except where the result would be anti-dilutive.
m. Employee stock options plan
Accounting value of stock options is determined on the basis of
"Intrinsic Value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employees Stock Option Scheme" of the Company, and is being
amortized as "Deferred employee compensation" on a straight-line
basis over the vesting period in accordance with the Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and Guidance Note 18 "Share
Based Payments" issued by the ICAI.
n. Provisions and contingencies
The Company makes provision when there is a present obligation as a
result of a past event where the outflow of economic resources is
probable and a reliable estimate of the amount of obligation can be
made.
A disclosure is made for a contingent liability when there is a:
- Possible obligation, the existence of which will be confirmed by the
occurrence/non-occurrence of one or more uncertain events, not fully
with in the control of the Company; or
- Present obligation, where it is not probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation; or
- Present obligation, where a reliable estimate cannot be made.
o. Borrowing costs
Borrowing costs that are directly attributable to acquition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the Company and the costs can be
measured reliably.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
p. Segment reporting
Identification of segments:
The Company''s operating businesses are organized and managed separately
according to the nature of services provided, with each segment
representing a strategic business unit that serves different markets.
The Company operates only in India and accordingly there are no
geographical segments.
Intersegment transfers:
Inter segment revenues have been accounted for based on the transaction
price agreed to between segments which is primarily market led.
Allocation of costs:
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Revenues and expenses, which relate to the Company as a whole and are
not allocable to segments on a reasonable basis are presented as
"Unallocable" in the segment disclosure.
Mar 31, 2012
A. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
b. Revenue Recognition
(i) Advertising and sponsorship revenue from websites is recognized
ratably over the contractual period of advertisement, commencing when
the advertisement is placed on the website, unless the Company has to
meet performance conditions in which case revenue is recognized using
the proportionate completion method. Advertising revenue from magazines
is recognized in the period in which the magazines are delivered and
are accounted net of commission and discounts. Revenue from
sponsorships of event is recognized after the completion of event.
(ii) Revenue from wireless short messaging service is recognized based
on usage of service by the mobile subscribers and share of revenue
agreed with the mobile network operator.
(iii) Sale of magazines includes revenue from circulation of magazines
and subscription of magazines. Revenue from circulation of magazines
includes sales to retail outlets/ newsstands, which are subject to
returns. The Company records these retail sales upon delivery, net of
estimated returns. These estimated returns are based on historical
return rates and are revised as necessary based on actual returns.
Revenue from subscription of magazines is recognized on delivery of
magazines to subscribers.
(iv) Transactions that involve the exchange of goods or services for
other goods or services in respect of web operations are accounted for
in accordance with Guidance Note on Accounting for Dot-com Companies
issued by the Institute of Chartered Accountants of India (ICAI).
Barter transactions are recorded at fair value, being the value at
which similar transactions are executed with other parties.
(v) Revenue from sale of stalls at exhibitions organized by the Company
is recognized after completion of exhibition.
(vi) Dividend income is accounted for when the right to receive
dividend is established.
(vii) Profit / loss on sale of investments are computed on the basis of
weighted average cost on date of disposal of investments.
(viii) Interest income is recognized on time proportionate basis,
taking into account the amount outstanding and the rate applicable.
c. Fixed assets Tangible assets
Fixed assets are stated at their original cost of acquisition and
installation less accumulated depreciation. All direct expenses
attributable to acquisition and installation of assets are capitalized.
Intangible assets
Acquired brands/domain names are capitalized at cost of acquisition and
disclosed as intangible assets.
Website development costs that provide additional functions or features
to the Companys website are capitalized. Maintenance expenses or costs
that do not result in new features or functions are expensed as
incurred.
d. Depreciation
Depreciation on fixed assets is calculated on straight line basis using
the rates arrived at based on the useful lives estimated by management.
