Accounting Policies of Zee Entertainment Enterprises Ltd. Company
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
A) Statement of compliance
These financial statements have been prepared in accordance with
the Indian Accounting Standards (hereinafter referred to as the Ind
AS) as notified by Ministry of Corporate Affairs pursuant to Section
133 of the Companies Act, 2013 (the Act) read with the Companies
(Indian Accounting Standards) Rules, 2015 as amended and other
relevant provisions of the Act and accounting principles generally
accepted in India.
B) Basis of preparation of financial statements
These financial statements have been prepared and presented under
the historical cost convention, on the accrual basis of accounting
except for certain financial assets and liabilities that are measured
at fair values at the end of each reporting period, as stated in the
accounting policies stated out below. These financial Statements
have been prepared by the Company as a going concern.
The accounting policies are applied consistently to all the periods
presented in the financial statements, except where a newly issued
accounting standard is initially adopted or a revision to an existing
standard requires a change in the accounting policy hitherto in use.
The financial statements are presented in Indian Rupee which is also
the functional currency of the Company. All amounts disclosed in the
financial statements and notes have been rounded-off to the nearest
million as per the requirement of Schedule III, unless otherwise stated.
Amount less than a million is presented as ''0 million.
Assets and Liabilities are classified as Current or Non-current as per
the provisions of Schedule III to the Companies Act, 2013 and the
Companyâs Normal Operating Cycle. Based on the nature of business,
the Company has ascertained its operating cycle as 12 months for the
classification of assets and liabilities.
The figures for the corresponding previous year have been regrouped/
reclassified wherever necessary, to make them comparable.
The impact of such reclassification/regrouping is not material to the
standalone financial statements.
Previous year figures, where applicable, have been indicated in
brackets.
Business combinations have been accounted for using the acquisition
method.
The consideration transferred is measured at the fair value of the
assets transferred, equity instruments issued and liabilities incurred
or assumed at the date of acquisition, which is the date on which
control is achieved by the Company. The cost of acquisition also
includes the fair value of any contingent consideration. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair value on the
date of acquisition.
Business combinations involving entities that are controlled by the
Company are accounted for using the pooling of interests method as
follows:
I The assets and liabilities of the combining entities are reflected
at their carrying amounts.
II No adjustments are made to reflect fair values, or recognise
any new assets or liabilities. Adjustments are only made to
harmonise accounting policies.
III The balance of the retained earnings appearing in the
financial statements of the transferor is aggregated with the
corresponding balance appearing in the financial statements
of the transferee or is adjusted against general reserve.
IV The identity of the reserves are preserved and the reserves of
the transferor become the reserves of the transferee.
V The difference, if any, between the amounts recorded as share
capital issued plus any additional consideration in the form of
cash or other assets and the amount of share capital of the
transferor is transferred to capital reserve and is presented
separately from other capital reserves.
VI The financial information in the financial statements in respect
of prior periods is restated as if the business combination
had occurred from the beginning of the preceding period in
the financial statements, irrespective of the actual date of
combination. However, where the business combination had
occured after that date, the prior period information is restated
only from that date.
Transaction costs that the Company incurs in connection with a
business combination such as finderâs fees, legal fees, due diligence
fees, and other professional and consulting fees are expensed as
incurred.
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interest in the acquiree,
and the fair value of the acquirerâs previously held equity interest in
the acquiree (if any) over the net acquisition date amounts of the
identifiable assets acquired and the liabilities assumed.
I n case of a bargain purchase, before recognising a gain in respect
thereof, the Company determines whether there exists clear evidence
of the underlying reasons for classifying the business combination
as a bargain purchase. Thereafter, the Company reassesses whether
it has correctly identified all of the assets acquired and all of the
liabilities assumed and recognises any additional assets or liabilities
that are identified in that reassessment. The Company then reviews
the procedures used to measure the amounts that Ind AS requires for
the purposes of calculating the bargain purchase. If the gain remains
after this reassessment and review, the Company recognises it in
other comprehensive income and accumulates the same in equity as
capital reserve. This gain is attributed to the acquirer. If there does
not exist clear evidence of the underlying reasons for classifying
the business combination as a bargain purchase, the Company
recognises the gain, after assessing and reviewing (as described
above), directly in equity as capital reserve.
When the consideration transferred by the Company in a business
combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration
arrangement is measured at its acquisition date fair value and included
as a part of the consideration transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify
as measurement period adjustments are adjusted retrospectively,
with the corresponding adjustments against goodwill or capital
reserve, as the case may be. Measurement period adjustments are
adjustments that arise from additional information obtained during
the âmeasurement periodâ (which cannot exceed one year from the
acquisition date) about facts and circumstances that existed at the
acquisition date.
The subsequent accounting for changes in the fair value of
contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration
is classified. Contingent consideration that is classified as equity is
not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration
that is classified as an asset or a liability is remeasured at fair value at
subsequent reporting dates with the corresponding gain or loss being
recognised in the statement of profit and loss.
When a business combination is achieved in stages, the Companyâs
previously held equity interest in the acquiree is remeasured to its
acquisition date fair value and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously been
recognised in other comprehensive income are reclassified to profit
or loss where such treatment would be appropriate if that interest
were disposed off.
D) Property, plant and equipment
I Property, plant and equipment are stated at cost, less
accumulated depreciation and impairment loss, if any. The
cost comprises purchase price and related expenses and for
qualifying assets, borrowing costs are capitalised based on the
Companyâs accounting policy. Integrated Receiver Decoders
(IRD) boxes are capitalised, when available for deployment.
II Capital work-in-progress comprises cost of property, plant and
equipment and related expenses that are not yet ready for their
intended use at the reporting date.
III Depreciation is recognised so as to write off the cost of assets
(other than free hold land and capital work-in-progress) less
their residual values over their useful lives, using the straight¬
line method. The estimated useful lives, residual values and
depreciation method are reviewed at each reporting period,
with the effect of changes in estimate accounted for on a
prospective basis.
IV The estimate of the useful life of the assets has been assessed
based on technical advice, taking into account the nature of
the asset, the estimated usage of the asset, the operating
conditions of the asset, past history of replacement etc. The
estimated useful life of items of property, plant and equipment
is as mentioned below:
I Investment property are properties (land or a building or part
of a building or both) held to earn rentals and/or for capital
appreciation (including property under construction for such
purposes). Investment property is measured initially at cost
including purchase price, borrowing costs. Subsequent to
initial recognition, investment property is measured at cost less
accumulated depreciation and impairment, if any.
II Depreciation on investment property is provided as per the
useful life prescribed in Schedule II to the Companies Act, 2013.
F) Non-current assets held for sale
The Company classifies non-current assets as held for sale if their
carrying amounts will be recovered principally through a sale
rather than through continuing use and the sale is highly probable.
Management must be committed to the sale, which should be
expected within one year from the date of classification.
For these purposes, sale transactions include exchanges of non¬
current assets for other non-current assets when the exchange has
commercial substance. The criteria for held for sale classification
is regarded as met only when the asset is available for immediate
sale in its present condition, subject only to terms that are usual and
customary for sales of such assets, its sale is highly probable; and it
will genuinely be sold, not abandoned. The Company treats sale of
the asset to be highly probable when:
I The appropriate level of management is committed to a plan to
sell the asset,
II An active programme to locate a buyer and complete the plan
has been initiated (if applicable),
III The asset is being actively marketed for sale at a price that is
reasonable in relation to its current fair value,
IV The sale is expected to qualify for recognition as a completed
sale within one year from the date of classification, and
V Actions required to complete the plan indicate that it is unlikely
that significant changes to the plan will be made or that the plan
will be withdrawn.
Non-current assets held for sale are measured at the lower of their
carrying amount and the fair value less costs to sell.
Property, plant and equipment and intangible assets once classified
as held for sale are not depreciated or amortised.
Gains and losses on disposals of non-current assets are determined
by comparing proceeds with carrying amounts and are recognised in
the statement of profit and loss.
A discontinued operation is a component of the entity that has been
disposed off or is classified as held for sale and
i represents a separate major line of business or geographical
area of operations and;
ii is part of a single co-ordinated plan to dispose of such a line of
business or area of operations.
The result of discontinued operations are presented separately as a
single amount as profit or loss after tax from discontinued operations
in the statement of profit and loss.
An impairment loss is recognised for any initial or subsequent write¬
down the asset to fair value less costs to sell. A gain is recognised
for any subsequent increases in fair value less costs to sell of an
asset, but not in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by the date of
the sale of the asset is recognised at the date of de-recognition.
Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business less accumulated
impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to the
respective cash generating units that is expected to benefit from the
synergies of the combination.
A cash generating unit 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 on a pro-rata basis, based on the carrying amount of each asset
in the unit. Any impairment loss for the goodwill is recognised directly
in the statement of profit and loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
On the disposal of the relevant cash generating unit, the attributable
amount of goodwill is included in the determination of the profit or
loss on disposal.
Intangible assets with finite useful lives that are acquired are carried
at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over the
estimated useful lives.
The estimated useful life for intangible assets is 3 years. The
estimated useful and amortisation method are reviewed at each
reporting period, with the effect of any changes in the estimate being
accounted for on a prospective basis.
Intangible assets under development:
Expenditure incurred on acquisition/development of intangible assets
which are not ready for their intended use at balance sheet date are
disclosed under intangible assets under development.
Research and development of internally generated assets:
Research costs are expensed as incurred. Development expenditures
on an internally generated assets are recognised as an intangible
asset when the Company can demonstrate:
I. The technical feasibility of completing the intangible asset so
that the asset will be available for use or sale;
II. Its intention to complete and its ability and intention to use or
sell the asset;
III. How the asset will generate future economic benefits;
IV. The availability of resources to complete the asset;
V. The ability to measure reliably the expenditure during
development.
The cost of development on internally generated intangible asset
includes the directly attributable expenditure of preparing the asset
for its intended use. Expenditure on training activities, identified
inefficiencies and initial operating losses is expensed as it is incurred.
The cost recognised is the sum of expenditure incurred from the date
when the intangible asset first meets the recognition criteria and prohibits
reinstatement of expenditure previously recognised as an expense.
Directly attributable costs comprise all costs necessary to create,
produce, and prepare the asset to be capable of operating in the
manner intended by management. The capitalisation cut off is
determined by when the testing stage of the software has been
completed and the software is ready to go live. Costs incurred after
the final acceptance testing and launch have been successfully
completed, is expensed.
Post the launch of the software, the cost is accounted for as part of
the development phase only where there is the software platform
development and activities to improve its functionality which enhance
the assetâs economic benefits potential and the cost meets the
recognition criteria listed above for the recognition of development
costs as an asset.
Following initial recognition of the development expenditure as an
asset, the asset is carried at cost less any accumulated amortisation
and accumulated impairment losses. Amortisation of the asset begins
when development is complete and the asset is available for use. It is
amortised over the period of expected future benefit. Amortisation
expense is recognised in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset. During the
period of development, the asset is tested for impairment annually.
Intangible assets acquired in a business combination:
Intangible assets acquired in a business combination and recognised
separately from Goodwill are initially recognised at their fair value at
the acquisition date (which is regarded as their cost). Subsequent
to initial recognition, the intangible assets acquired in a business
combination are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.
I) Impairment of property, plant and equipment/ right-of-use
assets/ other intangible assets/ investment property
The carrying amounts of the Companyâs property, plant and equipment,
right-of-use assets, other intangible assets and investment property
are reviewed at each reporting date to determine whether there is any
indication that those assets have suffered any impairment loss. If there
are indicators of impairment, an assessment is made to determine
whether the assetâs carrying value exceeds its recoverable amount.
Where it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable amount of
the cash generating unit to which the asset belongs.
An impairment loss is recognised in statement of profit and loss
whenever the carrying amount of an asset or a cash generating unit
exceeds its recoverable amount. The recoverable amount is the
higher of fair value less costs of disposal and value in use. In assessing
the value in use, the estimated future cash flows are discounted to
the present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific
to the assets for which the estimates of future cash flows have not
been adjusted.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount, so that the increased
carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised
for the asset (or cash generating unit) in prior years. Reversal of an
impairment loss is recognised immediately in the statement of profit
and loss.
J) Derecognition of property, plant and equipment/ right-of-use
assets/ other intangible assets/ investment property
The carrying amount of an item of property, plant and equipment/
right-of-use assets/ other intangible assets/ investment property is
derecognised on disposal or when no future economic benefits are
expected from its use or disposal. The gain or loss arising from the
derecognition of an item of property, plant and equipment/ right-of-use
assets/ other intangible assets/ investment property is deteremined
as the difference between the net disposal proceeds and the carrying
amount of the item and is recognised in the Statement of profit and
loss.
The Company evaluates each contract or arrangement, whether it
qualifies as lease as defined under Ind AS 116 on âLeasesâ.
The Company assesses whether a contract is or contains a
lease, at inception of the contract. The Company recognises
a right-of-use asset and a corresponding lease liability with
respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets. For
these leases, the Company recognises the lease payments as
an operating expense on a straight-line basis over the term of
the lease.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this
rate cannot be readily determined, the Company uses its
incremental borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
a Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;
b Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
The amount expected to be payable by the lessee under
residual value guarantees;
c The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
d Payments of penalties for terminating the lease, if the
lease term reflects the exercise of an option to terminate
the lease. The lease liability is presented as a separate
line item in the balance sheet.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying
amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
a The lease term has changed or there is a significant event
or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which
case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
b The lease payments change due to changes in an
index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease
payments using an unchanged discount rate (unless the
lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is
used).
c A lease contract is modified and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term
of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective
date of the modification.
The Company did not make any such adjustments during the
periods presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement day, less any lease incentives received and
any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Company expects to exercise
a purchase option, the related right-of-use asset is depreciated
over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right-of-use assets is presented as a separate line item in
the balance sheet.
The Company applies Ind AS 36 to determine whether a right-of-
use asset is impaired and accounts for any identified impairment
loss as described in the âProperty, Plant and Equipmentâ policy.
The Company enters into lease agreements as a lessor with
respect to some of its investment properties.
Leases for which the Company is a lessor are classified as
finance or operating leases. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
Cash and cash equivalents in the balance sheet comprise cash at
banks and in hand and short-term deposits with an original maturity
of three months or less, which are subject to an insignificant risk of
changes in value.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and short-term deposits, as defined
above.
M) InventoriesI Media Content:
Media content i.e. Programs, Film rights, Music rights (completed
(commissioned/acquired) and under production) including
content in digital form are stated at lower of cost/unamortised
cost or realisable value. Cost comprises acquisition/direct
production cost. Where the realisable value of media content
is less than its carrying amount, the difference is expensed.
Programs, film rights, music rights are expensed/amortised as
under:
a Programs - reality shows, chat shows, events, game
shows, etc. are fully expensed on telecast/upload.
b Programs (other than (a) above) are amortised over three
financial years starting from the year of first telecast/
upload, as per management estimate of future revenue
potential.
c Film rights are amortised on a straight-line basis over the
licensed period or sixty months from the commencement
of rights, whichever is shorter.
d Music rights are amortised over ten years starting from
the year of commencement of rights, as per management
estimate of future revenue potential.
e The cost of educational content acquired is amortised on
a straight-line basis over the license period or 60 months
from the date of acquisition/right start date, whichever is
shorter.
f Films produced and/or acquired for distribution/sale of
rights:
Cost is allocated to each right based on management estimate
of revenue. Film rights are amortised as under:
i Satellite rights - Allocated cost of right is expensed
immediately on sale.
ii Theatrical rights - Amortised in the month of theatrical
release.
- The objective of the business model is
achieved both by collecting contractual cash
flows and selling the financial assets.
- The assetâs contractual cash flows represent
solely payments of principal and interest.
Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognised in the other comprehensive income
(OCI). However, the Company recognises interest
income, impairment losses and reversals and
foreign exchange gain or loss in the statement
of profit and loss. On derecognition of the asset,
cumulative gain or loss previously recognised in
OCI is reclassified from the equity to statement
of profit and loss. Interest earned whilst holding
FVTOCI debt instrument is reported as interest
income using the effective interest rate method.
In case of âequity shareâ, the Company has
irrevocable election choice that can be exercised
on an instrument by instrument basis to classify
such instruments as FVOCI. Accordingly the
Company has classified certain investment in
equity instrument as Fair Value through other
comprehensive income.
iii Fair value through Profit and Loss (FVTPL):
FVTPL is a residual category for debt instruments.
Any debt instrument, which does not meet the
criteria for categorisation as at amortised cost or
as FVTOCI, is classified as at FVTPL. In addition,
the Company may elect to designate a debt
instrument, which otherwise meets amortised cost
or FVTOCI criteria, as at FVTPL. However, such
election is considered only if doing so reduces
or eliminates a measurement or recognition
inconsistency (referred to as âaccounting
mismatchâ). Debt instruments included within the
FVTPL category are measured at fair value with
all changes recognised in the statement of profit
and loss.
iv Equity investments:
The Company subsequently measures all equity
investments at fair value. Where the Companyâs
management has elected to present fair value
gains and losses on equity investments in other
comprehensive income, there is no subsequent
reclassification of fair value gains and losses to
statement of profit and loss. Dividends from such
investments are recognised in statement of profit
and loss as other income when the Companyâs right
to receive payment is established.
iii Intellectual Property Rights (IPRs) - Allocated cost of IPRs
are amortised over 5 years from release of film.
iv Music and Other Rights - Allocated cost of each right is
expensed immediately on sale.
