2710 TV18 BROADCAST LIMITED TV18 BROADCAST LIMITED

Transcription

1 2710 TV18 BROADCAST LIMITED TV18 BROADCAST LIMITED

2 TV18 BROADCAST LIMITED 2711 INDEPENDENT AUDITOR S REPORT To the Members of TV18 Broadcast Limited Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of TV18 Broadcast Limited (the Company ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Standalone IND AS Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date. Other Matter The Ind AS financial statements of the Company for the year ended March 31, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on April 19, Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s report) Order, 2016 ( the Order ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

3 2712 TV18 BROADCAST LIMITED 2. As required by section 143 (3) of the Act, we report that: (a) (b) (c) (d) (e) (f) (g) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account; In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act; With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure 2 to this report; With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements Refer Note 31 to the standalone Ind AS financial statements; ii. iii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm registration number: W/E per Kalpesh Jain Partner Membership No.: Mumbai April 24, 2018

4 TV18 BROADCAST LIMITED 2713 Annexure 1 to the Independent Auditor s Report Re: TV18 Broadcast Limited (the Company ) Referred to in Paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) (c) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. According to information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company. (ii) The Company s business does not involve inventories and, accordingly, the requirements under paragraph 3 (ii) of the Order are not applicable to the Company. (iii) (iv) (v) (vi) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of paragraph 3(iii)(a) to (c) of the Order are not applicable to the Company and hence not commented upon. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect of loans given and investment made have been complied with by the Company. There are no other loans given, investments made, guarantees given, and securities granted in respect of which provisions of section 185 and 186 of the Act are applicable and hence not commented upon. The Company has not accepted any deposits from the public during the year. As informed and represented by management, public deposits aggregating to Rs. 46 lakhs and interest on public deposits of Rs. 21 lakhs, accepted under the Companies (Acceptance of Deposits) Rules, 1975 have not been claimed by depositors till date. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73 to 76 or other relevant provisions of the Act and the rules framed there under with regard to the deposits. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Act, related to the Broadcasting and related services of the Company, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. (vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, service tax, duty of customs, value added tax, goods and service tax, cess and other statutory dues applicable to it. The provisions relating to sales-tax and duty of excise are not applicable to the Company. (b) (c) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, service tax, duty of customs, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. According to the information and explanation given to us, there are no dues of sales-tax, duty of customs and value added tax which have not been deposited on account of any dispute. According to the records of the Company, details of income tax dues and service tax which have not been deposited on account of a dispute, are as under:

5 2714 TV18 BROADCAST LIMITED Name of the statute Nature of dues Amount Period to which the Forum where (Rs. in lakhs) amount relates dispute is pending Income Tax Act, 1961 Income Tax 44 Assessment Year Income tax Appellate Tribunal 1 Assessment Year Income tax Appellate Tribunal 205 Assessment Year Income tax Appellate Tribunal Finance Act,1994 Service tax 3, to Customs, Excise and Service Tax Appellate Tribunal, Allahabad (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to Banks or financial institutions. The Company has neither issued any debentures nor availed any loan or borrowings from government. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans hence, reporting under clause (ix) of the Order is not applicable to the Company and hence not commented upon. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year. According to the information and explanations given by the management, the Company has not paid or provided any managerial remuneration during the year to the Manager appointed under the Act. In our opinion, the Company is not a nidhi company. Therefore, the provisions of paragraph 3, clause (xii) of the Order are not applicable to the Company and hence not commented upon. According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence not commented upon. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act. (xvi) According to information and explanation given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm registration number: W/E per Kalpesh Jain Partner Membership No.: Mumbai April 24, 2018

6 TV18 BROADCAST LIMITED 2715 ANNEXURE 2 TO THE INDEPENDENT AUDITOR S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF TV18 BROADCAST LIMTED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal financial controls over financial reporting of TV18 Broadcast Limited (the Company ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls The Company s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, Auditor s Responsibility Our responsibility is to express an opinion on the Company s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

7 2716 TV18 BROADCAST LIMITED Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm registration number: W/E per Kalpesh Jain Partner Membership No.: Mumbai April 24, 2018