The Company has used following useful lives for the fixed assets:
Asset category Useful life
Building 30 years
Ownership flats 62 years
Plant and equipment 2-21 years
Furniture and fixtures 2-16 years
Vehicles 3-11 years
Information technology
and related equipments 2-7 years
Intangible assets:
- Brands / trademarks 5 years
- Website costs 5 years
- Computer software 3-5 years
Leasehold improvements Over the lease period or estimated
useful life, whichever is shorter.
e. Inventory
Inventory is valued as follows:
Raw materials: Lower of cost and net realizable value. However,
materials and other items held for use in the production of inventories
are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Work-in-progress and finished goods: Lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. Cost is
determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
f. Impairment of tangible and intangible assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and the same is accordingly reversed in the statement
of profit and loss.
g. Investments
In accordance with Accounting Standard 13 issued by the Institute of
Chartered Accountants of India, Long Term Investments are stated at
cost less other than temporary diminution in the value of such
investments. Current investments are carried at lower of cost or fair
value.
h. Leases Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
i. Employee benefits Provident Fund
The Companys Employees Provident Fund scheme is a defined contribution
plan. The Companys contribution to the Employees Provident Fund is
charged to the Statement of Profit and Loss during the period in which
the employee renders the related service.
Gratuity
The Company provides for gratuity, a defined benefit plan (the
"Gratuity Plan") covering eligible employees.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognizes each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognized immediately in the
Statement of profit and loss.
Compensated absences
Benefits comprising long term compensated absences constitute other
long term employee benefits. The liability for compensated absences is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the period end. Actuarial gains and losses are
recognized immediately in the Statement of profit and loss.
Short term employee benefits
Short term employee benefits expected to be paid or payable in exchange
for the services rendered is recognized on undiscounted basis.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the period are recognized
in the Statement of Profit and Loss.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate prevailing on
that date and resulting exchange differences are recognized in the
Statement of profit and loss.
k. Income Tax
Income tax comprises current tax and deferred tax. Current tax is
determined in accordance with the provisions of Income Tax Act, 1961.
Deferred tax charge or credit is recognized on timing differences being
the difference between taxable incomes and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
l. Earnings/ (loss) per Share
The company reports basic and diluted earnings/ (loss) per share in
accordance with Accounting Standard 20 on Earnings per Share. Basic
earnings/ (loss) per equity share have been computed by dividing the
Net Profit /(Loss) after tax by the weighted average number of equity
shares outstanding during the period. Diluted earnings / (loss) per
share is computed using the weighted average number of equity shares
and dilutive potential equity shares outstanding during the period
except where the result would be anti-dilutive.
m. Employee stock options plan
Accounting value of stock options is determined on the basis of
"Intrinsic Value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employees Stock Option Scheme" of the Company, and is being amortized
as "Deferred employee compensation" on a straight-line basis over the
vesting period in accordance with the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and
Guidance Note 18 "Share Based Payments" issued by the ICAI.
n. Provisions and contingencies
The Company makes provision when there is a present obligation as a
result of a past event where the outflow of economic resources is
probable and a reliable estimate of the amount of obligation can be
made.
A disclosure is made for a contingent liability when there is a:
- Possible obligation, the existence of which will be confirmed by the
occurrence/non-occurrence of one or more uncertain events, not fully
within the control of the Company; or
- Present obligation, where it is not probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation; or
- Present obligation, where a reliable estimate cannot be made.
o. Borrowing costs
Borrowing costs that are directly attributable to acquit ion,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset when it is probable that they will
result in future economic benefits to the Company and the costs can be
measured reliably.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
p. Segment reporting
Identification of segments:
The Companys operating businesses are organized and managed separately
according to the nature of services provided, with each segment
representing a strategic business unit that serves different markets.
The Company operates only in India and accordingly there are no
geographical segments.
Intersegment transfers:
Inter segment revenues have been accounted for based on the transaction
price agreed to between segments which is primarily market led.
Allocation of costs:
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Revenues and expenses, which relate to the Company as a whole and are
not allocable to segments on a reasonable basis are presented as
"Unallowable" in the segment disclosure.
ii. Preference shares
There is no movement in number and amount of preference share during
the current and previous year.
q. Description of the rights, preferences and restrictions attached to
each class of shares Equity shares : The Company has only one class of
equity shares having a face value of Rs. 5 per share. All the existing
equity shares rank pari passu in all respects including but not limited
to entitlement for dividend, bonus issue and rights issue. These equity
shares are listed on the National Stock Exchange of India and the
Bombay Stock Exchange Limited.