Tapes are valued at lower of cost or estimated net realisable
value. Cost is taken on weighted average basis.
Financial instruments is any contract that gives rise to a financial asset
of one entity and a financial liability or equity instrument of another
entity.
Financial assets (excluding trade receivables) and financial
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit
and loss) are added to or deducted from the fair value of
the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to
the acquisition of financial assets or financial liabilities at fair
value through profit and loss are recognised immediately in the
statement of profit and loss.
However, trade receivables that do not contain a significant
financing component are measured at transaction price under
Ind AS 115 âRevenue from Contracts with Customersâ.
II Financial assetsa Classification of financial assets
Financial assets are classified into the following specified
categories: amortised cost, financial assets âat fair value
through profit and lossâ (FVTPL), âFair value through other
comprehensive incomeâ (FVTOCI). The classification
depends on the Companyâs business model for managing
the financial assets and the contractual terms of cash flows.
b Subsequent measurementi Debt Instrument - 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. This category generally applies to
trade and other receivables.
ii Fair value through other comprehensive
income (FVTOCI):
A âdebt instrumentâ is classified as at the FVTOCI if
both of the following criteria are met:
v Investment in subsidiaries, joint ventures and
associates:
Investment in subsidiaries, joint ventures and
associates are carried at cost less impairment loss
in accordance with Ind AS 27 on âSeparate Financial
Statementsâ.
vi Derivative financial instruments:
Derivative financial instruments are classified and
measured at fair value through profit and loss.
c Derecognition of financial assets
A financial asset is derecognised only when:
i The Company has transferred the rights to receive
cash flows from the asset or the rights have expired
or
ii The Company retains the contractual rights to
receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash
flows to one or more recipients in an arrangement.
Where the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset
is derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.
d Impairment of financial assets
I n accordance with Ind AS 109, the Company applies
Expected Credit Losses (âECLâ) model for measurement
and recognition of impairment loss on the following
financial assets:
⢠Financial assets that are debt instruments, and are
measured at amortised cost, e.g. loans and deposits;
⢠Financial assets that are debt instruments and are
measured at fair value through other comprehensive
income (FVTOCI);
⢠Trade receivables or any contractual right to receive
cash or another financial asset that result from
transactions that are within the scope of Ind AS 115.
Expected Credit Losses are measured through a loss
allowance at an amount equal to:
⢠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), if the credit risk on a
financial instrument has not increased significantly; or
⢠Full lifetime expected credit losses (expected credit
losses that result from all possible default events over
the life of the financial instrument), if the credit risk
on a financial instrument has increased significantly.
I n accordance with Ind AS 109 - Financial Instruments,
the Company applies ECL model for measurement and
recognition of impairment loss on the trade receivables or
any contractual right to receive cash or another financial
asset that result from transactions that are within the
scope of Ind AS 115 - Revenue from Contracts with
Customers.
For this purpose, the Company follows âsimplified
approachâ for recognition of impairment loss allowance
on the trade receivable balances, contract assets and
lease receivables. The application of simplified approach
requires expected lifetime losses to be recognised from
initial recognition of the receivables based on lifetime
ECLs at each reporting date.
I n case of other assets, the Company determines if
there has been a significant increase in credit risk of the
financial asset since initial recognition. If the credit risk
of such assets has not increased significantly, an amount
equal to twelve months ECL is measured and recognised
as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured
and recognised as loss allowance.
When determining whether the credit risk of a financial
asset has increased significantly since initial recognition
and when estimating expected credit losses, the Company
considers reasonable and supportable information that is
relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and
analysis, based on the Companyâs historical experience
and informed credit assessment and including
forward-looking information.
The gross carrying amount of a financial asset is written
off (either partially or in full) to the extent that there is no
realistic prospect of recovery. This is generally the case
when the Company determines that the debtor does not
have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the
write off. However, financial assets that are written off
could still be subject to enforcement activities in order to
comply with the Companyâs procedures for recovery of
amounts due.
III Financial liabilities and equity instruments
a Classification of debt or equity:
Debt or equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.
b Subsequent measurement:i Financial liabilities measured at amortised cost:
Financial liabilities are subsequently measured
at amortised cost using the effective interest rate
(EIR) method. Gains and losses are recognised in
statement of profit and loss when the liabilities
are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated
by taking into account any discount or premium
on acquisition and fee or costs that are an integral
part of the EIR. The EIR amortisation is included in
finance costs in the statement of profit and loss.
ii Financial liabilities measured at fair value
through profit and loss (FVTPL):
Financial liabilities at FVTPL include financial
liabilities held for trading and financial liabilities
designated upon initial recognition as FVTPL.
Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing
in the near term. Derivatives, including separated
embedded derivatives are classified as held for
trading unless they are designated as effective
hedging instruments. Financial liabilities at fair
value through profit and loss are carried in the
financial statements at fair value with changes in
fair value recognised in other income or finance
costs in the statement of profit and loss.
Lease liability associated with assets taken on
lease (except short-term and low value assets) is
measured at the present value of lease payments to
be made. Lease payments are discounted using the
incremental rate of borrowing as the case may be.
Lease payments comprise fixed payments in relation
to the lease (less lease incentives receivable),
variable lease payments, if any and other amounts
(residual value guarantees, penalties, etc.) to be
payable in future in relation to the lease arrangement.
c Derecognition of financial liabilities:
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.
The Company measures financial instruments such as debts and
certain investments, at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
a In the principal market for the asset or liability or
b In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be
accessible by the Company.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.
The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
a Level 1 â Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.
b Level 2 â Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.
c Level 3 â Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the balance
sheet on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the
end of each reporting period.
For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
V Offsetting financial instruments
Financial assets and liabilities are offset and the net amount
is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must be
enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy of the Company or the
counterparty.
O) Borrowings and borrowing costs
Borrowing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use of sale. All other
borrowing costs are recognised in profit or loss in the period in which
they are incurred.
Mar 31, 2022
1. CORPORATE INFORMATION
Zee Entertainment Enterprises Limited (âZEELâ or âthe Companyâ) is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The registered office of the Company is 18th floor, A Wing, Marathon Futurex, N. M. Joshi Marg, Mumbai - 400 013, India. The Company is mainly in the following businesses:
A) Broadcasting of Satellite Television Channels and digital media;
B) Space Selling agent for other satellite television channels;
C) Sale of Media Content i.e. programmes/film rights/feeds/music rights;
D) Movie production and distribution.
2. SIGNIFICANT ACCOUNTING POLICIES
A) Statement of compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
B) Basis of preparation of financial statements
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.
Previous year figures, where applicable, have been indicated in brackets.
C) Business combinations
Business combinations have been accounted for using the acquisition method.
The consideration transferred is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is achieved by the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.
Business combinations involving entities that are controlled by the group are accounted for using the pooling of interests method as follows:
I. The assets and liabilities of the combining entities are reflected at their carrying amounts.
II. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to harmonise accounting policies.
III. The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve.
IV. The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
V. The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.
VI. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of combination. However, where the business combination had occured after that date, the prior period information is restated only from that date.
Transaction costs that the Company incurs in connection with a business combination such as finderâs fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirerâs previously held equity interest in the acquiree (if any) over the net acquisition date amounts of the identifiable assets acquired and the liabilities assumed.
In case of a bargain purchase, before recognising a gain in respect thereof, the Company determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognises any additional assets or liabilities that are identified in that reassessment. The Company then reviews the procedures used to measure the amounts that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Company recognises it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Company recognises the gain, after assessing and reviewing (as described above), directly in equity as capital reserve.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration arrangement is measured at its acquisition date fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments against goodwill or capital reserve, as the case may be. Measurement period adjustments are adjustments that arise from additional information obtained during
the âmeasurement periodâ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at fair value at subsequent reporting dates with the corresponding gain or loss being recognised in the statement of profit and loss.
When a business combination is achieved in stages, the Companyâs previously held equity interest in the acquiree is remeasured to its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off.
D) Property, plant and equipment
I. Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price and related expenses and for qualifying assets, borrowing costs are capitalised based on the Companyâs accounting policy. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.
II. Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.
III. Depreciation is recognised so as to write off the cost of assets (other than free hold land and capital work-in-progress) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each reporting period, with the effect of changes in estimate accounted for on a prospective basis.
IV. The estimate of the useful life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc. The estimated useful life of items of property, plant and equipment is as mentioned below:
|
Furniture and Fixtures |
5 years A |
|
Buildings |
60 years * |
|
Computers |
3 and 6 years * |
|
Equipment |
3 to 5 years A |
|
Plant and Machinery |
A |
|
Gas Plant |
20 years |
|
Others |
5 to 10 years |
|
Vehicles |
5 years A |
* Useful life is as prescribed in Schedule II to the Companies Act, 2013 A Useful life is lower than as prescribed in Schedule II to the Companies Act, 2013
Right-of-use (ROU) assets are stated at cost, less accumulated depreciation and impairment loss, if any. The carrying amount of ROU assets is adjusted for remeasurement of lease liability, if any, in future. Cost of ROU assets comprises the amount of initial measurement of lease liability, lease payments made before the commencement date (net of incentives received), initial direct costs and present value of estimated costs of dimantling and restoration, if any.
ROU assets are depreciated on straight line basis from the commencement date to the end of useful life of asset or lease term whichever is earlier.
I. I nvestment property are properties (land or a building or part of a building or both) held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.
II. Depreciation on investment property is provided as per the useful life prescribed in Schedule II to the Companies Act, 2013.
G) Non-current assets held for sale
The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use and the sale is highly probable. Management must be committed to the sale, which should be expected within one year from the date of classification.
For these purposes, sale transactions include exchanges of noncurrent assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded as met only when the asset is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets, its sale is highly probable; and it will genuinely be sold, not abandoned. The Company treats sale of the asset to be highly probable when:
I. The appropriate level of management is committed to a plan to sell the asset,
II. An active programme to locate a buyer and complete the plan has been initiated (if applicable),
III. The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
IV. The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and
V. Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Non-current assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.
Gains and losses on disposals of non-current assets are determined by comparing proceeds with carrying amounts and are recognised in the statement of profit and loss.
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to the respective cash generating units that is expected to benefit from the synergies of the combination.
A cash generating unit 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 on a pro-rata basis, based on the carrying amount of each asset in the unit. Any impairment loss for the goodwill is recognised directly in the statement of profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On the disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Intangible assets with finite useful lives that are acquired are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives.
The estimated useful life for intangible assets is 3 years. The estimated useful and amortisation method are reviewed at each reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis.
Intangible assets acquired in a business combination:
Intangible assets acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, the intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
J) Impairment of property, plant and equipment/right-of-use assets/other intangible assets/investment property
The carrying amounts of the Companyâs property, plant and equipment, right-of-use assets, other intangible assets and investment property are reviewed at each reporting date to determine whether there is any indication that those assets have suffered any impairment loss. If there are indicators of impairment, an assessment is made to determine
whether the assetâs carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment loss is recognised in statement of profit and loss whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Reversal of an impairment loss is recognised immediately in the statement of profit and loss.
K) Derecognition of property, plant and equipment/right-of-use assets/other intangible assets/investment property
The carrying amount of an item of property, plant and equipment/ right-of-use assets/other intangible assets/investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment/right-of-use assets/other intangible assets/investment property is deteremined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in the Statement of profit and loss.
The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116 on âLeasesâ.
For effects of application of IND AS 116 on financial position, refer note 32.
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
a) Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
b) Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
c) The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
d) Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. The lease liability is presented as a separate line item in the balance sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
a) The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
b) The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
c) A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The Company did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets is presented as a separate line item in the balance sheet.
The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the âProperty, Plant and Equipmentâ policy.
The Company enters into lease agreements as a lessor with respect to some of its investment properties.
Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
N) InventoriesI. Media Content:
Media content i.e. programmes, film rights, music rights (completed (commissioned/acquired) and under production) including content in digital form are stated at lower of cost/unamortised cost or realisable value. Cost comprises acquisition/direct production cost. Where the realisable value of media content is less than its carrying amount, the difference is expensed. Programmes, film rights, music rights are expensed/amortised as under:
a) Programmes - reality shows, chat shows, events, game shows, etc. are fully expensed on telecast/upload.
b) Programmes (other than (1) above) are amortised over three financial years starting from the year of first telecast/upload, as per management estimate of future revenue potential.
c) Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter.
d) Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential.
e) The cost of educational content acquired is amortised on a straight line basis over the license period or 60 months from the date of acquisition/right start date, whichever is shorter.
- The assetâs contractual cash flows represent solely payments of principal and interest.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). However, the Company recognises interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the effective interest rate method.
iii. Fair value through Profit and Loss (FVTPL):
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.
iv. Equity investments:
The Company subsequently measures all equity investments at fair value. Where the Companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Companyâs right to receive payment is established.
v. Investment in subsidiaries, joint ventures and associates:
Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with Ind AS 27 on âSeparate Financial Statementsâ.
vi. Derivative financial instruments:
Derivative financial instruments are classified and measured at fair value through profit and loss.
c) Derecognition of financial assets
A financial asset is derecognised only when:
i. The Company has transferred the rights to receive cash flows from the asset or the rights have expired or
ii. The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and
f) Films produced and/or acquired for distribution/sale of rights:
Cost is allocated to each right based on management estimate of revenue. Film rights are amortised as under:
i. Satellite rights - Allocated cost of right is expensed immediately on sale.
ii. Theatrical rights - Amortised in the month of theatrical release.
i ii. I ntellectual Property Rights (IPRs) - Allocated cost of IPRs are
amortised over 5 years from release of film. i v. Music and Other Rights - Allocated cost of each right is expensed
immediately on sale.
Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.
Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss.
II. Financial assetsa) Classification of financial assets
Financial assets are classified into the following specified categories: amortised cost, financial assets âat fair value through profit and lossâ (FVTPL), âFair value through other comprehensive incomeâ (FVTOCI). The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of cash flows.
b) Subsequent measurementi. Debt Instrument - 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. This category generally applies to trade and other receivables.
ii. Fair value through other comprehensive income (FVTOCI):
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
- The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.
rewards of ownership of the financial asset, the financial asset is not derecognised.
d) Impairment of financial assets
The Company measures the expected credit loss associated with its financial assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
III. Financial liabilities and equity instrumentsa) Classification of debt or equity:
Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
b) Subsequent measurement:i. Financial liabilities measured at amortised cost:
Financial liabilities are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit and loss.
ii. Financial liabilities measured at fair value through profit and loss (FVTPL):
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit and loss are carried in the financial statements at fair value with changes in fair value recognised in other income or finance costs in the statement of profit and loss.
Lease liability associated with assets taken on lease (except shortterm and low value assets) is measured at the present value of lease payments to be made. Lease payments are discounted using the incremental rate of borrowing as the case may be. Lease payments comprise fixed payments in relation to the lease (less lease incentives receivable), variable lease payments, if any and other amounts (residual value guarantees, penalties, etc.) to be payable in future in relation to the lease arrangement.
c) Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated
as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
The Company measures financial instruments such as debts and certain investments, at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability or
b) In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
b) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
c) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
P) Borrowings and borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Q) Provisions, contingent liabilities and contingent assets
The Company recognises provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainities surrounding the obligation. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurance or non-occurance of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that the outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.
R) Revenue recognitionInd AS 115 on âRevenue from Contracts with Customersâ
Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise.
I. Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television/digital broadcasting service to subscribers.
II. Sale of media content - Revenue is recognised when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.
III. Commission revenue - Commision of space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.
IV. Revenue from theatrical distribution of films is recognised over a period of time on the basis of related sales reports.
V. Revenue from other services is recognised as and when such services are completed/performed.
VI. I nterest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable.
VII. Dividend income is recognised when the Companyâs right to receive dividend is established.
VIII. Rent income is recognised on accrual basis as per the agreed terms on straight line basis.
S) Retirement and other employee benefits
Payments to defined contribution plans viz. government administered provident funds and pension schemes are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined retirement benefit plans in the form of gratuity and leave encashment, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
I. service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
II. net interest expense or income; and
III. remeasurement
The Company presents the first two components of defined benefit costs in statement of profit and loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
Short-term and other long-term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
T) Transactions in foreign currencies
The functional currency of the Company is Indian Rupees (â?â).
I. Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.
II. Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.
III. Non-monetary foreign currency items are measured in terms of historical cost in the foreign currency and are not retranslated.
U) Accounting for taxes on income
Tax expense comprises of current and deferred tax.