8 TV18 BROADCAST LIMITED 2717 Balance Sheet as at 31st March, 2018 Notes ASSETS Non-current assets Property, Plant and Equipment 1 8,240 8,304 Capital work-in-progress Intangible assets Financial Assets Investments 2 3,55,952 3,39,233 Loans 3 2,133 1,683 Other financial assets ,320 Deferred tax assets (net) 5 2,409 4,821 Other non-current assets 6 18,651 16,175 Total Non-current Assets 3,88,819 3,72,082 Current assets Financial Assets Trade receivables 7 21,692 18,027 Cash and cash equivalents Bank balances other than cash and cash equivalents Loans 10 23,100 14,263 Other financial assets 11 2,738 2,828 Other current assets 12 3,264 6,379 Total Current Assets 50,878 42,241 Total Assets 4,39,697 4,14,323 EQUITY AND LIABILITIES Equity Equity Share Capital 13 34,287 34,287 Other Equity 14 3,44,974 3,35,428 Total Equity 3,79,261 3,69,715 LIABILITIES Non-current liabilities Financial Liabilities Borrowings 15-0 Provisions 16 2,145 1,894 Total Non-current Liabilties 2,145 1,894 Current liabilities Financial Liabilities Borrowings 17 38,551 23,666 Trade Payables 18 13,946 11,395 Other financial liabilities Other current liabilities 20 5,529 7,387 Provisions Total Current Liabilties 58,291 42,714 Total Liabilities 60,436 44,608 Total Equity and Liabilities 4,39,697 4,14,323 Significant Accounting Policies and accompanying notes (1 to 42) are part of the financial statements As per our Report of even date For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Reg. No.: W/E For and on behalf of the Board of Directors TV18 Broadcast Limited per Kalpesh Jain Adil Zainulbhai Nirupama Rao Dhruv Subodh Kaji Partner Chairman Director Director Membership No.: DIN DIN DIN P.M.S. Prasad Ramesh Kumar Damani Deepak Gupta Place: Mumbai Director Chief Financial Officer Company Secretary Date: 24th April, 2018 DIN

9 2718 TV18 BROADCAST LIMITED Statement of Profit and Loss for the year ended 31st March, 2018 INCOME Notes Value of sales and services 83,534 66,681 Goods and Services Tax included in above 9,989 - Revenue from operations 22 73,545 66,681 Other Income 23 2,960 3,725 Total Income 76,505 70,406 EXPENSES Marketing, distribution and promotional expense 9,375 9,336 Employee benefits expense 24 23,578 19,582 Finance costs 25 1,906 1,868 Depreciation and amortisation expense 1 1,863 1,783 Other expenses 26 24,914 25,580 Total Expenses 61,636 58,149 Profit before Tax 14,869 12,257 Tax expense: Current tax 27 5,232 2,111 Deferred tax ,232 2,111 Profit/ (Loss) for the year 9,637 10,146 Other Comprehensive Income Items that will not be reclassified to profit or loss (91) (193) Total Other Comprehensive Income (91) (193) Total Comprehensive Income for the year 9,546 9,953 Earnings per equity share of face value of ` 2 each Basic and Diluted (in `) Significant Accounting Policies and accompanying notes (1 to 42) are part of the financial statements As per our Report of even date For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Reg. No.: W/E For and on behalf of the Board of Directors TV18 Broadcast Limited per Kalpesh Jain Adil Zainulbhai Nirupama Rao Dhruv Subodh Kaji Partner Chairman Director Director Membership No.: DIN DIN DIN P.M.S. Prasad Ramesh Kumar Damani Deepak Gupta Place: Mumbai Director Chief Financial Officer Company Secretary Date: 24th April, 2018 DIN

10 TV18 BROADCAST LIMITED 2719 Statement of Change in Equity for the year ended 31st March, 2018 A. Equity Share Capital Balance at the Changes in Balance as at Changes in Balance as at begining of equity share 31st March, equity share 31st March, 1st April, 2016 capital during 2017 capital during 2018 the year the year ,287-34,287-34,287 B. Other Equity Other Reserves and Surplus Comprehensive Income Securities Share based General Retained Equity Total premium payment reserve Earnings* Instruments reserve through Other Comprehensive Income Balance at the begining of 1st April, ,15, ,180 8, ,25,476 Total Comprehensive Income for the year , ,953 Written back to statement of Profit and Loss - (1) (1) Balance as at the end of 31st March, ,15,779-1,180 18, ,35,428 Balance at the begining of 1st April, ,15,779-1,180 18, ,35,428 Total Comprehensive Income for the year ,604 (58) 9,546 Balance as at the end of 31st March, ,15,779-1,180 28,028 (13) 3,44,974 * Includes remeasurement of defined benefit plans for the year amounting to ` 33 lakh (Previous year ` 2.32 lakh) As per our Report of even date For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Reg. No.: W/E For and on behalf of the Board of Directors TV18 Broadcast Limited per Kalpesh Jain Adil Zainulbhai Nirupama Rao Dhruv Subodh Kaji Partner Chairman Director Director Membership No.: DIN DIN DIN P.M.S. Prasad Ramesh Kumar Damani Deepak Gupta Place: Mumbai Director Chief Financial Officer Company Secretary Date: 24th April, 2018 DIN