Preference shares : The Preference Shares shall be, subject to
profitability and at the discretion of the Board of Directors, entitled
to a cumulative annual dividend @ 5%. These preference Shares carry
preferential right in respect of dividends and also carry preferential
right in regard to repayment of capital in case of winding up.
Preference Shares are redeemable at the end of five years from 15 May
2008 at Rs. 150 per share.
r. Terms of securities convertible into equity/preference shares
During the year ended 31 March 2012, the Company issued 18,691,585 10%
Secured Optionally Fully Convertible Debentures (" SOFCDs"). These
SOFCDs were issued at a price of Rs. 160.50 per SOFCD on 15 June 2011
and are convertible within a period of 18 months from the date of
allotment of SOFCDs into 18,691,585 Equity Shares. The SOFCD holders
have provided an irrevocable undertaking dated 29 February 2012 that
they (i) shall not exercise the option for conversion of SOFCDs into
Equity Shares and (ii) shall not transfer the SOFCDs.
s. Shares reserved for issue under options and other commitments
i) As on 31 March 2012, 1,513,951 (1,446,398) Employees Stock Options
were outstanding under the Employee Stock Option Plans of the Company.
Each option would entitle the holder thereof to subscribe to one Equity
Share of Rs. 5 each in the Company
ii) As on 31 March 2012, the Company had 18,691,585 10% Secured
Optionally Fully Convertible Debenture(s) (SOFCDs) outstanding. For
details refer note g above
t Share forfeited
In the financial year 2009-10, 12,072 Partly Convertible Cumulative
Redeemable Preference shares on which call money was unpaid were
forfeited.
u Share application money pending allotment
As on 31 March 2011, the Company had received share application money
amounting to Rs. 367,500 in respect of exercise of stock options by
certain employees under the ESOP 2007. Under the said plan, the Company
was required to allot 5,000 equity shares of Rs. 5 each at a premium of
Rs. 68.50 each. The Company had sufficient authorized capital to cover
the share capital amount upon allotment of these shares. Shares have
been allotted against the same on 25 July 2011.
Mar 31, 2011
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules' 2006 to the extent applicable and in accordance with
the provisions of the Companies Act' 1956 as adopted consistently by
the Company.
The significant accounting policies adopted in presentation of accounts
are:
a. Revenue Recognition
(i) Dividends on investments are accounted for when the right to
receive dividend is established.
(ii) Revenue from sponsorships / management contracts is recognised on
accrual basis in accordance with contractual arrangements. Revenue from
sale of entry tickets to events is recognised on receipt basis.
(iii) Profit / Loss on sale of investments are computed on the basis of
weighted average cost on date of disposal of investments.
b. Fixed Assets
Fixed Assets are stated at their original cost of acquisition and
installation less depreciation. All direct expenses attributable to
acquisition and installation of assets are capitalised.
c. Inventory
Inventory includes consumables for events and are written off over
their estimated useful lives.
d. Depreciation
Depreciation on all assets other than improvement to leasehold
properties and computer software is charged on straight line basis over
the estimated useful lives using rates prescribed by Schedule XIV of
the Companies Act, 1956.
Cost of improvements to leasehold premises is being amortised over the
primary lease period . Computer software is depreciated over a period
of 5 years. These rates are higher than those prescribed in Schedule
XIV of the Companies Act, 1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000
individually are fully depreciated in the year of purchase.
e. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of an asset's net selling price and
value in use. In assessing value in use, the estimated future cash
flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount
rate that reflects the current market assessments of time value of
money and the risks specific to the asset
If such recoverable amount of the asset or the recoverable amount of
the cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the Profit & Loss Account. Reversal of impairment loss is
recognised as income in the Profit and Loss Account.
f. Investments
In accordance with Accounting Standard 13 issued by the Institute of
Chartered Accountants of India, Long Term Investments are stated at
cost less other than temporary dilution in the value of such
investments. Current investments are carried at lower of cost or fair
value.
g. Leases (where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
h. Use of Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in the current and future periods.
i. Employee benefits
i. The Company's Employees Provident Fund scheme is a defined
contribution plan. The Company's contribution to the Employees'
Provident Fund is charged to the profit and loss account during the
period in which the employee renders the related service.
ii. Short term employee benefits (Medical, Leave Travel allowance,
etc.) expected to be paid in exchange for the services rendered is
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the "Gratuity Plan") covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides for
a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee's salary and the tenure of employment.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the profit
and loss account.