Current tax is the amount of income taxes payable in respect of taxable profit for a year. Current tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is recognised 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 are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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 realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year:
Current and deferred tax are recognised in the statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share are computed by dividing the profit after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares.
The Company recognises compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves.
3. KEY ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Companyâs financial statements requires the Management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. 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.
The key assumptions concerning the future and other key sources of estimating the uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
A) Income-taxes
The Companyâs tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.
B) Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.
C) Impairment of goodwill
Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash-generating unit or groups of cash-generating units which are benefitting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes.
Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long-term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent managementâs best estimate about future developments.
I n estimating the future cash flows/fair value less cost of disposal, the Company has made certain assumptions relating to the future customer base, future revenues, operating parameters, capital expenditure and terminal growth rate which the Company believes reasonably reflects the future expectation of these items. However, if these assumptions change consequent to change in future conditions, there could be further favourable/adverse effect on the recoverable amount of the assets. The assumptions will be monitored on periodic basis by the Company and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate.
D) Defined benefit obligation
The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 on âEmployee benefitsâ over the period during which benefit
impact on the financial statements for the year ended 31st March 2022 is primarily due to restrictions caused by the COVID-19 on the business activities. Hence, the financial statements for the year ended 31st March 2022 are not strictly comparable with the financial statements of the earlier years presented.
Since early March 2021, India has witnessed a second wave of COVID-19 with sudden rise in COVID-19 cases across the country. This led to imposing lockdown like restrictions across the country and impacted the economic activity.
During the year, on account of the ongoing COVID-19 pandemic, the Company has incurred additional costs aggregating ? 307 million for the year ended 31st March 2022, relating to shifting of shooting locations to ensure uninterrupted operations.
The Company has assessed the impact of this pandemic and the same has been incorporated in the plans going forward. In addition to the aforesaid assessment and review of the current indicators of future economic conditions, the Company has also taken various steps aimed at augmenting liquidity, conserving cash including various cost saving initiatives, and sale of non-core and other assets.
Based on the assessment and steps being taken, the Company expects no further adjustments to the carrying amounts of the property plant and equipment, intangible assets (including goodwill), investments, receivables, inventory and other current assets as at 31st March 2022.
As a result of the growing uncertainties with respect to COVID-19, the impact of this pandemic may be different from that estimated as at the date of approval of these financial statements. The Company will continue to closely monitor any material changes to future economic condition.
is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the Management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates.
E) Fair value measurement of financial instruments
When the fair values of financials assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
F) Media content, including content in digital form
The Company has several types of inventory such as general entertainment, movies and music. Such inventories are expensed/ amortised based on certain estimates and assumptions made by Company, which are as follows:
I. Reality shows, chat shows, events, game shows and sports rights: are fully expensed on telecast/upload which represents best estimate of the benefits received from the acquired rights.
II. The cost of programme (own production and commissioned program) are amortised over a period of three financial years over which revenue is expected to be generated from exploitation of programmes.
III. Cost of movie rights - The Companyâs expectation is that substantial revenue from such movies is earned during the period of five years from the date of acquisition of license to broadcast/upload on digital platform. Hence, it is amortised on a straight line basis over the license period or sixty months from the date of acquisition/rights start date, whichever is shorter.
IV. Music rights are amortised over three financial years starting from the year of commencement of rights over which revenue is expected to be generated from exploitation of rights.
V. The cost of educational content acquired is amortised on a straight line basis over the license period or 60 months from the date of acquisition/right start date, whichever is shorter.
VI. Films produced and/or acquired for distribution/sale of rights:
Cost is allocated to each right based on management estimate of revenue. Film rights are amortised as under:
a) Satellite rights - Allocated cost of right is expensed immediately on sale.
b) Theatrical rights - Amortised in the month of theatrical release.
c) I ntellectual Property Rights (IPRs) - Allocated cost of IPRs are amortised over 5 years from release of film.
d) Music and Other Rights - allocated cost of each right is expensed immediately on sale.
G) Estimation of uncertainties relating to the global health pandemic from Corona virus (COVID-19)
The outbreak of the Corona virus (COVID-19) pandemic has spread globally and in India, which has affected economic activities. The
Mar 31, 2021
FORMING PART OF THE FINANCIAL STATEMENTS Zee Entertainment Enterprises Limited (âZEELâ or âthe Company) is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The registered office of the Company is 18th floor, A Wing, Marathon Futurex, N. M. Joshi Marg, Mumbai 400013, India. The Company is mainly in the following businesses: a. Broadcasting of Satellite Television Channels and digital media; b. Space Selling agent for other satellite television channels; c. Sale of Media Content i.e. programs / film rights / feeds / music rights; d. Movie production and distribution. 2. SIGNIFICANT ACCOUNTING POLICIES a) Statement of compliance These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act. These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below. Previous year figures, where applicable, have been indicated in brackets. c) Business combination Business combinations have been accounted for using the acquisition method. The consideration transferred is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is achieved by the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Business combinations involving entities that are controlled by the group are accounted for using the pooling of interests method as follows: - The assets and liabilities of the combining entities are reflected at their carrying amounts. - No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to harmonise accounting policies. - The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve. - The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee. - The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves. - The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of combination. However, where the business combination had occured after that date, the prior period information is restated only from that date. Transaction costs that the Company incurs in connection with a business combination such as finderâs fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirerâs previously held equity interest in the acquiree (if any) over the net acquisition date amounts of the identifiable assets acquired and the liabilities assumed. In case of a bargain purchase, before recognising a gain in respect thereof, the Company determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognises any additional assets or liabilities that are identified in that reassessment. The Company then reviews the procedures used to measure the amounts that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Company recognises it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Company recognises the gain, after assessing and reviewing (as described above), directly in equity as capital reserve. When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments against goodwill or capital reserve, as the case may be. Measurement period adjustments are adjustments that arise from additional information obtained during the âmeasurement periodâ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at fair value at subsequent reporting dates with the corresponding gain or loss being recognised in the statement of profit and loss. When a business combination is achieved in stages, the Companyâs previously held equity interest in the acquiree is remeasured to its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off. d) Property, plant and equipment i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price and related expenses and for qualifying assets, borrowing costs are capitalised based on the Company''s accounting policy. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment. ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date. iii) Depreciation is recognised so as to write off the cost of assets (other than free hold land and capital work-in-progress) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each reporting period, with the effect of changes in estimate accounted for on a prospective basis. iv) The estimate of the useful life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc. The estimated useful life of items of property, plant and equipment is as mentioned below: Furniture and Fixtures - 5 years A Buildings - 60 years * Computers - 3 and 6 years * Equipment - 3 to 5 years a Plant and Machinery: a Gas Plant - 20 years Others - 5 to 10 years Vehicles - 5 yearsA * Useful life is as prescribed in Schedule II to the Companies Act, 2013 a Useful life is lower than as prescribed in Schedule II to the Companies Act, 2013 e) Right-of-use assets Right-of-use (ROU) assets are stated at cost, less accumulated depreciation and impairment loss, if any. The carrying amount of ROU assets is adjusted for remeasurement of lease liability, if any, in future. Cost of ROU assets comprises the amount of initial measurement of lease liability, lease payments made before the commencement date (net of incentives received), initial direct costs and present value of estimated costs of dismantling and restoration, if any. ROU assets are depreciated on straight line basis from the commencement date to the end of useful life of asset or lease term whichever is earlier. f) Investment property i) Investment property are properties (land or a building or part of a building or both) held to earn rentals and / or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any. ii) Depreciation on investment property is provided as per the useful life prescribed in Schedule II to the Companies Act, 2013. g) Non-current assets held for sale The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use and the sale is highly probable. Management must be committed to the sale, which should be expected within one year from the date of classification. For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded as met only when the asset is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets, its sale is highly probable; and it will genuinely be sold, not abandoned. The Company treats sale of the asset to be highly probable when: I. The appropriate level of management is committed to a plan to sell the asset, II. An active programme to locate a buyer and complete the plan has been initiated (if applicable), III. The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, IV. The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and V. Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Non-current assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised. Gains and losses on disposals of non-current assets are determined by comparing proceeds with carrying amounts and are recognised in the statement of profit and loss. h) Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purpose of impairment testing, goodwill is allocated to the respective cash generating units that is expected to benefit from the synergies of the combination. A cash generating unit 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 on a pro-rata basis, based on the carrying amount of each asset in the unit. Any impairment loss for the goodwill is recognised directly in the statement of profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. On the disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. i) Intangible assets Intangible assets with finite useful lives that are acquired are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives. The estimated useful life for intangible assets is 3 years. The estimated useful and amortisation method are reviewed at each reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis. Intangible assets acquired in a business combination: Intangible assets acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, the intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. j) Impairment of property, plant and equipment / right-of-use assets / other intangible assets / investment property The carrying amounts of the Company''s property, plant and equipment, right-of-use assets, other intangible assets and investment property are reviewed at each reporting date to determine whether there is any indication that those assets have suffered any impairment loss. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. An impairment loss is recognised in statement of profit and loss whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Reversal of an impairment loss is recognised immediately in the statement of profit and loss. k) Derecognition of property, plant and equipment / right-of-use assets / other intangible assets / investment property The carrying amount of an item of property, plant and equipment / right-of-use assets / other intangible assets / investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / right-of-use assets / intangible assets / investment property is deteremined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in the statement of profit and loss. l) Leases The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116 on âLeases''. For effects of application of Ind AS 116 on financial position, refer note 32. i. The Company as lessee: The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: - Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable; - Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; The amount expected to be payable by the lessee under residual value guarantees; - The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and - Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. The lease liability is presented as a separate line item in the balance sheet. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: - The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. - The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). - A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The Company did not make any such adjustments during the periods presented. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets is presented as a separate line item in the balance sheet. The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the âProperty, Plant and Equipmentâ policy. ii. The Company as a lessor: The Company enters into lease agreements as a lessor with respect to some of its investment properties. Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above. i. Media Content : Media content i.e. Programs, Film rights, Music rights (completed (commissioned / acquired) and under production) including content in digital form are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value of media content is less than its carrying amount, the difference is expensed. Programs, film rights, music rights are expensed / amortised as under : 1. Programs - reality shows, chat shows, events, game shows, etc. are fully expensed on telecast / upload. 2. Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast / upload, as per management estimate of future revenue potential. 3. Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter. 4. Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential. 5. Films produced and/or acquired for distribution/sale of rights: Cost is allocated to each right based on management estimate of revenue. Film rights are amortised as under : - Satellite rights - Allocated cost of right is expensed immediately on sale. - Theatrical rights - 80% of allocated cost is amortised immediately on theatrical release and balance allocated cost is amortised equally in following six months. - Intellectual Property Rights (IPRs) - Allocated cost of IPRs are amortised over 1 to 5 years subsequent to year in which film is released. - Music and Other Rights - Allocated cost of each right is expensed immediately on sale. Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis. o) Financial Instruments Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. i. Initial Recognition Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss. ii. Financial assets Financial assets are classified into the following specified categories: amortised cost, financial assets âat fair value through profit and lossâ (FVTPL), âFair value through other comprehensive incomeâ (FVTOCI). The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of cash flows. - Debt Instrument - 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. This category generally applies to trade and other receivables. A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met: (a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets. (b) The assetâs contractual cash flows represent solely payments of principal and interest. Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). However, the Company recognises interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the effective interest rate method. FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss. The Company subsequently measures all equity investments at fair value. Where the Companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Companyâs right to receive payment is established. Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with Ind AS 27 on âSeparate Financial Statementsâ. Derivative financial instruments are classified and measured at fair value through profit and loss. A financial asset is derecognised only when: i) The Company has transferred the rights to receive cash flows from the asset or the rights have expired or ii) The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. The Company measures the expected credit loss associated with its financial assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. - Financial liabilities measured at amortised cost: Financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit and loss. Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit and loss are carried in the financial statements at fair value with changes in fair value recognised in other income or finance costs in the statement of profit and loss. Lease liability associated with assets taken on lease (except shortterm and low value assets) is measured at the present value of lease payments to be made. Lease payments are discounted using the incremental rate of borrowing as the case may be. Lease payments comprise fixed payments in relation to the lease (less lease incentives receivable), variable lease payments, if any and other amounts (residual value guarantees, penalties, etc.) to be payable in future in relation to the lease arrangement. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss. The Company measures financial instruments such as debts and certain investments, at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - In the principal market for the asset or liability or - In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: - Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities. - Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. - Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. q) Provisions, contingent liabilities and contingent assets The Company recognises provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainities surrounding the obligation. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurance or non-occurance of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that the outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset. r) Revenue recognition Ind AS 115 on âRevenue from Contracts with Customersâ Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise. i. Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television / digital broadcasting service to subscribers. ii. Sale of media content - Revenue is recognised when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms. iii. Commission revenue - Commision of space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast. iv. Revenue from theatrical distribution of films is recognised over a period of time on the basis of related sales reports. v. Revenue from other services is recognised as and when such services are completed / performed. vi. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable. vii. Dividend income is recognised when the Company''s right to receive dividend is established. viii. Rent income is recognised on accrual basis as per the agreed terms on straight line basis. FORMING PART OF THE FINANCIAL STATEMENTS s) Retirement and other employee benefits Payments to defined contribution plans viz. government administered provident funds and pension schemes are recognised as an expense when employees have rendered service entitling them to the contributions. For defined retirement benefit plans in the form of gratuity and leave encashment, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: i. service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); ii. net interest expense or income; and iii. remeasurement The Company presents the first two components of defined benefit costs in statement of profit and loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. Short-term and other long-term employee benefits: A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date. t) Transactions in foreign currencies The functional currency of the Company is Indian Rupees (âRsâ). i. Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions. ii. Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise. iii. Non-monetary foreign currency items are measured in terms of historical cost in the foreign currency and are not retranslated. Tax expense comprises of current and deferred tax. i. Current tax: Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. ii. Deferred tax: Deferred tax is recognised 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 are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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 realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax for the year: Current and deferred tax are recognised in the statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. v) Earnings per share Basic earnings per share are calculated by dividing the net profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed by dividing the profit after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The Company recognises compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves. 3. KEY ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. 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. The key assumptions concerning the future and other key sources of estimating the uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below: The Companyâs tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions. b. Property, plant and equipment Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset. Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash-generating unit or groups of cash-generating units which are benefiting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent managementâs best estimate about future developments. In estimating the future cash flows / fair value less cost of disposal, the Company has made certain assumptions relating to the future customer base, future revenues, operating parameters, capital expenditure and terminal growth rate which the Company believes reasonably reflects the future expectation of these items. However, if these assumptions change consequent to change in future conditions, there could be further favorable / adverse effect on the recoverable amount of the assets. The assumptions will be monitored on periodic basis by the Company and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate. The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 âEmployee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. e. Fair value measurement of financial instruments When the fair values of financials assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. f. Media content, including content in digital form The Company has several types of inventory such as general entertainment, movies and music. Such inventories are expensed/ amortised based on certain estimates and assumptions made by Company, which are as follows: i. Reality shows, chat shows, events, game shows and sports rights: are fully expensed on telecast / upload which represents best estimate of the benefits received from the acquired rights. ii. The cost of program (own production and commissioned program) are amortised over a period of three financial years over which revenue is expected to be generated from exploitation of programs. iii. Cost of movie rights - The Companyâs expectation is that substantial revenue from such movies is earned during the period of five years from the date of acquisition of license to broadcast / upload on digital platform. Hence, it is amortised on a straight line basis over the license period or sixty months from the date of acquisition / rights start date, whichever is shorter. iv. Music rights are amortised over three financial years starting from the year of commencement of rights over which revenue is expected to be generated from exploitation of rights. v. Films produced and / or acquired for distribution / sale of rights: Cost is allocated to each right based on management estimate of revenue. Film rights are amortised as under : - Satellite rights - Allocated cost of right is expensed immediately on sale. - Theatrical rights - 80% of allocated cost is amortised immediately on theatrical release and balance allocated cost is amortised equally in following six months. - Intellectual Property Rights (IPRs) - Allocated cost of IPRs are amortised over 1 to 5 years subsequent to year in which film is released. - Music and Other Rights - Allocated cost of each right is expensed immediately on sale. g. Estimation of uncertainties relating to the global health pandemic from Corona virus (COVID-19) The outbreak of the Corona virus (COVID-19) pandemic has spread globally and in India, which has affected economic activities. The impact on the financial statements for the year ended 31 March 2021 is primarily due to restrictions caused by the COVID-19 on the business activities. Hence, the financial statements for the year ended 31 March 2021 are not strictly comparable with the financial statements of the earlier year. Since early March 2021, India has witnessed a second wave of COVID-19 with sudden rise in COVID-19 cases across the Country. This has again lead to imposing lockdown like restrictions across the country, which is likely to impact the economic activity. The Company has assessed the impact of this pandemic and the same has been incorporated in the plans going forward. In addition to the aforesaid assessment and review of the current indicators of future economic conditions, the Company has also taken various steps aimed at augmenting liquidity, conserving cash including various cost saving initiatives, and sale of non-core and other assets. Based on the assessment and steps being taken, the Company expects no further adjustments to the carrying amounts of the property plant and equipment, intangible assets (including goodwill), investments, receivables, inventory and other current assets as at 31 March 2021. As a result of the growing uncertainties with respect to COVID-19, the impact of this pandemic may be different from that estimated as at the date of approval of these financial statements. The Company will continue to closely monitor any material changes to future economic condition. 4. RECENT INDIAN ACCOUNTING STANDARDS (IND AS) a. Standards issued but not effective Ministry of Corporate Affairs (MCA) notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from 1 April 2021. b. Changes in accounting policies and adoption of new/revision in accounting standard: i. COVID-19 related rent concessions: Amendment to Ind AS 116 on âLeasesâ: The MCA issued amendments to Ind AS 116 on âLeasesâ, to provide lessees with an exemption from assessing whether a COVID-19 related rent concession is a lease modification. The amendments allowed the expedient to be applied to COVID-19 related rent concessions to payments originally due on or before 30 June 2021 and also require disclosure of the amount recognised in profit or loss to reflect changes in lease payments that arise from COVID-19 related rent concessions. The reporting period in which a lessee first applies the amendment, it is not required to disclose certain quantitative information required under Ind AS 8. The Company has not recognised any reversal of lease liability on account of COVID-19 related rent concessions in the statement of profit and loss for the year ended 31 March 2021 as