11 2720 TV18 BROADCAST LIMITED Cash Flow Statement for the year ended 31st March, A: CASH FLOW FROM OPERATING ACTIVITIES Profit before tax as per Statement of Profit and Loss 14,869 12,257 Adjusted for: (Profit)/ loss on sale/ discarding of assets (net) (13) (6) Bad debts and allowance for doubtful trade receivables (124) (512) Depreciation and amortisation expense 1,863 1,783 Effect of exchange rate change (3) 10 Expense on employee stock option (ESOP) scheme - (1) (Profit)/ loss on sale of investments (net) (18) (2) Net gain/ loss arising on financial assets designated at fair value through profit and loss (450) (95) Amortisation of Lease rent Interest income (1,873) (2,345) Finance costs 1,906 1,868 As per our Report of even date For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Reg. No.: W/E For and on behalf of the Board of Directors TV18 Broadcast Limited 1, Operating profit before working capital changes 16,259 13,060 Adjusted for: Trade and other receivables (479) 1,330 Trade and other payables 900 (14,933) 421 (13,603) Cash generated/ (used in) from operations 16,680 (543) Taxes paid (net) (5,513) (5,765) Net cash generated from/ (used in) operating activities 11,167 (6,308) B: CASH FLOW FROM INVESTING ACTIVITIES Payment for Property, Plant and Equipment (1,695) (5,088) Proceeds from disposal of Property, Plant and Equipment Purchase of non current investments (16,777) (5,425) Purchase of current investments (9,033) (9,900) Sale of current investments 9,051 9,902 Repayment of Loan from related party 10,000 32,120 Loans given to related party (18,877) (18,285) Net Withdrawal of/ (Investment in) fixed deposits Interest income 2,504 2,688 Net cash (used in)/ generated from investing activities (24,732) 6,858 C: CASH FLOW FROM FINANCING ACTIVITIES Repayment of long term borrowings - (67) Proceeds from current borrowings (net) 14,880 1,485 Interest paid (1,907) (1,868) Net cash generated/ (used in) financing activities 12,973 (450) Net increase / (decrease) in cash and cash equivalents (592) 100 Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents (Refer Note 8) per Kalpesh Jain Adil Zainulbhai Nirupama Rao Dhruv Subodh Kaji Partner Chairman Director Director Membership No.: DIN DIN DIN P.M.S. Prasad Ramesh Kumar Damani Deepak Gupta Place: Mumbai Director Chief Financial Officer Company Secretary Date: 24th April, 2018 DIN

12 TV18 BROADCAST LIMITED 2721 A CORPORATE INFORMATION TV18 Broadcast Limited ( the Company ) is a listed Company incorporated in India. The registered office of the Company is situated at First Floor, Empire Complex, 414 Senapati Bapat Marg, Lower Parel, Mumbai , Maharashtra. The Company is engaged in the business of news broadcasting, digital content and allied businesses. B SIGNIFICANT ACCOUNTING POLICIES B.1 Basis Of Preparation And Presentation The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities, Defined benefit plans - plan assets and Equity settled share based payments which have been measured at fair value amount. The financial statements of the Company have been prepared to comply with the Indian Accounting standards ( Ind AS ), including the rules notified under the relevant provisions of the Companies Act, These financial statements are the Company s Ind AS standalone financial statements. The Company s financial statements are presented in Indian Rupees (` ), which is its functional currency and all values are rounded to the nearest lakh (` 00,000), except when otherwise indicated. B.2 Summary Of Significant Accounting Policies (a) Property, plant and equipment: Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow the entity and the cost can be measured reliably. Depreciation on property, plant and equipment is provided using straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, Leasehold improvements are depreciated over the period of lease agreement or the useful life whichever is shorter. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised. (b) (c) Intangible assets: Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortisation/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use. Subsequent costs are included in the asset s carrying amount or recognized as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised. Computer Software and License pertaining to satellite rights are being amortised over its estimated useful life of 5 years. News Archives is being depreciated over a period of 21 years as the contents of the same are continuously used in day to day programming and hence the economic benefits from the same arise for a period longer than 20 years. Leases: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Leased assets: Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