The liability with respect to the Gratuity Plan is determined based on
actuarial valuation done by an independent actuary at the period end
and any differential between the fund amount as per the insurer and the
actuarial valuation is charged to revenue.
iv. Benefit comprising Long term compensated absences constitutes other
long term employee benefits. The liability for compensated absence is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the period end. Actuarial gains and losses are
recognised immediately in the profit and loss account.
j. Transactions in foreign exchange
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the period are recognised
in the Profit and Loss account.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate ruling on that
date.
k. Income Tax
Income tax comprises current tax and deferred tax. Current tax is
determined in accordance with the provisions of Income Tax Act, 1961.
Advance taxes and provisions for current taxes are presented in the
balance sheet after off setting advance taxes paid and income tax
provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable incomes and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act,
1961, which gives rise to future economic benefit in the form of
adjustment from income tax liability, is recognised when it is certain
that the Company be able to set off the same and adjusted from the
current tax charge for that period.
l. Earnings per Share
The company reports basic and diluted earnings per share in accordance
with AS 20 on Earnings per Share. Basic earnings per equity share have
been computed by dividing the Net Profit (Loss) after tax by the
weighted average number of equity shares outstanding during the period.
Diluted earning per share is computed using the weighted average number
of equity shares and dilutive potential equity shares outstanding
during the period except where the result would be anti-dilutive.
m. Accounting for Employee Share based payments
Measurement and disclosure of the employee share based payment plans is
done in accordance with the Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India (ICAI). The Company measures compensation cost relating to
employee stock options using the intrinsic value method. Compensation
expense is amortised on a straight line basis/graded basis over the
vesting period of the stock option/award. Modifications to stock
option/award schemes are effected in line with the Guidance Note on
Accounting for Employee Share-based Payments, issued by ICAI.
n. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources.
Mar 31, 2010
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rules, 2006 to the extent applicable and in accordance with
the provisions of the Companies Act, 1956 as adopted consistently by
the Company. The signifcant accounting policies adopted in
presentation of accounts are:
a. Revenue Recognition
(i) Dividends on investments are accounted forwhen the right to receive
dividend is established.
(ii) Revenue from sponsorships / management contracts is recognised
on accrual basis in accordance with contractual arrangements. Revenue
from sale of entry tickets to events is recognised on receipt basis.
(iii) profit / Loss on sale of investmentsare computed on the basis of
weighted average cost on date of disposal of investments.
b. Fixed Assets
Fixed Assets are stated at their original cost of acquisition and
installation less depreciation. All direct expenses attributable to
acquisition and installation of assets are capitalised.
c. Inventory
Inventory includes consumables for events and are written off over
their estimated useful lives.
d. Depreciation
Depreciation on all assets other than improvement to leasehold
properties and computer software is charged on straight line basis over
the estimated useful lives using rates prescribed by Schedule XIV of
the Companies Act, 1956.
Cost of improvements to leasehold premises is being amortised over the
primary lease period . Computer software is depreciated over a period
of 5 years. These rates are higher than those prescribed in Schedule
XIV of the Companies Act, 1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000
individually are fully depreciated in the year of purchase.
e. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of an assetÃs net selling price and
value in use. In assessing value in use, the estimated futurecash flows
expected from the continuing use of the asset and from its disposal are
discounted to their present value using a pre-taxdiscount rate that
refects the current market assessments of time value of money and the
risks specifc to the asset
If such recoverable amount of the asset or the recoverable amount of
the cash-generating unit to which the asset belongs is lessthan its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the profit & Loss Account. Reversal of impairment loss is
recognised as income in the profit and Loss Account.
f. Investments
In accordance with Accounting Standard 13 issued by the Institute of
Chartered Accountants of India, Long Term Investments are stated at
cost less other than temporary dilution in the value of such
investments. Current investments are carried at lower of cost or fair
value.