Mar 31, 2019
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 CORPORATE INFORMATION Zee Entertainment Enterprises Limited (''ZEEL'' or ''the Company'') is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The registered office of the Company is 18th floor, A Wing, Marathon Futurex, N. M. Joshi Marg, Mumbai 400013, India. The Company is mainly in the following businesses: a) Broadcasting of Satellite Television Channels and digital media; b) Space Selling agent for other satellite television channels; c) Sale of Media Content i.e. programs / film rights / feeds / music rights 2 SIGNIFICANT ACCOUNTING POLICIES a) Statement of compliance These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act. b) Basis of preparation of financial statements These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below. c) Business combination Business combinations have been accounted for using the acquisition method. The consideration transferred is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is achieved by the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Business combinations between entities under common control is accounted for at carrying value. Transaction costs that the Company incurs in connection with a business combination such as finder''s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirer''s previously held equity interest in the acquiree (if any) over the net acquisition date amounts of the identifiable assets acquired and the liabilities assumed. In case of a bargain purchase, before recognising a gain in respect thereof, the Company determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognises any additional assets or liabilities that are identified in that reassessment. The Company then reviews the procedures used to measure the amounts that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Company recognises it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Company recognises the gain, after assessing and reviewing (as described above), directly in equity as capital reserve. When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments against goodwill or capital reserve, as the case may be. Measurement period adjustments are adjustments that arise from additional information obtained during the ''measurement period'' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at fair value at subsequent reporting dates with the corresponding gain or loss being recognised in profit or loss. When a business combination is achieved in stages, the Company''s previously held equity interest in the acquiree is remeasured to its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off. d) Property, plant and equipment i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price and related expenses and for qualifying assets, borrowing costs are capitalised based on the Company''s accounting policy. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment. ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date. iii) Depreciation is recognised so as to write off the cost of assets (other than free hold land and capital work-in-progress) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each reporting period, with the effect of changes in estimate accounted for on a prospective basis. The estimate of the useful life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc. The estimated useful life of items of property, plant and equipment is as mentioned below: Furniture and Fixtures - 5 years ^ Buildings - 60 years * Computers - 3 and 6 years * Plant and Machinery A Gas Plant- 20 years Others - 5 to 10 years Equipment - 3 to 5 years A Vehicles - 5 years A * Useful life is as prescribed in Schedule II to the Companies Act, 2013 A Useful life is lower than as prescribed in Schedule II to the Companies Act, 2013 e) Investment property i) Investment property are properties (land or a building or part of a building or both) held to earn rentals and / or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any. ii)Depreciation on investment property is provided as per the useful life prescribed in Schedule II to the Companies Act, 2013. f) Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purpose of impairment testing, goodwill is allocated to the respective cash generating units that is expected to benefit from the synergies of the combination. A cash generating unit 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 on a pro-rata basis, based on the carrying amount of each asset in the unit. Any impairment loss for the goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. On the disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. g) Intangible assets Intangible assets with finite useful lives that are acquired are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives. The estimated useful life for intangible assets is 3 years. The estimated useful and amortisation method are reviewed at each reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis. Intangible assets acquired in a business combination: Intangible assets acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, the intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. h) Impairment of Property, plant and equipment / other intangible assets The carrying amounts of the Company''s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication that those assets have suffered any impairment loss. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. An impairment loss is recognised in statement of profit and loss whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Reversal of an impairment loss is recognised immediately in profit or loss. i) Derecognition of property, plant and equipment / other intangible assets / investment property The carrying amount of an item of property, plant and equipment/intangibles / investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is deteremined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in the statement of profit and loss. j) Leases i) Finance lease The Company as a lessee: 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. ii) Operating lease The Company as a lessee: Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Operating Lease payments / revenue are recognised on straight line basis over the lease period in the statement of profit and loss unless increase is on account of inflation. The Company as a lessor: Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. 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 recognised in the year in which such benefits accrue. k) Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above. I) Inventories i) Media Content: Media content i.e. Programs, Film rights, Music rights ((completed (commissioned / acquired) and under production)) including content in digital form are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value of media content is less than its carrying amount, the difference is expensed. Programs, film rights, music rights are expensed / amortised as under: 1. Programs - reality shows, chat shows, events, game shows and sports rights etc. are fully expensed on telecast / upload. 2. Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast / upload, as per management estimate of future revenue potential. 3. Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter. 4. Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential. ii) Raw Stock: Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis. m) Financial Instruments Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. i) Initial Recognition Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss. ii) Financial assets 1. Classification of financial assets Financial assets are classified into the following specified categories: amortised cost, financial assets ''at fair value through profit and loss'' (FVTPL), ''Fair value through other comprehensive income'' (FVTOCI). The classification depends on the Company''s business model for managing the financial assets and the contractual terms of cash flows. 2. Subsequent measurement - Debt Instrument - 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. This category generally applies to trade and other receivables. Fair value through other comprehensive income (FVTOCI): A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met: (a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets. (b) The asset''s contractual cash flows represent solely payments of principal and interest. Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). However, the Company recognises interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the effective interest rate method. Fair value through Profit and Loss (FVTPL): FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortised cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss. Equity investments: The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Company''s right to receive payment is established. Investment in subsidiaries, joint ventures and associates: Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with Ind AS 27 on ''Separate Financial Statements''. Derivative financial instruments: Derivative financial instruments are classified and measured at fair value through profit and loss. 3 Derecognition of financial assets A financial asset is derecognised only when: i) The Company has transferred the rights to receive cash flows from the asset or the rights have expired or ii) The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. 4 Impairment of financial assets The Company measures the expected credit loss associated with its financial assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk. iii Financial liabilities and equity instruments 1 Classification of debt or equity: Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 2 Subsequent Measurement: - Financial liabilities measured at amortised cost: Financial liabilities are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit and loss. -Financial liabilities measured at fair value through profit and loss(FVTPL): Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the nearterm. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit and loss are carried in the financial statements at fair value with changes in fair value recognised in other income or finance costs in the statement of profit and loss. 3 Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss. iv Fair value measurement The Company measures financial instruments such as debts and certain investments, at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - In the principal market for the asset or liability or - In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: - Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities. - Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. - Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. n) Borrowings and Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. o) Provisions, contingent liabilities and contingent assets The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainities surrounding the obligation. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurance or non-occurance of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that the outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset. p) Revenue recognition Ind AS 115 ''Revenue from Contracts with Customers'' The Companies (Indian Accounting Standards) Amendment Rules, 2018 issued by the Ministry of Corporate Affairs (MCA) notified Ind AS 115 "Revenue from Contracts with Customers" related to revenue recognition which replaces all existing revenue recognition standards and provide a single, comprehensive model for all contracts with customers. The revised standard contains principles to determine the measurement of revenue and timing of when it is recognised. Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise. i) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television broadcasting service to subscribers. ii) Sale of media content - Revenue is recognised when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms. iii) Commission revenue - Commision of space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast. iv) Revenue from other services is recognised as and when such services are completed / performed. v) Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable. vi) Dividend income is recognised when the Company''s right to receive dividend is established. vii) Rent income is recognised on accrual basis as per the agreed terms on straight line basis. q) Retirement and other employee benefits Payments to defined contribution plans viz. government administered provident funds and pension schemes are recognised as an expense when employees have rendered service entitling them to the contributions. For defined retirement benefit plans in the form of gratuity and leave encashment, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: i) service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); ii) net interest expense or income; and iii) remeasurement The Company presents the first two components of defined benefit costs in statement of profit and loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. Short-term and other long-term employee benefits: A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date. r) Transactions in foreign currencies i) The functional currency of the Company is Indian Rupees (Rs.) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions. ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise. iii) Non-monetary foreign currency items are measured in terms of historical cost in the foreign currency and are not retranslated. s) Accounting for taxes on income Tax expense comprises of current and deferred tax. i) Current tax: Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. ii) Deferred tax: Deferred tax is recognised 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 are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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 realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax for the year: Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. t) Earnings per share Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results are anti-dilutive. u) Share based payments The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves. 3. KEY ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of the Company''s financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. 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. The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below: a) Income taxes The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. b) Property, plant and equipment Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset. c) Impairment of Goodwill Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash-generating unit or groups of cash-generating units which are benefitting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management''s best estimate about future developments. In estimating the future cash flows / fair value less cost of disposal, the Company has made certain assumptions relating to the future customer base, future revenues, operating parameters, capital expenditure and terminal growth rate which the Company believes reasonably reflects the future expectation of these items. However, if these assumptions change consequent to change in future conditions, there could be further favorable / adverse effect on the recoverable amount of the assets. The assumptions will be monitored on periodic basis by the Company and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate. d) Defined Benefit Obligation The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with IND AS 19 ''Employee benefits'' over the period during which benefit is derived from the employees'' services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. e) Fair value measurement of financial instruments When the fair values of financials assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. f) Media Content, including content in digital form The Company has several types of inventory such as general entertainment, movies, and music. Such inventories are expensed/amortised based on certain estimates and assumptions made by Company, which are as follows: i) Reality shows, chat shows, events, game shows and sports rights: are fully expensed on telecast/upload which represents best estimate of the benefits received from the acquired rights. ii) The cost of program (own production and commissioned program) are amortised over a period of three financial years over which revenue is expected to be generated from exploitation of programs. iii) Cost of movie rights - The Company''s expectation is that substantial revenue from such movies is earned during the period of five years from the date of acquisition of license to broadcast / upload on digital platform. Hence, it is amortised on a straight line basis over the license period or sixty months from the date of acquisition, whichever is shorter. iv) Music rights are amortised over three financial years starting from the year of commencement of rights over which revenue is expected to be generated from exploitation of rights. 4. STANDARDS ISSUED BUT NOT YET EFFECTIVE On 30 March 2019, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2019, notifying Indian Accounting Standards (Ind AS) 116, "Leases", which is applicable to the Company w.e.f. 1 April, 2019. Ind AS 116 eliminates the current classification model for lessee''s lease contracts as either operating or finance leases and, instead, introduces a single lessee accounting model requiring lessees to recognize right-of-use assets and lease liabilities for leases with a term of more than twelve months. This brings the previous off-balance leases on the balance sheet in a manner largely comparable to current finance lease accounting. Ind AS 116 is effective for financial year beginning on or after 1 April 2019. The Company will adopt the standard for the financial year beginning 1 April 2019. Based on the preliminary assessment performed by the Group, the impact of application of the Standard is not expected to be material.
b) Basis of preparation of financial statements
m) Cash and cash equivalents
n) Inventories
ii. Raw Stock :
1. Classification of financial assets
2. Subsequent measurement
- Fair value through other comprehensive income (FVTOCI):
- Fair value through Profit and Loss (FVTPL):
- Equity investments:
- Investment in subsidiaries, joint ventures and associates:
- Derivative financial instruments:
3. Derecognition of financial assets
4. Impairment of financial assets
iii. Financial liabilities and equity instruments
1. Classification of debt or equity:
2. Subsequent measurement:
- Financial liabilities measured at fair value through profit and loss (FVTPL):
3. Derecognition of financial liabilities
iv. Fair value measurement
p) Borrowings and borrowing costs
u) Accounting for taxes on income
w) Share-based payments
a. Income-taxes
c. Impairment of goodwill
d. Defined benefit obligation
Mar 31, 2018
a. Statement of compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act) read with of the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.
b. Basis of preparation of financial statements
These financial statements have been prepared and presented under the historical cost convention, on the accural basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.
c. Business combination
Business combinations have been accounted for using the acquisition method.
The consideration transferred is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is achieved by the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.
Business combinations between entities under common control is accounted for at carrying value.
Transaction costs that the Company incurs in connection with a business combination such as finderâs fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirerâs previously held equity interest in the acquiree (if any) over the net acquisition date amounts of the identifiable assets acquired and the liabilities assumed.
In case of a bargain purchase, before recognising a gain in respect thereof, the Company determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognises any additional assets or liabilities that are identified in that reassessment. The Company then reviews the procedures used to measure the amounts that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Company recognises it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Company recognises the gain, after assessing and reviewing (as described above), directly in equity as capital reserve.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as a part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with the corresponding adjustments against goodwill or capital reserve, as the case may be. Measurement period adjustments are adjustments that arise from additional information obtained during the âmeasurement periodâ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at fair value at subsequent reporting dates with the corresponding gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, the Companyâs previously held equity interest in the acquiree is remeasured to its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off.
d. Property, plant and equipment
(i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price and related expenses and for qualifying assets, borrowing costs are capitalised based on the Companyâs accounting policy. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.
(ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.
(iii) Depreciation is recognised so as to write off the cost of assets (other than free hold land and capital work-in-progress) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each reporting period, with the effect of changes in estimate accounted for on a prospective basis.
The estimate of the useful life of the assets has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc. The estimated useful life of items of property, plant and equipment is as mentioned below:
Furniture and Fixtures - 5 years *
Buildings - 60 years *
Computers - 3 and 6 years *
Plant and Machinery *
Gas plant - 20 years Others - 5 to 10 years Equipment - 3 to 5 years *
Vehicles - 5 years *
* Useful life is as prescribed in Schedule II to the Companies Act, 2013 ^ Useful life is lower than as prescribed in Schedule II to the Companies Act, 2013
e. Investment property
(i) Investment property are properties (land or a building or part of a building or both) held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.
(ii) Depreciation on investment property is provided as per the useful life prescribed in Schedule II to the Companies Act, 2013.
f. Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any
For the purpose of impairment testing, goodwill is allocated to the respective cash generating units that is expected to benefit from the synergies of the combination.
A cash generating unit 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 on a pro-rata basis, based on the carrying amount of each asset in the unit. Any impairment loss for the goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On the disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
g. Intangible assets
Intangible assets with finite useful lives that are acquired are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives.
The estimated useful life for intangible assets is 3 years. The estimated useful and amortisation method are reviewed at each reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis.
Intangible assets acquired in a business combination:
Intangible assets acquired in a business combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, the intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
h. Impairment of Property, plant and equipment / other intangible assets
The carrying amounts of the Companyâs property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication that those assets have suffered any impairment loss. If there are indicators of impairment, an assessment is made to determine whether the assetâs carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment loss is recognised in statement of profit and loss whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Reversal of an impairment loss is recognised immediately in profit or loss.
i. Derecognition of property, plant and equipment / other intangibles / investment property
The carrying amount of an item of property, plant and equipment / intangibles / investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is deteremined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in the statement of profit and loss.
j. Leases
(i) Finance lease
The Company as a lessee:
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.
(ii) Operating lease
The Company as a lessee:
Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Operating Lease payments / revenue are recognised on straight line basis over the lease period in the statement of profit and loss account unless increase is on account of inflation.
The Company as a lessor:
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
k. Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
l. Inventories
(i) Media Content :
Media content i.e. Programs, Film rights, Music rights ((completed (commissioned / acquired) and under production)) including content in digital form are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value of media content is less than its carrying amount, the difference is expensed. Programs, film rights, music rights are expensed / amortised as under :
1. Programs - reality shows, chat shows, events, game shows and sports rights etc. are fully expensed on telecast / upload.
2. Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast / upload, as per management estimate of future revenue potential.
3. Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter.
4.Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential.
(ii) Raw Stock :
Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.
m. Financial Instruments
Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Initial Recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss.
(ii) Financial assets
(a) Classification of financial assets
Financial assets are classified into the following specified categories: amortised cost, financial assets âat fair value through profit and lossâ (FVTPL), âFair value through other comprehensive incomeâ (FVTOCI). The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of cash flows.