13 2722 TV18 BROADCAST LIMITED (d) (e) (f) (g) Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Borrowing Cost Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred. Impairment of non-financial assets - property, plant and equipment and intangible assets: The Company assesses at each reporting dates as to whether there is any indication that any property, plant and equipment and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to determine the extent of impairment, if any. An impairment loss is recognized in the Statement of the Profit and Loss to the extent, asset s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Provisions and Contingencies Provisions are recognised when the Company has a present obligation as a result of a past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements. Employee Benefits Short Term Employee Benefits The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. Long Term Employee Benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recongnised as a liability as at the Balance Sheet date on the basis of actuarial valuation. Post-Employment Benefits Defined Contribution Plans A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

14 TV18 BROADCAST LIMITED 2723 Defined Benefit Plans The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is 15 days salary for the every completed year of service as per the Payment of Gratuity Act, The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees services. Re-measurement of defined benefit plans in respect of post-employment and other long term benefits are charged to the Other Comprehensive Income. (h) (i) (j) Tax Expenses The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. i ii Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date. 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 income tax assets are reassessed at each reporting period and are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period. Share based payments Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Company s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. Foreign currencies transactions and translation Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.

15 2724 TV18 BROADCAST LIMITED (k) (l) Revenue recognition Revenue from operations includes sale of goods and services. Sale of services includes advertisement revenue, subscription revenue, revenue from sale of television content, facility and equipment rental, program revenue, revenue from sponsorship of events and revenue from media related professional and consultancy services. Sale of services is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government. Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed. Sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Revenue from sale of goods, is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control, or managerial involvement with, the goods, and the amount of revenue can be measured reliably. Interest income Interest Income from a financial asset is recognised using effective interest rate method. Dividend income Dividend income is recognised when the Company s right to receive the payment has been established. Financial instruments (i) Financial Assets A. Initial recognition and measurement: All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not accounted at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting. B. Subsequent measurement: a) Financial assets carried at amortised cost A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The effective interest rate amortisation is included in other income in the Statement of Profit and Loss. b) Financial assets at fair value through other comprehensive income (FVTOCI) A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. c) Financial assets at fair value through profit or loss (FVTPL) A financial asset which is not classified in any of the above categories are fair valued through profit or loss. C. Investment in subsidiaries, associates and joint ventures The Company accounts for its investments in subsidiaries, associates and joint venture at cost. D. Equity investments: All equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in Other Comprehensive Income. E. Impairment of financial assets In accordance with Ind AS 109, the Company uses Expected Credit Loss (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit and loss (FVTPL).

16 TV18 BROADCAST LIMITED 2725 (ii) Expected credit losses are measured through a loss allowance at an amount equal to: a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument) For trade receivables, Company applies simplified approach which requires expected lifetime losses to be recognised from initial recognition of the receivable. Further, Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward looking estimates are analysed. For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. Financial Liabilities A. Initial recognition and measurement: All financial liabilities are recognized initially at fair value and in case of loans net of directly attributable cost. Fees of recurring nature are directly recognised in profit or loss as finance cost. B. Subsequent measurement: Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. (iii) Derecognition of financial instruments The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. (iv) Offsetting Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously. C CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY: The preparation of the Company s financial statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. a) Depreciation and useful lives of property, plant and Equipment and intangible assets: Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Intangible assets are amortised over its estimated useful lives. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortisation for future periods is adjusted if there are significant changes from previous estimates. b) Recoverability of trade receivable: Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

17 2726 TV18 BROADCAST LIMITED c) Provisions: Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances. d) Impairment of non-financial assets: The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset s recoverable amount. An asset s recoverable amount is the higher of an asset s or Cash Generating Units ( CGU s ) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used. e) Impairment of financial assets: The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. f) Defined benefit plans: The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ income include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations. D STANDARDS ISSUED BUT NOT EFFECTIVE: On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, i. Issue of Ind AS Revenue from Contracts with Customers: ii. Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations. Amendment to Existing issued Ind AS The MCA has also carried out amendments following accounting standards. These are: a b c d e Ind AS 21 - The Effects of Changes in Foreign Exchange Rates Ind AS 40 - Investment Property Ind AS 12 - Income Taxes Ind AS 28 - Investments in Associates and Joint Ventures and Ind AS Disclosure of Interests in Other Entities Application of above standards are not expected to have any significant impact on the Company s financial statements.