g. Leases (where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefts of ownership of the leased term, are classifed as operating
leases. Operating lease payments are recognized as an expense in the
profit and Loss account on a straight-line basis over the lease term.
h. Use of Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in the current and future periods.
i. Employee benefts
i. The CompanyÃs Employees Provident Fund scheme is a defned
contribution plan. The CompanyÃs contribution to the
EmployeesÃProvident Fund is charged to the profit and loss account
during the period in which the employee renders the related service.
ii. Short term employee benefts (Medical, Leave Travel allowance,
etc.) expected to be paid in exchange for the services renderedis
recognised on undiscounted basis.
iii. The Company provides for gratuity, a defned beneft retirement plan
(the ÃGratuity PlanÃ) covering eligible employees. In accordance with
the Payment of Gratuity Act, 1972, the Gratuity Plan provides for a
lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employeeÃs salary and the tenure of employment.
The present value of the obligation under such defned beneft plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee beneft entitlement and measures each unit
separately to build up the fnal obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the profit
and loss account.
The liability with respect to the Gratuity Plan is determined based on
actuarial valuation done by an independent actuary at the year end and
any differential between the fund amount as per the insurer and the
actuarial valuation is charged to revenue.
iv. Beneft comprising Long term compensated absences constitutes other
long term employee benefts. The liability for compensated absence is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the year end. Actuarial gains and losses are
recognised immediately in the profit and loss account.
j. Transactions in foreign exchange
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the profit and Loss account.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate ruling on that
date.
k. Income Tax
Income tax comprises current tax and deferred tax. Current tax is
determined in accordance with the provisions of Income Tax Act,1961.
Advance taxes and provisions for current taxes are presented in the
balance sheet after off setting advance taxes paid and income tax
provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable income and accountingincome that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act,
1961, which gives rise to future economic beneft in the form of
adjustment from income tax liability, is recognised when it is certain
that the Company be able to set off the same and adjusted from the
current tax charge for that year.
l. Earnings per Share
The company reports basic and diluted earnings per share in accordance
with AS 20 on Earnings per Share. Basic earnings per equity share have
been computed by dividing the Net profit (Loss) after tax by the
weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed using the weighted average
number of equity shares and dilutive potential equity shares
outstanding during the year except where the result would be
anti-dilutive.
m. Accounting for Employee Share based payments
Measurement and disclosure of the employee share based payment plans is
done in accordance with the Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India (ICAI). The Company measures compensation cost relating to
employee stock options using the intrinsic value method. Compensation
expense is amortised on a straight line basis/graded basis over the
vesting period of the stock option/award. Modifcations to stock option/
award schemes are effected in line with the Guidance Note on Accounting
for Employee Share-based Payments, issued by ICAI.
n. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outflow of
resources embodying economic benefts will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources.
Mar 31, 2009
The financial statements are prepared under the historical cost
convention on the accrual basis of accounting and in accordance with
the Generally Accepted Accounting Principles (GAAP) in India and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standards) Rulesà 2006 to the extent applicable and in accordance with
the provisions of the Companies Actà 1956 as adopted consistently by
the Company. The significant accounting policies adopted in
presentation of accounts are:
a. Revenue Recognition
(i) Dividends on investments are accounted for when the right to
receive dividend is established.
(ii) Revenue from sponsorships / management contracts is recognised on
accrual basis in accordance with contractual arrangements
Revenue from sale of entry tickets is recognised on receipt basis.
(iii) Profit / Loss on sale of investments are computed on the basis of
average cost on date of disposal of investments.
b. Fixed Assets
Fixed Assets are stated at their original cost of acquisition and
installation less depreciation. All direct expenses attributable to
acquisition and installation of assets are capitalised.
c. Depreciation
Depreciation on all assets other than improvement to leasehold
properties and computer software is charged on straight line basis over
the estimated useful lives using rates prescribed by Schedule XIV of
the Companies Act, 1956.