(b) Subsequent measurement
- Debt Instrument - 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. This category generally applies to trade and other receivables.
- Fair value through other comprehensive income (FVTOCI):
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.
(b) The assetâs contractual cash flows represent solely payments of principal and interest.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the effective interest rate method.
- Fair value through Profit and Loss (FVTPL):
âFVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.â
- Equity investments:
The Company subsequently measures all equity investments at fair value. Where the Companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Companyâs right to receive payment is established.
- Investment in subsidiaries, joint ventures and associates:
Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with Ind AS 27 on âSeparate Financial Statementsâ.
- Derivative financial instruments:
Derivative financial instruments are classified and measured at fair value through profit and loss.
(c) Derecognition of financial assets
A financial asset is derecognised only when:
(i) The Company has transferred the rights to receive cash flows from the asset or the rights have expired or
(ii)The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
(d) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
(iii) Financial liabilities and equity instruments
(a) Classification of debt or equity:
Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
- Equity instruments:
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Companyâs own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised on the purchase, sale, issue or cancellation of the Companyâs own equity instruments.
(b) Subsequent Measurement:
-Financial liabilities measured at amortised cost:
Financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss.
- Financial liabilities measured at fair value through profit and loss (FVTPL):
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit and loss are carried in the financial statements at fair value with changes in fair value recognized in other income or finance costs in the statement of profit and loss.â
(c) Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.
(d) Fair value measurement
The Company measures financial instruments such as debts and certain investments, at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
-Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
n. Borrowings and Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
o. Provisions, contingent liabilities and contingent assets
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainities surrounding the obligation. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurance or non-occurance of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that the outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.
p. Revenue recognition
Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise.
(i) Broadcasting revenue -
Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television broadcasting service to subscribers.
(ii) Sale of media content -
Revenue is recognised when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.
(iii) Commission revenue -
Commision of space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.
(iv) Revenue from other services is recognised as and when such services are completed / performed.
(v) Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable.
(vi) Dividend income is recognised when the Companyâs right to receive dividend is established.
(vii) Rent income is recognised on accrual basis as per the agreed terms on straight line basis.
q. Retirement and other employee benefits
Payments to defined contribution plans viz. government administered provident funds and pension schemes are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined retirement benefit plans in the form of gratuity and leave encashment, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
(i) service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
(ii) net interest expense or income; and
(iii)remeasurement
The Company presents the first two components of defined benefit costs in statement of profit and loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
Short-term and other long-term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages and salaries and annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
r. Transactions in foreign currencies
(i) The functional currency of the Company is Indian Rupees (Rs.)
Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.
(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.
(iii) Non-monetary foreign currency items are measured in terms of historical cost in the foreign currency and are not retranslated.
s. Accounting for taxes on income
Tax expense comprises of current and deferred tax.
(i) Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(ii) Deferred tax:
Deferred tax is recognised 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 are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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 realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year:
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
t. Earnings per share
Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results are anti-dilutive.
u. Share based payments
The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves.
Mar 31, 2017
a Basis of preparation
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (âActâ) read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
These financial statements for the year ended 31 March 2017 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended 31 March 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under Companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India.
The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2015 being the date of transition to Ind AS.
These financial statements have been prepared and presented under the historical cost convention, on the accural basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.
Reconciliations and descriptions of the effect of the transition has been summarized in note 51.
Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest millions as per the requirement of Schedule III, unless otherwise stated.
Current non-current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
b Property, plant and equipment
(i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Integrated Receiver Decoders (IRD) boxes are capitalised, when available for deployment.
(ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.
c Intangible assets
Intangible assets acquired or developed are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any. Intangible assets - channels includes expenses incurred on development of new television channels till the time it is ready for commercial launch.
d Depreciation / amortisation on property, plant and equipment / intangible assets
Depreciable amount for property, plant and equipment / intangible fixed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
(i) Depreciation on property, plant and equipment is provided on straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed lower than the life prescribed in Schedule II, based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc.
(ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.
(iii) I ntangible assets are amortised on straight line basis over their respective individual useful lives estimated by the management.
e Impairment of Property, plant and equipment / intangible assets
The carrying amounts of the Companyâs property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there are indicators of impairment, an assessment is made to determine whether the assetâs carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment is recognised in statement of profit and loss whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of net selling price, defined as the fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and risks specific to the asset.
An impairment loss for an individual asset or cash generating unit are reversed if there has been a change in estimates used to determine the recoverable amount since the last impairment loss was recognised and is only reversed to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment loss are recognised in the statement of profit and loss.
f Investment property
investment property are properties (land or a buildingâor part of a buildingâ or both) held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.
Derecognition of property, plant and equipment / intangibles / investment property
The carrying amount of an item of property, plant and equipment / intangibles / investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is derecognised.
g Leases
(i) Finance lease
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.
(ii) Operating lease
Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Operating Lease payments / revenue are recognised on straight line basis over the lease period in the statement of profit and loss account unless increase is on account of inflation.
h Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
i Inventories
(i) Media Content :
Media content i.e.Programs,Film rights,Music rights ((completed (commissioned / acquired) and under production)) are stated at lower of cost / unamortised cost or realisable value. Cost comprises acquisition / direct production cost. Where the realisable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is expensed as impairment. Programs, film rights, music rights are expensed / amortised as under :
1 Programs - reality shows, chat shows, events, current affairs, game shows and sports rights etc. are fully expensed on telecast.
2 Programs (other than (1) above) are amortised over three financial years starting from the year of first telecast, as per management estimate of future revenue potential.
3 Film rights are amortised on a straight-line basis over the licensed period or sixty months from the commencement of rights, whichever is shorter,
4 Music rights are amortised over three financial years starting from the year of commencement of rights, as per management estimate of future revenue potential.
(ii) Raw Stock : Tapes are valued at lower of cost or estimated net realisable value. Cost is taken on weighted average basis.
j Financial Instruments
Financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Initial Recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.
(ii) Subsequent Measurement Financial assets
Financial assets are classified into the following specified categories: amortised cost, financial assets âat fair value through profit and lossâ (FVTPL), âFair value through other comprehensive incomeâ (FVTOCI). The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of cash flows.
Debt Instrument
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. This category generally applies to trade and other receivables.
Fair value through other comprehensive income (FVTOCI)
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
a The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.
b The assetâs contractual cash flows represent solely payments of principal and interest.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI), However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method,
Fair value through Profit and Loss (FVTPL)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ),
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss,
Equity investments
The Company subsequently measures all equity investments at fair value. Where the Companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognised in statement of profit and loss as other income when the Companyâs right to receive payment is established,
Investment in subsidiaries, joint ventures and associates
Investment in subsidiaries, joint ventures and associates are carried at cost less impairment loss in accordance with IND AS 27 on ""Separate Financial Statements"". Refer note 6 for list of investments,
Derivative financial instruments
Derivative financial instruments are classified and measured at fair value through profit and loss.
Derecognition of financial assets
A financial asset is derecognised only when
i) The Company has transferred the rights to receive cash flows from the asset or the rights have expired or
ii) The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business enviornment in which the entity operates or any other appropriate basis, The impairment methodology applied depends on whether there has been a significant increase in credit risk.
Financial liabilities and equity instruments
Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument,
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs,
Repurchase of the Companyâs own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised on the purchase, sale, issue or cancellation of the Companyâs own equity instruments,
Financial liabilities Subsequent Measurement
Financial liabilities measured at amortised cost
Financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss.
Financial liabilities measured at fair value through profit or loss (FVTPL) Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL, Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit or loss are carried in the financial statements at fair value with changes in fair value recognized in other income or finance costs in the statement of profit and loss.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.
Determination of fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date.
i n determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.
k Borrowings and Borrowing costs
Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the EIR.
Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised as finance costs in the Statement of Profit and Loss.
Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur,
l Provisions, contingent liabilities and contingent assets
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of 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.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realisation of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.
m Revenue recognition
Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. All revenues are accounted on accrual basis except to the extent stated otherwise.
(i) Broadcasting revenue - Advertisement revenue (net of discount and volume rebates) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue (net of share to broadcaster) is recognised on time basis on the provision of television broadcasting service to subscribers.
(ii) Sales - Media content is recognised, when the significant risks and rewards have been transferred to the customers in accordance with the agreed terms.
(iii) Services
Commission-Space selling is recognised when the related advertisement or commercial appears before the public i.e. on telecast.
(iv) Revenue from other services is recognised as and when such services are completed / performed.
(v) Interest income from debt instruments is recognised using the effective interest rate (EIR) method.
(vi) Dividend income is recognised when the Companyâs right to receive dividend is established.
(vii) Rent income is recognised on accural basis as per the agreed terms on straight line basis.
n Retirement and other employee benefits
(i) The Company operates both defined benefit and defined contribution schemes for its employees.
For defined contribution schemes the amount charged as expense is equal to the contributions paid or payable when employees have rendered services entitling them to the contributions.
For defined benefit plans, actuarial valuations are carried out at each balance sheet date using the Projected Unit Credit Method. All such plans are unfunded.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/ (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability/ (asset) comprising actuarial gains and losses (excluding interest on the net defined benefit liability/ (asset)) are recognised in Other Comprehensive Income (OCI). Such remeasurements are not reclassified to the statement of profit and loss, in the subsequent periods.
(ii) Other long term employee benefits: The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.
The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond twelve months, the same is presented as non-current liability.
(iii) Short term employee benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability.
o Transactions in foreign currencies
(i) The functional currency of the Company is Indian Rupees ("Rs.").
Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.
(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.
(iii) Non-monetary foreign currency items are carried at historical cost and translated at the exchange rate prevelant at the date of the transaction.
p Accounting for taxes on income
Tax expense comprises of current and deferred tax.
(i) Current tax
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity.
(ii) Deferred tax
Deferred tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Presentation of current and deferred tax
Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except to the extent they relate to items are recognized in other comprehensive income, in which case, the current and deferred tax income / expense are recognised in other comprehensive income.
(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.
q Earnings per share
Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.
r Share based payments
The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share based payment reserves.
s Business Combinations
Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations.
The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.
Business combinations between entities under common control is accounted for at carrying value,
Transaction costs that the Company incurs in connection with a business combination such as finderâs fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred."
t Dividend
Provision is made for the amount of any dividend declared on or before the end of the reporting period but remaining undistributed at the end of the reporting period, where the same has been appropriately authorised and is no longer at the discretion of the entity.
u Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
v Exceptional items
Certain occassions, the size, type, or incidences of the item of income or expenses pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expenses is classified as an exceptional item and accordingly, disclosed in the financial statements.
Critical accounting judgment and estimates
The preparation of financial statements requires management to exercise judgment in applying the Companyâs accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including disclosure of contingent liabilities. Actual results may differ from these estimates, Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and in any future periods affected.
a Contingencies
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that have a low probability of crystallising or are very difficult to quantify reliably, are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. There can be no assurance regarding the final outcome of these legal proceedings.
b Useful lives and residual values
The Company reviews the useful lives and residual values of property, plant and equipment, investment property and intangible assets at each financial year end.
c Impairment testing
i Judgment is also required in evaluating the likelihood of collection of customer debt after revenue has been recognised. This evaluation requires estimates to be made, including the level of provision to be made for amounts with uncertain recovery profiles. Provisions are based on historical trends in the percentage of debts which are not recovered, or on more detailed reviews of individually significant balances,
ii Determining whether the carrying amount of these assets has any indication of impairment also requires judgment. If an indication of impairment is identified, further judgment is required to assess whether the carrying amount can be supported by the net present value of future cash flows forecast to be derived from the asset. This forecast involves cash flow projections and selecting the appropriate discount rate,
d Tax
i The Companyâs tax charge is the sum of the total current and deferred tax charges. The calculation of the Companyâs total tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process,
ii Accruals for tax contingencies require management to make judgments and estimates in relation to tax related issues and exposures,
iii The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. Where the temporary differences are related to losses, the availability of the losses to offset against forecast taxable profits is also considered. Recognition therefore involves judgment regarding the future financial performance of the particular legal entity or tax Company in which the deferred tax asset has been recognized.
e Fair value measurement
A number of Companyâs accounting policies and disclosures require the measurement of fair values, for both financial and non- financial assets and liabilities. When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
-Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices),
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of a fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of reporting year during which the change has occurred.
f Media Content
The Company has several types of programming inventory: movies, sports and general entertainment. The key area of accounting for inventory requiring judgment is the assessment of the appropriate nature over which programming inventory should be amortised. The key factors considered by the Company are as follows:
i Reality shows, chat shows, events, current affairs, game shows and sports rights: are fully expensed on telecast which represents best estimate of the benefits received from the acquired rights.
ii The cost of program (own production and commissioned program) are amortised over a period of three financial years over which revenue is expected to be generated from exploitation of programs.
iii Cost of movie rights - The Companyâs expectation is that substantial revenue from such movies is earned during the period of five years from the date of acquisition of license to broadcast. Hence, it is amortised on a straight line basis over the license period or 60 months from the date of acquisition, whichever is shorter.
iv Music rights are amortised over three financial years starting from the year of commencement of rights over which revenue is expected to be generated from exploitation of rights.
g Defined benefit obligation
The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 âEmployee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 24, âEmployee benefitsâ.
Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ and Ind AS 102, âShare-based payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2, âShare-based payment,â respectively. The amendments are applicable to the Company from 1 April 2017.
Amendment to Ind AS 7
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Amendment to Ind AS 102
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the âfair valuesâ, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. The Company is evaluating the requirements of the amendment and the impact on the financial statements is being evaluated.â
Mar 31, 2016
1 CORPORATE INFORMATION
Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is
incorporated in the State of Maharashtra, India and is listed on Bombay
Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The
Company is mainly in the following businesses:
(a) Broadcasting of Satellite Television Channels
(b) Space Selling agent for other satellite television channels
(c) Sale of Media Content i.e. programs/film rights/feeds/music rights
A BASIS OF PREPARATION
The financial statements are prepared on going concern basis in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP) and comply in all material aspects with its accounting
standards specified under Section 133 of the Companies Act, 2013 (Act)
read with Rule 7 of the Companies (Accounts) Rules 2014, the provisions
of the Act (to the extent notified) and guidelines issued by the
Securities and Exchange Board of India (SEBI). The financial statements
have been prepared on accrual basis and under the historical cost
convention. The accounting policies adopted in the preparation of the
financial statements are consistent with those of previous year
B USE OF ESTIMATES
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent liabilities as at the date of
financial statements and the reported amount of revenue and expenses
for the year. Actual results could differ from these estimates. Any
revision to such accounting estimate is recognised prospectively in
current and future periods
C TANGIBLE FIXED ASSETS
(i) Tangible fixed assets are stated at cost, less accumulated
depreciation and impairment loss, if any. The cost comprises purchase
price, borrowing costs if capitalisation criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Integrated Receiver Decoders (IRD) boxes are
capitalised, when available for deployment,
(ii) Capital work-in-progress comprises cost of tangible fixed assets
and related expenses that are not yet ready for their intended use at
the reporting date
D INTANGIBLE ASSETS
Intangible assets acquired or developed are measured on initial
recognition at cost and stated at cost less accumulated amortisation
and impairment loss, if any. Intangible Asset - channels include
expenses incurred on development of new television channels till the
time, it is ready for commercial launch
E BORROWING COSTS
Borrowing costs attributable to the acquisition or construction of
qualifying assets till the time such assets are ready for intended use
are capitalised as part of cost of the assets. All other borrowing
costs are expensed in the period they occur.
F IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
At each Balance Sheet date, the Company reviews the carrying amount of
assets to determine whether there is an indication that those assets
have suffered impairment loss. If any such indication exists, the
recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value
G DEPRECIATION /AMORTISATION ON TANGIBLE/ INTANGIBLE ASSETS
Depreciable amount for tangible / intangible fixed assets is the cost
of an asset, or other amount substituted for cost, less its estimated
residual value (i) Depreciation on tangible fixed assets is provided on
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013 except in respect of the following
categories of assets, where the life of the assets has been assessed
based on technical advice, taking into account the nature of the asset,
the estimated usage of the asset, the operating conditions of the
asset, past history of replacement etc.
Aircraft-15 years
Furniture and Fixtures - 5 years
Gas Plant - 20 years
Mobile Phones - 3 years
Plant and Machinery - 5-10 years
Vehicles - 5 years
(ii) Premium on Leasehold Land and Leasehold Improvements are amortised
over the period of Lease
(iii) Intangible assets are amortised over their respective individual
useful lives estimated by management,
H INVESTMENTS
(i) Investments, which are readily realisable and intended to be held
for not more than one year from the date on which such investments are
made, are classified as current investments. All other investments
including investment property are classified as long-term investments
(ii) Current investments are stated at lower of cost and fair market
value determined on an individual investment basis. Long-term
investments are stated at cost less provision for diminution other than
temporary in the value of such investments,
(iii) Investment property
Investment in land which is not intended to be occupied substantially
for use by or in the operations of the Company is classified as
Investment property and stated at cost. The cost comprises purchase
price, borrowing costs, if capitalisation criteria are met and directly
attributable cost of bringing the investment property to its working
condition for intended use
I TRANSACTIONS IN FOREIGN CURRENCIES
(i) Foreign currency transactions are accounted at the exchange rate
prevailing on the date of such transaction
(ii) Foreign currency monetary items are translated using the exchange
rate prevailing at the reporting date. Exchange differences arising on
settlement of monetary items or on reporting such monetary items at
rates different from those at which they were initially recorded during
the period, or reported in previous financial statements are recognised
as income or as expenses in the period in which they arise
iii) Non-monetary foreign currency items are carried at cost,
REVENUE RECOGNITION
Revenue is recognised to the extent it is probable that economic
benefits will flow to the Company and the revenue can be reliably
measured,
(i) Broadcasting revenue - Advertisement revenue (net of discount and
volume rebates) is recognised when the related advertisement or
commercial appears before the public i.e. on telecast. Subscription
revenue is recognised on time basis on the provision of television
broadcasting service to subscribers
(ii) Sales - Media content is recognised, when the significant risks
and rewards have been transferred to the customers in accordance with
the agreed terms
(iii) Services
Commission-Space selling is recognised when the related advertisement
or commercial appears before the public i.e. on telecast,
(iv) Revenue from other services is recognised as and when such
services are completed/performed,
(v) Interest income is recognised on a time proportion basis taking
into account amount outstanding and the applicable interest rate
(vi) Dividend income is recognised when the Company''s right to receive
dividend is established,
(vii) Rent income is recognised on accrued basis as per the agreed
terms
K INVENTORIES
(i) Media Content:
Media content i.e. Programs, Film rights, Music rights ((completed
(commissioned / acquired) and under production)) are stated at lower of
cost / unamortised cost or realisable value. Cost comprises acquisition
/ direct production cost. Where the realisable value on the basis of
its estimated useful economic life is less than its carrying amount,
the difference is expensed as impairment. Programs, film rights, music
rights are expensed / amortised as under
1 Programs - reality shows, chat shows, events, current affairs, game
shows and sports rights etc. are fully expensed on telecast,
2 Programs (other than (1) above) are amortised over three financial
years starting from the year of first telecast, as per management
estimate of future revenue potential
3 Film rights are amortised on a straight-line basis over the licensed
period or sixty months from the commencement of rights, whichever is
shorter,
4 Music rights are amortised over three financial years starting from
the year of commencement of rights, as per management estimate of
future revenue potential
(ii) Raw Stock: Tapes are valued at lower of cost or estimated net
realisable value. Cost is taken on weighted average basis,
L RETIREMENT AND OTHER EMPLOYEE BENEFITS
(i) Short-term employee benefits are expensed at the undiscounted
amount in the Statement of Profit and Loss in the year the employee
renders the service,
(ii) Post employment and other long-term employee benefits are
recognised as an expense in the Statement of Profit and Loss at the
present value of the amount payable determined using actuarial
valuation techniques in the year the employee renders the service.
Actuarial gains and losses are charged to the Statement of Profit and
Loss
(iii) Payment to defined contribution retirement benefit schemes are
recognised as an expense in the Statement of Profit and Loss, when due
M ACCOUNTING FOR TAXES ON INCOME
(i) Current Tax is determined as the amount of tax payable in respect
of taxable income as per the provisions of the Income Tax Act, 1961
(ii) Deferred tax is recognised, subject to consideration of prudence
in respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using relevant enacted tax rates and laws
(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws,
which give rise to future economic benefits in the form of adjustment
of future tax liability, is recognised as an asset only when, based on
convincing evidence it is probable that the future economic benefits
associated with it will flow to the Company and the assets can be
measured reliably.
N LEASES
(i) Finance lease
Assets acquired on long-term leases, which in economic terms constitute
investments financed on long-term basis i.e. Finance Lease are
capitalised and the corresponding lease liability is recorded at an
amount equal to the fair value of the leased asset at the inception of
the lease. Initial costs directly attributable to lease are recognised
with the asset under lease
(ii) Operating lease
Lease of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classified as operating leases
Lease payments / revenue under operating leases are recognised as
expense / income on accrual basis in accordance with the respective
lease agreements
0 EARNINGS PER SHARE
Basic earnings per share is computed and disclosed using the weighted
average number of equity shares outstanding during the period. Dilutive
earnings per share is computed and disclosed using the weighted average
number of equity and dilutive equity equivalent shares outstanding
during the period, except when the results would be anti-dilutive
P PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognised when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
These estimates are reviewed at each reporting date and adjusted to
reflect the current best estimates. Contingent liabilities are not
recognised but are disclosed in the financial statements. Contingent
assets are neither recognised nor disclosed in the financial statements
Mar 31, 2015
The financial statements are prepared on going concern basis in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP). GAAP comprises mandatory accounting standards as
prescribed under Section 133 of the Companies Act, 2013 (Act) read with
Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the
Act (to the extent notifed) and guidelines issued by the Securities and
Exchange Board of India (SEBI). The financial statements have been
prepared on accrual basis and under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those of previous year.
b Use of estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, on the date of the financial statements and the reported
amount of revenue and expenses for the period. Difference between the
actual results and estimates are recognised in the period in which the
results are known / materialised.
c Tangible fxed assets (i) Tangible fxed assets are stated at cost,
less accumulated depreciation and impairment loss, if any. The cost
comprises purchase price, borrowing costs if capitalisation criteria
are met and directly attributable cost of bringing the asset to its
working condition for the intended use. Integrated Receiver Decoders
(IRD) boxes are capitalised, when available for deployment.
(ii) Capital work-in-progress comprises cost of tangible fxed assets
and related expenses that are not yet ready for their intended use at
the reporting date.
d Intangible assets
Intangible assets acquired are measured on initial recognition at cost
and stated at cost less accumulated amortisation and impairment loss,
if any.
e Borrowing costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets till the time such assets are ready for intended use
are capitalised as part of cost of the assets. All other borrowing
costs are expensed in the period they occur.
f Impairment of tangible and intangible assets At each Balance Sheet
date, the Company reviews the carrying amount of assets to determine
whether there is an indication that those assets have suffered
impairment loss. If any such indication exists, the recoverable amount
of assets is estimated in order to determine the extent of impairment
loss. The recoverable amount is higher of the net selling price and
value in use, determined by discounting the estimated future cash flows
expected from the continuing use of the asset to their present value.
g Depreciation / Amortisation on tangible / intangible assets (i)
Depreciable amount for tangible fxed assets is the cost of an asset, or
other amount substituted for cost, less its estimated residual value.
Depreciation on tangible fxed assets is provided on straight- line
method as per the useful life prescribed in Schedule II to the
Companies Act, 2013 except in respect of the following categories of
assets, where the life of the assets has been assessed based on
technical advice, taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset,
past history of replacement etc. Aircraft - 15 years Furniture and
Fixtures - 5 years Gas Plant - 20 years Mobile Phones - 3 years Plant
and Machinery - 5-10 years Vehicles - 5 years.
(ii) Premium on Leasehold Land and Leasehold Improvements are amortised
over the period of Lease.
(iii) Intangible assets are amortised over their respective individual
estimated useful lives on a straight line basis.
h Investments
(i) Investments, which are readily realisable and intended to be held
for not more than one year from the date on which such investments are
made, are classifed as current investments. All other investments
including investment property are classifed as long-term investments.
(ii) Current investments are
stated at lower of cost and fair market value determined on an
individual investment basis. Long-term investments are stated at cost
less provision for diminution other than temporary in the value of such
investments.
(iii) Investment property
Investment in land which is not intended to be occupied substantially
for use by or in the operations of the Company is classifed as
Investment property and stated at cost. The cost comprises purchase
price, borrowing costs, if capitalisation criteria are met and directly
attributable cost of bringing the investment property to its working
condition for intended use.
i Transactions in foreign currencies
(i) Foreign currency transactions are accounted at the exchange rate
prevailing on the date of such transaction.
(ii) Foreign currency monetary items are translated using the exchange
rate prevailing at the reporting date. Exchange differences arising on
settlement of monetary items or on reporting such monetary items at
rates different from those at which they were initially recorded during
the period, or reported in previous financial statements are recognised
as income or as expenses in the period in which they arise.
(iii) Non-monetary foreign Currency items are carried at cost.
j Revenue recognition
Revenue is recognised to the extent it is probable that economic
benefits will flow to the Company and the revenue can be reliably
measured.
(i) Broadcasting revenue -
Advertisement revenue (net of discount and volume rebates) is
recognised when the related advertisement or commercial appears before
the public i.e. on telecast. Subscription revenue is recognised on time
basis on the provision of television broadcasting service to
subscribers.
(ii) Sales - Media content is recognised, when the significant risks and
rewards have been transferred to the customers in accordance with the
agreed terms.
(iii) Services
Commission-Space selling is recognised when the related advertisement
or commercial appears before the public i.e. on telecast.
(iv) Revenue from other services is recognised as and when such
services are completed / performed.
(v) Interest income is recognised on a time proportion basis taking
into account amount outstanding and the applicable interest rate.
(vi) Dividend income is recognised when the Company''s right to receive
dividend is established.
k Inventories
(i) Media Content :
Media content i.e. Programs, Film rights, Music rights (completed
(commissioned / acquired) and under production) are stated at lower of
cost / unamortised cost or realisable value. Cost comprises
acquisition / direct production cost. Where the realisable value on
the basis of its estimated useful economic life is less than its
carrying amount, the difference is expensed as impairment. Programs,
flm rights, music rights are expensed / amortised as under :
1 Programs - reality shows, chat shows, events, current affairs, game
shows and sports rights etc. are fully expensed on telecast.
2 Programs (other than (1) above) are amortised over three financial
years starting from the year of frst telecast, as per management
estimate of future revenue potential.
3 Film rights are amortised on a straight-line basis over the licensed
period or 60 months from the commencement of rights, whichever is
shorter.
4 Music rights are amortised over three financial years starting from
the year of commencement of rights, as per management estimate of
future revenue potential.
(ii) Raw Stock : Tapes are valued at lower of cost or estimated net
realisable value. Cost is taken on weighted average basis.
Retirement and other employee benefits
(i) Short-term employee
benefits are expensed at the undiscounted amount in the Statement of
Profit and Loss in the year the employee renders the service.
(ii) Post employment and other long-term employee benefits are
recognised as an expense in the Statement of Profit and Loss at the
present value of the amount payable determined using actuarial
valuation techniques in the year the employee renders the service.
Actuarial gains and losses are charged to the Statement of Profit and
Loss.
(iii) Payment to defned contribution retirement Benefit schemes are
recognised as an expense in the Statement of Profit and Loss, when due.
Accounting for taxes on income (i) Current Tax is determined as the
amount of tax payable in respect of taxable income as per the
provisions of the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence
in respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using relevant enacted tax rates and laws.
(iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws,
which give rise to future economic benefits in the form of adjustment of
future tax liability, is recognised as an asset only when, based on
convincing evidence, it is probable that the future economic benefits
associated with it will flow to the Company and the assets can be
measured reliably.
n Leases
(i) Finance lease
Assets acquired under Finance Lease are capitalised and the
corresponding lease liability is recorded at an amount equal to the
fair value of the leased asset at the inception of the lease. Initial
costs directly attributable to lease are recognised with the asset
under lease.
(ii) Operating lease
Lease of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classifed as operating leases.
Lease payments / revenue under operating leases are recognised as
expense / income on accrual basis in accordance with the respective
lease agreements.
o Earnings per share
Basic earnings per share is computed and disclosed using the weighted
average number of equity shares outstanding during the period. Dilutive
earnings per share is computed and disclosed using the weighted average
number of equity and dilutive equity equivalent shares outstanding
during the period, except when the results would be anti-dilutive.
p Provisions, contingent liabilities and contingent assets Provisions
involving substantial degree of estimation in measurement are
recognised when there is present obligation as a result of past events
and it is probable that there will be an outflow of resources. These
estimates are reviewed at each reporting date and adjusted to refect
the current best estimates. Contingent liabilities are not recognised
but are disclosed in the financial statements. Contingent assets are
neither recognised nor disclosed in the financial statements.
c) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.
1 each. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividend in Indian Rupees. The fnal
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
d) Terms / rights attached to Preference Shares
(i) 6% Cumulative Redeemable Non-Convertible Preference Shares - Listed
During the year ended 31 March 2014, the Company has issued
20,169,423,120 6% Cumulative Redeemable Non-Convertible Preference
Shares of Rs. 1 each by way of bonus in the ratio of 21 Bonus Preference
Shares of Rs. 1 each fully paid up for every one Equity share of Rs. 1 each
fully paid up and are listed on Bombay Stock Exchange (BSE) and
National Stock Exchange (NSE) in India.
The Company will redeem at par value, 20% of the total Bonus Preference
Shares allotted, every year from the fourth anniversary of the date of
allotment. The Company shall have an option to buy back the Bonus
Preference Shares fully or in parts at an earlier date(s) as may be
decided by the Board. Further, if on any anniversary of the date of
allotment beginning from the fourth anniversary, the total number of
Bonus Preference Shares bought back and redeemed cumulatively is in
excess of the cumulative Bonus Preference Shares required to be
redeemed till the said anniversary, then there will be no redemption on
that anniversary. At the 8th anniversary of the date of allotment, all
the remaining and outstanding Bonus Preference Shares shall be redeemed
by the Company.
The holders of Bonus Preference Shares shall have a right to vote only
on resolutions which directly affect their rights. The holders of Bonus
Preference Shares shall also have a right to vote on every resolution
placed before the Company at any meeting of the equity shareholders if
dividend or any part of the dividend has remained unpaid on the said
Bonus Preference Shares for an aggregate period of atleast two years
preceding the date of the meeting.
(ii) 6% Non-Cumulative Redeemable Non-Convertible Preference Shares -
Unlisted
The Company has issued and alloted 22,273,886 6% Non-Cumulative
Redeemable Non-Convertible Preference shares of Rs. 1 each fully paid up,
to the shareholders of Diligent Media Corporation Limited, pursuant to
the Scheme of Arrangement as referred in Note 43. These Preference
shares are redeemable at par at any time within three years from the
date of allotment. The preference shareholders shall be entitled to
vote only on resolutions which directly affect their rights.
b) Investments made
There are no investments by the Company other than those stated under
Note 9 and Note 12 in the Financial Statements.
d) Securities given
There are no securities given during the year.
25 Leases
A. Operating Leases:
(a) The Company has taken office, residential premises and plant and
machinery (including equipments) etc. under cancellable /
non-cancellable lease agreements that are renewable on a periodic basis
at the option of both the Lessor and the Lessee. The initial tenure of
the lease is generally from 11 months to 108 months.
(b) In respect of assets given under operating lease :
(i) The Company has given part of its buildings under cancellable
operating lease agreement. The initial term of the lease is for 11 to
36 months. (ii) The rental revenue for the year is Rs./Millions 108
(85).
Mar 31, 2014
1. CORPORATE INFORMATION
Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is
incorporated in the State of Maharashtra, India and is listed on Bombay
Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The
Company is mainly in the following businesses:
a) Broadcasting of Satellite Television Channels;
b) Space Selling agent for other satellite television channels;
c) Sale of Television Content i .e. programs / film rights / feeds;
d) Production and distribution of films.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
The financial statements are prepared on going concern basis in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP) and comply in all material respect with the accounting
standards notified under the Companies (Accounting Standards) Rules,
2006, (as amended) and the relevant provision of the Companies Act,
1956 read with general circular 8/2014 dated 4 April, 2014, issued by
the Ministry of Corporate Affairs. The financial statements have been
prepared on accrual basis and under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those of previous year.
b) Use of estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, on the date of the financial statements and the reported
amount of revenue and expenses for the period. Difference between the
actual results and estimates are recognised in the period in which the
results are known / materialised.
c) Tangible fixed assets
(i) Tangible fixed assets are stated at cost, less accumulated
depreciation and impairment loss, if any. The cost comprises purchase
price, borrowing cost if capitalisation criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Integrated Receiver Decoders (IRD) boxes are
capitalised, when available for deployment.
(ii) Capital work in progress comprises cost of fixed assets and
related expenses that are not yet ready for their intended use at the
reporting date.
d) Intangible assets
Intangible assets acquired are measured on initial recognition at cost
and stated at cost less accumulated amortisation and impairment loss,
if any.
e) Borrowing costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets till the time such assets are ready for intended use
are capitalised as part of cost of the asset. All other borrowing costs
are expensed in the period they occur.
f) Impairment of tangible and intangible assets
At each Balance Sheet date, the Company reviews the carrying amount of
assets to determine whether there is an indication that those assets
have suffered impairment loss. If any such indication exists, the
recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
g) Depreciation / Amortisation on tangible / intangible assets
(i) Depreciation on tangible fixed assets is provided on straight line
method at the rates specified in Schedule XIV to the Companies Act,
1956 except Aircraft on which depreciation is provided based on
estimated useful life of 15 years.