Cost of improvements to leasehold premises is being amortised over the
remaining period of lease of the premises. Computer software is
depreciated over a period of 5 years. These rates are higher than those
prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on additions is charged proportionately from the date of
acquisition/ installation. Assets costing less than Rs. 5,000
individually are fully depreciated in the year of purchase.
d. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of an assetÃs net selling price and
value in use. In assessing value in use, the estimated future cash
flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre- tax
discount rate that refects the current market assessments of time value
of money and the risks specific to the asset If such recoverable amount
of the asset or the recoverable amount of the cash-generating unit to
which the asset belongs is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognised in the Profit & Loss Account.
Reversal of impairment loss is recognised as income in the Profit and
Loss Account.
e. Investments
In accordance with The Non Banking Financial (Non Deposit Accepting or
Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007
read with Accounting Standard 13 issued by the Institute of Chartered
Accountants of India, Long Term Investments are stated at cost less
other than temporary dilution in the value of such investments. Current
investments are carried at lower of cost or fair value.
f. Leases (where the Company is the lessee)
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
g. Use of Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in the current and future periods.
h. Employee benefits
i. The CompanyÃs Employees Provident Fund scheme is a defined
contribution plan. The CompanyÃs contribution to the EmployeesÃ
Provident Fund is charged to the profit and loss account during the
period in which the employee renders the related service. ii. Short
term employee benefits (Medical, Leave Travel allowance, etc.) expected
to be paid in exchange for the services rendered are recognised on
undiscounted basis.
iii. The Company provides for gratuity, a defined benefit retirement
plan (the ÃGratuity PlanÃ) covering eligible employees. In accordance
with the Payment of Gratuity Act, 1972, the Gratuity Plan provides for
a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employeeÃs salary and the tenure of employment.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation is based
on the market yields on government securities as at the balance sheet
date. Actuarial gains/losses are recognised immediately in the profit
and loss account.
The liability with respect to the Gratuity Plan is determined based on
actuarial valuation done by an independent actuary at the year end and
any differential between the fund amount as per the insurer and the
actuarial valuation is charged to revenue.
iv. Benefit comprising Long term compensated absences constitutes other
long term employee benefits. The liability for compensated absence is
determined using the Projected Unit Credit Method, on the basis of an
actuarial valuation at the year end. Actuarial gains and losses are
recognised immediately in the profit and loss account.
i. Transactions in foreign exchange
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction. Exchange differences on
foreign exchange transactions settled during the year are recognised in
the Profit and Loss account.
Monetary items denominated in foreign currency and outstanding at the
balance sheet date are translated at the exchange rate ruling on that
date.
j. Income Tax
Income tax comprises current tax and deferred tax. Current tax is
determined in accordance with the provisions of Income Tax Act,
1961. Advance taxes and provisions for current taxes are presented in
the balance sheet after off setting advance taxes paid and income tax
provisions.
Deferred tax charge or credit is recognised on timing differences being
the difference between taxable incomes and accounting income that
originate in one period and are capable of reversal, subject to
consideration of prudence, in one or more subsequent periods. Deferred
tax assets and liabilities are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the balance
sheet date.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act,
1961, which gives rise to future economic benefit in the form of
adjustment from income tax liability, is recognised when it is certain
that the Company be able to set off the same and adjusted from the
current tax charge for that year.
Provision for fringe benefit tax (FBT) is made on the basis of the
applicable FBT on the taxable value of eligible expenses of the
Company as prescribed under the Income Tax Act, 1961
k. Earnings Per Share
The company reports basic and diluted earnings per share in accordance
with AS 20 on Earnings per Share. Basic earnings per equity share have
been computed by dividing the Net Profit (Loss) after tax by the
weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed using the weighted average number
of equity shares and dilutive potential equity shares outstanding
during the year except where the result would be anti-dilutive.
l . Accounting for Employee Share based payments
Measurement and disclosure of the employee share based payment plans is
done in accordance with the Guidance Note on Accounting for Employee
Share-based Payments, issued by the Institute of Chartered Accountants
of India (ICAI). The Company measures compensation cost relating to
employee stock options using the intrinsic value method. Compensation
expense is amortised on a straight line basis/graded basis over the
vesting period of the stock option/award. Modifications to stock
option/ award schemes are effected in line with the Guidance Note on
Accounting for Employee Share-based Payments, issued by ICAI.
m. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of a past event, when it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and reliable estimate can be made of the amount of the
obligation. A contingent liability is recognised where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources.
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