The rate of depreciation so derived is more than the rate prescribed
under Schedule XIV.
(ii) Premium on Leasehold Land and Leasehold Improvements are amortised
over the period of Lease.
(iii) Intangible assets are amortised on a straight line basis over the
economic useful life estimated by the management.
h) Investments
(i) Investments, which are readily realisable and intended to be held
for not more than one year from the date on which such investments are
made, are classified as current investments. All other investments
including investment property are classified as long-term investments.
(ii) Current investments are stated at lower of cost and fair market
value determined on an individual investment basis. Long-term
investments are stated at cost less provision for diminution other than
temporary in the value of such investments.
(iii) Investment property
Investment in land which is not intended to be occupied substantially
for use by or in the operations of the Company is classified as
Investment property. Investment properties are stated at cost. The
cost comprises purchase price, borrowing costs, if capitalisation
criteria are met and directly attributable cost of bringing the
investment property to its working condition for intended use.
i) Transactions in foreign currencies
(i) Foreign currency transactions are accounted at the exchange rate
prevailing on the date of such transactions.
(ii) Foreign currency monetary items are translated using the exchange
rate prevailing at the reporting date. Exchange differences arising on
settlement of monetary items or on reporting such monetary items at
rates different from those at which they were initially recorded during
the period, or reported in previous financial statements are recognised
as income or as expenses in the period in which they arise.
(iii) Non-monetary foreign currency items are carried at cost.
j) Revenue recognition
Revenue is recognised to the extent it is probable that economic
benefits will flow to the company and the revenue can be reliably
measured.
(i) Broadcasting revenue - Advertisement revenue (net of discount and
volume rebates) is recognised when the related advertisement or
commercial appears before the public i.e. on telecast. Subscription
revenue is recognised on time basis on the provision of television
broadcasting service to subscribers.
(ii) Sales - Television content (including Programs, Film Rights) is
recognised, when the significant risks and rewards have been
transferred to the customers in accordance with the agreed terms.
(iii) Services
1. Commission-Space selling is recognised when the related
advertisement or commercial appears before the public i.e. on
telecast.
2. Theatrical revenue from films is recognised on receipt of related
sale reports.
(iv) Revenue from other services is recognised as and when such
services are completed / performed.
(v) Interest income is recognised on a time proportion basis taking
into account amount outstanding and the applicable interest rate.
(vi) Dividend income is recognised when the Company''s right to receive
dividend is established.
k) Inventories
(i) Television Content for Broadcasting :
Television content i.e. Programs, Film rights (completed (commissioned
/ acquired) and under production) are stated at lower of cost /
unamortised cost or realisable value. Cost comprises acquisition
/direct production cost. Where the realisable value on the basis of
its estimated useful economic life is less than its carrying amount,
the difference is expensed as impairment. Programs, film rights are
expensed / amortised as under:
1. Programs - reality shows, chat shows, events, current affairs, game
shows and sports rights etc. are fully expensed on telecast.
2. Programs (other than (1) above) are amortised over three financial
years starting from the year of first telecast, as per management
estimate of future revenue potential.
3. Film rights are amortised on a straight-line basis over the
licensed period or 60 months from the commencement of rights, whichever
is shorter.
(ii) Films produced and / or acquired for distribution:
Cost is allocated to each right based on management estimate of
revenue. Costs of theatrical rights, satellite rights, music rights,
home video rights etc are amortised when sold / exploited and residual
rights are carried at lower of unamortised cost or net realisable
value.
1. Theatrical rights: 70% of allocated cost is amortised over three
months of theatrical release of films and balance 30% in subsequent
three quarters.
2. Satellite rights, music rights, home video rights etc: Allocated
cost of each right is expensed on sale and amortised on exploitation as
per (i) (3) above.
3. Negative rights : 90% of the cost is allocated and amortised as per
(1) and (2) above and 10% of the cost is allocated to Intellectual
Property Rights (IPR) and amortised over subsequent five years.
(iii) Raw Stock : Tapes are valued at lower of cost or estimated net
realisable value. Cost is taken on weighted average basis.
I) Retirement and other employee benefits
(i) Short-term employee benefits are expensed at the undiscounted
amount in the Statement of Profit and Loss in the year the employee
renders the service.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the Statement of Profit and Loss at the
present value of the amount payable determined using actuarial
valuation techniques in the year the employee renders the service.
Actuarial gains and losses are charged to the Statement of Profit and
Loss.
m) Accounting for taxes on income
(i) Current Tax is determined as the amount of tax payable in respect
of taxable income as per the provisions of the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence
in respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using relevant enacted tax rates and laws.
n) Leases
(i) Finance Lease
Assets acquired under Finance Lease are capitalised and the
corresponding lease liability is recorded at an amount equal to the
fair value of the leased asset at the inception of the lease. Initial
costs directly attributable to lease are recognised with the asset
under lease.
(ii) Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lesser are classified as operating leases.
Lease payments / revenue under operating leases are recognised as
expense / income on accrual basis in accordance with the respective
lease agreements.
o) Earnings per Share
Basic earnings per share is computed and disclosed using the weighted
average number of equity shares outstanding during the period. Dilutive
earnings per share is computed and disclosed using the weighted average
number of equity and dilutive equity equivalent shares outstanding
during the period, except when the results would be anti-dilutive.
p) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
These estimates are reviewed at each reporting date and adjusted to
reflect the current best estimates. Contingent Liabilities are not
recognised but are disclosed in the financial statements. Contingent
Assets are neither recognised nor disclosed in the financial
statements.
c) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.
1 each. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividend in Indian Rupees. The final
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company
after distribution of preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
d) Terms / rights attached to Redeemable Preference Shares
During the year, the Company has issued 20,169,423,120 6% Cumulative
Redeemable Non- Convertible Preference Shares of Rs. 1/- each by way of
bonus in the ratio of 21 Bonus Preference Shares of Rs. 1/- each fully
paid up for every one Equity share of Rs. 1/- each fully paid up and
listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
in India.
The Company will redeem at par value, 20% of the total Bonus Preference
Shares allotted, every year from the fourth anniversary of the date of
allotment. The Company shall have an option to buy back the Bonus
Preference Shares fully or in parts at an earlier date(s) as may be
decided by the Board. Further, if on any anniversary of the date of
allotment beginning from the fourth anniversary, the total number of
Bonus Preference Shares bought back and redeemed cumulatively is in
excess of the cumulative Bonus Preference Shares required to be
redeemed till the said anniversary then there will be no redemption on
that anniversary. At the 8th anniversary of the date of allotment, all
the remaining and outstanding Bonus Preference Shares shall be redeemed
by the Company.
The holders of Bonus Preference Shares shall have a right to vote only
on resolutions which directly affect their rights. The holders of Bonus
Preference Shares shall also have a right to vote on every resolution
placed before the Company at any meeting of the equity shareholders if
dividend or any part of the dividend has remained unpaid on the said
Bonus Preference Shares for an aggregate period of at least two years
preceding the date of the meeting.
h) Employees Stock Option Scheme (ESOP)
The Company has instituted an Employee Stock Option Plan (ESOP 2009) as
approved by the Board of Directors and Shareholders of the Company in
2009 for issuance of stock options convertible into equity shares not
exceeding in the aggregate 5% of the issued and paid up capital of the
Company as at 31 March, 2009 i.e. up to 21,700,355 equity shares of Rs. 1
each, to the employees of the Company as well as that of its
subsidiaries and also to Non-executive Directors including Independent
Directors of the Company at the market price determined as per the
Securities and Exchange Board of India (Employee Stock Options Scheme)
Guidelines, 1999 (SEBI (ESOS) Guidelines). The said scheme is
administered by the Remuneration Committee of the Board.
During the year ended 31 March, 2014, the Company did not grant any
stock options. The options earlier granted under the Scheme vested
during the year and these would be exercisable at any time within a
period of four years from each vesting and the equity shares arising on
exercise of options shall not be subject to any lock in.
The options were granted to the employees / directors at an exercise
price, being the latest market price as per the SEBI (ESOS) Guidelines.
In view of, there being no intrinsic value on the date of the grant
(being the excess of market price of share under the Scheme over the
exercise price of the option), the Company is not required to account
for the value of options as per the SEBI guidelines.
(b) In respect of assets given under operating lease :
(i) The Company has given part of its buildings under cancellable
operating lease agreement. The initial term of the lease is for 36
months.
(ii) The rental revenue for the year is Rs./millions 85 (77).
Mar 31, 2013
1 Basis of preparation
The financial statements are prepared under the historical cost
convention on going concern basis in accordance with Indian Generally
Accepted Accounting Principles (GAAP) and comply in all material
aspects with the Accounting Standards notified under the Companies
(Accounting Standards) Rules, 2006, the provisions of the Companies
Act, 1956 and guidelines issued by the Securities and Exchange Board of
India (SEBI). The Company follows the mercantile system of accounting
and recognises income and expenditure on accrual.
2 Use of estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, on the date of the financial statements and the reported
amount of revenue and expenses for the year. Difference between the
actual results and estimates are recognised in the period in which the
results are known / materialised.
3 Tangible fixed assets
(a) Tangible fixed assets are stated at cost, less accumulated
depreciation and impairment loss, if any. The cost comprises purchase
price, borrowing cost if capitalisation criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Integrated Receiver Decoders (IRD) boxes are
capitalised, when available for deployment.
(b) Capital work in progress comprises cost of fixed assets and related
expenses that are not yet ready for their intended use at the reporting
date.
4 Intangible assets
I ntangible assets acquired are measured on initial recognition at cost
and stated at cost less accumulated amortisation and impairment loss,
if any.
5 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as
part of the cost of respective asset. All other borrowing costs are
expensed in the year they occur.
6 Impairment of tangible and intangible assets
At each Balance Sheet date, the Company reviews the carrying amount of
assets to determine whether there is an indication that those assets
have suffered impairment loss. If any such indication exists, the
recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
7 Depreciation / Amortisation on tangible / intangible assets
(a) Depreciation on tangible fixed assets is provided on straight line
method at the rates specified in Schedule XIV to the Companies Act,
1956 except Aircraft on which depreciation is provided based on
estimated useful life of 15 years. The rate of depreciation so derived
is more than the rate prescribed under Schedule XIV
(b) Premium on Leasehold Land and Leasehold Improvements are amortised
over the period of Lease.
(c) Intangible assets are amortised on a straight line basis over the
economic useful life estimated by the management.
8 Investments
(a) Investments, which are readily realisable and intended to be held
for not more than one year from the date on which such investments are
made, are classified as current investments. All other investments
including investment property are classified as long-term investments.
(b) Current investments are stated at lower of cost and market value
determined on an individual investment basis. Long-term investments
are stated at cost less provision for diminution other than temporary
in the value of such investments.
(c) Investment property
I nvestment in land which is not intended to be occupied substantially
for use by or in the operations of the Company is classified as
Investment property. Investment properties are stated at cost. The cost
comprises purchase price, borrowing costs, if capitalisation criteria
are met and directly attributable cost of bringing the investment
property to its working condition for the intended use.
9 Transactions in foreign currencies
(a) Foreign currency transactions are accounted at the exchange rate
prevailing on the date of such transactions.
(b) Foreign currency monetary items are translated using the exchange
rate prevailing at the reporting date. Exchange differences arising on
settlement of monetary items or on reporting such monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements are recognised
as income or as expenses in the year in which they arise.
(c) Non-monetary foreign currency items are carried at cost.
10 Revenue recognition
(a) Broadcasting revenue - Advertisement revenue (net of discount and
volume rebates) is recognised when the related advertisement or
commercial appears before the public i.e. on telecast. Subscription
revenue is recognised on time basis on the provision of television
broadcasting service to subscribers.
(b) Sales (including Programs, Film Rights) is recognised, when the
significant risks and rewards have been transferred to the customers.
(c) Services
i Commission-Space selling is recognised when the related advertisement
or commercial appears before the public i.e. on telecast.
ii Theatrical revenue from films is recognised on receipt of related
sale reports.
(d) Revenue from other services is recognised as and when such services
are completed / performed.
(e) Interest income is recognised on a time proportion basis taking
into account principal outstanding and the applicable interest rate.
(f) Dividend income is recognised when the Company''s right to receive
dividend is established.
11 Inventories
(a) Television Content for Broadcasting :
Inventories includes Programs, Film rights (completed (commissioned /
acquired) and under production) are stated at lower of cost /
unamortised cost or realisable value. Cost comprises acquisition /
direct production cost. Where the realisable value on the basis of its
estimated useful economic life is less than its carrying amount, the
difference is expensed as impairment. Programs, film rights are
expensed / amortised as under:
i Programs - reality shows, chat shows, events, current affairs, game
shows and sports rights etc. are fully expensed on telecast.
ii Programs (other than (i) above) are amortised over three financial
years starting from the year of first telecast, as per management
estimate of future revenue potential.
iii Film rights are amortised on a straight-line basis over the
licensed period or 60 months from the commencement of rights, whichever
is shorter.
(b) Films produced and / or acquired for distribution:
Cost is allocated to each right based on management estimate of
revenue. Costs of theatrical rights, satellite rights, music rights,
home video rights etc are amortised when sold / exploited and residual
rights are carried at lower of unamortised cost or net realisable
value.
i Theatrical rights: 70% of allocated cost is amortised over three
months of theatrical release of films and balance 30% in subsequent
three quarters.
ii Satellite rights, music rights, home video rights etc: Allocated
cost of each right is expensed on sale and amortised on exploitation as
per (a) (iii) above.
iii Negative rights : 90% of the cost is allocated and amortised as per
(i) and (ii) above and 10% of the cost is allocated to Intellectual
Property Rights (IPR) and amortised over subsequent five years.
(c) Raw Stock : Tapes are valued at lower of cost or estimated net
realisable value. Cost is taken on weighted average basis.
12 Retirement and other employee benefits
(a) Short-term employee benefits are expensed at the undiscounted
amount in the Statement of Profit and Loss in the year the employee
renders the service.
(b) Post employment and other long term employee benefits are
recognised as an expense in the Statement of Profit and Loss at the
present value of the amount payable determined using actuarial
valuation techniques in the year the employee renders the service.
Actuarial gains and losses are charged to the Statement of Profit and
Loss.
13 Accounting for taxes on income
(a) Current Tax is determined as the amount of tax payable in respect
of taxable income as per the provisions of the Income Tax Act, 1961.
(b) Deferred tax is recognised, subject to consideration of prudence in
respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using relevant enacted tax rates and laws.
14 Leases
(a) Finance Lease
Assets acquired under Finance Lease are capitalised and the
corresponding lease liability is recorded at an amount equal to the
fair value of the leased asset at the inception of the lease. Initial
costs directly attributable to lease are recognised with the asset
under lease.
(b) Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Lease payments / revenue under operating leases are recognised as
expense / income on accrual basis in accordance with the respective
lease agreements.
15 Earnings Per Share
Basic earnings per share is computed and disclosed using the weighted
average number of equity shares outstanding during the year. Dilutive
earnings per share is computed and disclosed using the weighted average
number of equity and dilutive equity equivalent shares outstanding
during the year, except when the results would be anti-dilutive.
16 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2012
1 Basis of Preparation
these financial statements are prepared in accordance with indian
Generally Accepted Accounting principles (GAAp) under the historical
cost convention on accrual basis and comply in all material aspects
with the accounting standards notified under section 211 (3c),
companies(Accounting standards) rules, 2006, the provisions of the
companies Act, 1956 and guidelines issued by the securities and
exchange Board of india (sEBI).
2 Use of estimates
the preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, as of the date of the financial statements and the
reported amount of revenue and expenses of the year. Actual results
could differ from these estimates. Any revision to estimates is
recognised prospectively in current and future periods.
3 Tangible fixed assets
(a) tangible fixed assets are stated at cost, net of accumulated
depreciation and impairment losses, if any. cost include all expenses
incurred to bring the assets to its present location and condition.
(b) capital work in progress comprises cost of fixed assets and related
expenses that are not yet ready for their intended use at the reporting
date.
4 Intangible assets
intangible assets acquired are measured on initial recognition at cost.
intangible assets are carried at cost less accumulated amortisation and
impairment loss, if any.
5 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as
part of the cost of respective asset. All other borrowing costs are
expensed in the period they occur.
6 Impairment of tangible and intangible assets
At each Balance sheet date, the company reviews the carrying amount of
assets to determine whether there is an indication that those assets
have suffered impairment loss. if any such indication exists, the
recoverable amount of assets is estimated in order to determine the
extent of impairment loss. the recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
7 Depreciation / Amortisation on tangible and intangible assets
(a) Depreciation on tangible fixed assets is provided on straight Line
method at the rates specified in schedule XiV to the companies Act,
1956.
(b) premium on leasehold land and leasehold improvements are amortized
over the period of lease.
(c) intangible assets are amortised on a straight line basis over the
economic useful life estimated by the management.
8 Investments
(a) investments, which are readily realisable and intended to be held
for not more than one year from the date on which such investments are
made, are classified as current investments. All other investments
including investment property are classified as long-term investments.
(b) current investments are stated at lower of cost and fair value
determined on an individual investment basis. long-term investments are
stated at cost less provision for diminution other than temporary in
the value of such investments.
(c) investment property
investment in land which is not intended to be occupied substantially
for use by or in the operations of the company is classified as
investment property, investment properties are stated at cost. the cost
comprises purchase price, borrowing costs, if capitalisation criteria
are met and directly attributable cost of bringing the investment
property to its working condition for the intended use.
9 Transactions in foreign currencies
(a) Foreign currency transactions are accounted at the exchange rates
prevailing on the date of such transactions.
(b) Foreign currency monetary items are translated using the exchange
rates prevailing at the reporting date. Exchange difference are
recognised as income or expense in the period in which they arise.
(c) Non-monetary items denominated in foreign currency are carried at
cost.
10 Revenue recognition
(a) Broadcasting revenue - Advertisement revenue (net of agency
commission) is recognized when the related advertisement or commercial
appears before the public i.e. on telecast. subscription revenue is
recognized on completion of service.
(b) sales (includes licensing of Programs, Films / Movie Rights) are
recognized, when the delivery is completed.
(c) services
i commission-space selling is recognized when the related advertisement
or commercial appears before the public i.e. on telecast.
ii theatrical revenue from movies is recognized on receipt of related
sale reports.
(d) Dividend income is recognized when the company's right to receive
dividend is established.
(e) interest income is recognized on a time proportion basis taking
into account outstanding and the applicable interest rate.
(f) Revenue from other services are recognised as and when such
services are completed / performed.
11 Inventories
(a) programs, films / movie rights for Broadcasting :
programs, films / movie rights are carried at lower of unamortized cost
or realizable value. Where the realizable value on the basis of its
estimated useful economic life is less than its carrying amount, the
difference is expensed as impairment.
i cost of reality shows / chat shows / events/ game shows and sports
rights etc. are fully expensed on telecast.
ii cost of programs (other than (i) above) are amortized over three
financial years from the year of telecast as per management estimates
of future revenue potential.
iii cost of films/movie rights are charged on a straight-line basis
over the license period or 60 months from the date of acquisition,
whichever is shorter.
(b) films / movie produced and/or acquired for distribution:
cost is allocated to each rights based on management estimates of
revenues and amortization of costs of theatrical rights, satellite
rights, music rights, video rights and others are made when
sold/exploited and films/movie rights carried at lower of unamortized
cost or net realizable value.
i theatrical rights: 70% of allocated cost is amortized over three
months of theatrical release of movie and balance 30% in subsequent
three quarters.
ii satellite rights, music rights, Home Video rights etc: Allocated
cost of each right is expensed on sale.
iii Negative rights : 90% of the cost is allocated and amortized as per
b(i) and b(ii) above and 10% of the cost is allocated to intellectual
property rights (IpR) and amortized over subsequent five years.
(c) Work- in - progress: programs and films / movies under production
are stated at cost. cost comprises of raw stock, cost of services and
other expenses incurred upto the date of balance sheet.
(d) raw stock: tapes are valued at lower of cost or estimated net
realizable value. cost is taken on Weighted Average basis.
12 Retirement and other employee benefits
(a) short-term employee benefits are expensed at the undiscounted
amount in the statement of profit and Loss in the year employee renders
the service.
(b) post employment and other long term employee benefits are
recognized as an expense in the statement of profit and Loss at the
present value of the amount payable determined using actuarial
valuation techniques in the year the employee renders the service.
Actuarial gains and losses are charged to the statement of profit and
Loss.
13 Accounting for taxes on income
(a) current tax is determined as the amount of tax payable in respect
of taxable income as per the provisions of the income tax Act, 1961.
(b) Deferred tax is recognized, subject to consideration of prudence in
respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using relevant enacted tax rates and laws.
14 Leases
(a) finance Lease
Assets acquired under finance Lease are capitalized and the
corresponding lease liability is recorded at an amount equal to the
fair value of the leased asset at the inception of the lease. initial
costs directly attributable to lease are recognized with the asset
under lease.
(b) Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Lease payments/revenue under operating leases are recognized as
expense/income on accrual basis in accordance with the respective lease
agreements.
15 Earnings Per Share
Basic earnings per share is computed and disclosed using the weighted
average number of equity shares outstanding during the year. Dilutive
earnings per share is computed and disclosed using the weighted average
number of equity and dilutive equity equivalent shares outstanding
during the year, except when the results would be anti-dilutive.
16 Provisions, Contingent Liabilities and Contingent Assets
provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
contingent Liabilities are not recognized but are disclosed in the
notes. contingent Assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2011
1. Basis of Accounting
The Financial statements have been prepared under the historical Cost
Convention and on accrual basis in accordance with the accounting
standards referred to in section 211 (3C) of the Companies act, 1956.
2. Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, as of the date of the financial statements and the
reported amount of revenue and expenses of the year. actual results
could differ from these estimates. any revision to estimates is
recognized prospectively in current and future periods.
3. Fixed Assets
a) Fixed assets are stated at original cost of acquisition/
installation net of accumulated depreciation, amortization and
impairment losses. The cost of fixed assets includes taxes, duties,
freight and other incidental expenses related to the acquisition and
installation of the respective assets.
b) Capital Work in progress is stated at the amount expended upto the
date of Balance sheet including advances for capital expenditure.
c) Computer software including implementation expenses (intangible
asset) is capitalized as an intangible asset in the year in which
related software is implemented.
4. Borrowing Costs
Borrowing Costs attributable to the acquisition or construction of
qualifying assets are capitalized as a part of the cost of such assets.
all other borrowing costs are charged to revenue.
5. Impairment of Assets
at each Balance sheet date, the Company reviews the carrying amount of
fixed assets to determine whether there is an indication that those
assets have suffered impairment loss. If any such indication exists,
the recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
6. Depreciation/Amortization
a) depreciation on fixed assets is provided on straight Line Method at
the rate specified in schedule XIV to the Companies act, 1956.
b) premium on Leasehold Land and Leasehold Improvements are amortized
over the period of Lease.
c) Computer software (intangible assets) is amortized on straight line
basis over a period of 36 months from the date of its implementation
based on the management estimate of useful life.
7. Investments
a) Long Term Investments are carried at cost. provision is made for
diminution in value of these investments other than temporary, wherever
required.
b) Current Investments are carried at cost or fair value, whichever is
lower.
8. Transaction in Foreign Currencies
a) Foreign currency transactions are accounted at the exchange rates
prevailing on the date of such transactions.
b) Foreign currency monetary assets and liabilities at the Balance
sheet date are translated at the closing rate. Gain and losses
resulting on settlement/translation of monetary assets and liabilities
are recognized in the profit and Loss account.
c) non-monetary items denominated in foreign currency are carried at
cost.
d) In respect of forward exchange contracts assigned to the foreign
currency assets/ liabilities, the difference due to change in exchange
rate between the inception of forward contract and date of the Balance
sheet is recognized in the profit and Loss account. any profit or loss
resulting on settlement/ cancellation of forward contract is recognized
as income or as expense in the year it arises.
9. Revenue Recognition
a) Broadcasting revenue - advertisement revenue (net of agency
commission) is recognized when the related advertisement or commercial
appears before the public i.e. on telecast. subscription revenue is
recognized on completion of service.
b) sales (includes licensing of programs, Movies and rights) are
recognized when the delivery is completed.
c) services
i. Commission-space selling is recognized when the related
advertisement or commercial appears before the public i.e. on telecast.
ii. Theatrical revenue from movies is recognized on receipt of related
sale reports.
d) dividend is recognized when the right to receive the dividend is
unconditional.
e) sMs revenue is recognized on the basis of the counts generated by
the computer software.
10. Inventories:
a) Programs ,Movie and Rights :
Programs ,Movie and rights are carried at lower of unamortized cost or
realizable value. Where the realizable value on the basis of its useful
economic life is less than its carrying amount, the difference is
expensed as impairment.
i. Cost of reality shows / chat shows / events/ game shows and sports
rights etc. are fully expensed on telecast.
ii. Cost of programs (other than (i) above) are amortized over three
financial years from the year of telecast as per management estimates
of future revenue potential.
iii. Cost of Movie rights are charged on a straight-line basis over
the license period or 60 months from the date of acquisition, whichever
is shorter.
b) Movie produced and acquired for distribution:
Cost is allocated to each rights based on management estimates of
revenues from each of these rights and amortization of costs of rights
of domestic theatrical, International theatrical rights, television
rights, music rights, video rights and others are made when sold and
movies carried at lower of unamortized cost or net realizable value.
i. Theatrical rights: - 70% cost is allocated and amortized over three
months of theatrical release of movie and balance 30% in subsequent
three quarters.
ii. allocated cost of satellite rights, Music rights, home Video
rights etc are expensed on sale.
iii. In case of negative rights of movies 90% of cost is amortized as
per b(i) above and 10% allocated to Ipr is amortized over subsequent
nine years.
c) Work- in à progress- programs and movies under production are stated
at cost. Cost comprises of material cost, cost of services and other
expenses incurred upto the date of balance sheet.
d) raw stock à Tapes are valued at lower of cost or estimated net
realizable value. Cost is taken on First in First out (FIFO) basis.
e) education Materials/ equipments are valued at lower of cost or
estimated net realizable value. Cost means average cost
11. Retirement Benefits
a) short-term employee benefits are expensed at the undiscounted amount
in the profit and loss account in the year employee renders the
service.
b) post employment and other long term employee benefits are expensed
in the profit and loss account in the year the employee render the
service. The expense is recognized at the present value of the amount
payable determined using actuarial valuation techniques. actuarial
gains and losses in respect of post employment and other long term
benefits are charged to the profit and loss account.
12. Accounting for Taxes on Income
a) Current Tax is determined as the amount of tax payable in respect of
taxable income for the year as per the provisions of the Income Tax
act, 1961.
b) deferred tax is recognized, subject to consideration of prudence in
respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using tax rates and laws enacted.
13. Leases
a) Finance Lease assets acquired under Finance Lease are capitalized
and the corresponding lease liability is recorded at an amount equal to
the fair value of the leased asset at the inception of the lease.
Initial costs directly attributable to lease are recognized with asset
under lease.
b) Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Lease payments/revenue under operating leases are recognized as
expense/income on accrual basis in accordance with the respective lease
agreements.
14. Miscellaneous Expenditure preliminary expenses are amortized over
a period of ten years.
15. Earnings per Share
Basic earnings per share is computed and disclosed using the weighted
average number of common shares outstanding during the year. dilutive
earnings per share is computed and disclosed using the weighted average
number of common and dilutive common equivalent shares outstanding
during the year, except when the results would be anti-dilutive.
16. Provisions, Contingent Liabilities and Contingent Assets
provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes to accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
Mar 31, 2010
1. Basis of Accounting
The Financial Statements have been prepared under the Historical Cost
Convention and on accrual basis in accordance with the accounting
standards referred to in Section 211 (3C) of the Companies Act, 1956.
2. Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, as of the date of the financial statements and the
reported amount of revenue and expenses of the year. Actual results
could differ from these estimates. Any revision to estimates is
recognized prospectively in current and future periods.
3. Fixed Assets
a) Fixed assets are stated at original cost of acquisition/
installation net of accumulated depreciation, amortization and
impairment losses. The cost of fixed assets includes taxes, duties,
freight and other incidental expenses related to the acquisition and
installation of the respective assets.
b) Capital Work in progress is stated at the amount expended upto the
date of Balance sheet including advances for capital expenditure.
c) Computer software including implementation expenses (intangible
asset) is capitalized as an intangible asset in the year in which
related software is implemented.
4. Borrowing Costs
Borrowing Costs attributable to the acquisition or construction of
qualifying assets are capitalized as a part of the cost of such assets.
All other borrowing costs are charged to revenue.
5. Impairment of Assets
At each Balance Sheet date, the Company reviews the carrying amount of
fixed assets to determine whether there is an indication that those
assets have suffered impairment loss. If any such indication exists,
the recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
6. Depreciation/Amortization
a) Depreciation on fixed assets is provided on Straight Line Method at
the rate specified in Schedule XIV to the Companies Act, 1956.
b) Premium on Leasehold Land and Leasehold Improvements are amortized
over the period of Lease.
c) Computer Software (intangible assets) is amortized on straight line
basis over a period of 36 months from the date of its implementation
based on the management estimate of useful life.
7. Investments
a) Long Term Investments are carried at cost. Provision for diminution
in value of these investments other than temporary is made , wherever
required.
b) Current Investments are carried at cost or fair value whichever is
lower.
8. Transaction in Foreign Currencies
a) Foreign currency transactions are accounted at the exchange rates
prevailing on the date of such transactions.
b) Foreign currency monetary assets and liabilities at the Balance
Sheet date are translated at the closing rate. Gain and losses
resulting on settlement/translation of monetary assets and liabilities
are recognized in the Profit and Loss Account.
c) Non-monetary items denominated in foreign currency are carried at
cost.
d) In respect of forward exchange contracts assigned to the foreign
currency assets/ liabilities, the difference due to change in exchange
rate between the inception of forward contract and date of the Balance
Sheet is recognized in the Profit and Loss Account. Any profit or loss
resulting on settlement/ cancellation of forward contract is recognized
as income or as expense in the year it arises.
9. Revenue Recognition
a) Broadcasting revenue - Advertisement revenue (net of agency
commission) is recognized when the related advertisement or commercial
appears before the public i.e. on telecast. Subscription revenue is
recognized on completion of service.
b) Sales (includes licensing of TV Programs and movies ) are recognized
when the delivery is completed.
c) Services
i. Commission-Space selling is recognized when the related
advertisement or commercial appears before the public i.e. on telecast.
ii. Theatrical revenue from movies is recognized on receipt of reports
d) Dividend is recognized when the right to receive the dividend is
unconditional.
10. Inventories
a) TV Programs and Movie rights (Produced and acquired):
TV Programs and movie rights are carried at lower of unamortized cost
or realizable value. Where the realizable value on the basis of its
useful economic life is less than its carrying amount, the difference
is expensed as impairment.
i. Cost of reality shows / chat shows / events/ game shows etc. are
fully expensed on telecast.
ii. TV Programs (other than (i) above) are amortized over three
financial years from the year of telecast as per management estimates
of future revenue potential.
iii. Movie rights are amortized on a straight-line basis over the
license period or 60 months from the date of purchase whichever is
shorter.
b) Movie produced and acquired for distribution:
The amortization pertaining to domestic theatrical, International
theatrical rights, television rights, music rights, video rights and
others are made, based on management estimates of revenues from each of
these rights
i. Theatrical rights: - 70% cost is amortized over three months of
theatrical release of movie and balance 30% in subsequent three
quarters.
ii. Satellite rights, Music rights, Home Video rights etc are expensed
on sale.
iii. In case of Negative rights of movies 90% of cost is amortized as
per b(i) above and 10% allocated to IPR is amortized over subsequent
nine years.
c) TV programs and movies under production are stated at cost. Cost
comprises of material cost, cost of services and other expenses
incurred upto the date of balance sheet.
d) Raw Stock - Tapes are valued at lower of cost or estimated net
realizable value. Cost is taken on First in First out (FIFO) basis.
e) Educational Materials/ Equipments are valued at lower of cost or
estimated net realizable value. Cost means average cost.
11. Retirement Benefits
a) Short-term employee benefits are expensed at the undiscounted amount
in the profit and loss account in the year employee renders the
service.
b) Post employment and other long term employee benefits are expensed
in the profit and loss account in the year the employee render the
service. The expense is recognized at the present value of the amount
payable determined using actuarial valuation techniques. Actuarial
gains and losses in respect of post employment and other long term
benefits are charged to the profit and loss account.
12. Accounting for Taxes on Income
a) Current Tax is determined as the amount of tax payable in respect of
taxable income for the year as per the provisions of the Income Tax
Act, 1961.
b) Deferred tax is recognized, subject to consideration of prudence in
respect of deferred tax asset, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods and measured using tax rates and laws enacted.
13. Leases
a) Finance Lease
Assets acquired under Finance Lease are capitalized and the
corresponding lease liability is recorded at an amount equal to the
fair value of the leased asset at the inception of the lease. Initial
costs directly attributable to lease are recognized with asset under
lease.
b) Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Lease payments/revenue under operating leases are recognized as
expense/income on accrual basis in accordance with the respective lease
agreements.
14. Miscellaneous Expenditure
Share Issue and Preliminary expenses are amortized over a period of ten
years.
15. Earnings Per Share
Basic earnings per share is computed and disclosed using the weighted
average number of common shares outstanding during the year. Dilutive
earnings per share is computed and disclosed using the weighted average
number of common and dilutive common equivalent shares outstanding
during the year, except when the results would be anti-dilutive.
16. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes to accounts. Contingent Assets are neither recognized nor
disclosed in the fnancial statements.
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