Network18 Media & Investments Limited Annual Accounts - FY :

Transcription

1 Network18 Media & Investments Limited Annual Accounts - FY :

2 2 NETWORK18 MEDIA & INVESTMENTS LIMITED Independent Auditor s Report Tothe Members of Network18 Media & Investments Limited Report on the Standalone Financial Statements 1. We have audited the accompanying standalone financial statements of Network18 Media & Investments Limited ( the Company ), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement, the Statement of Changes in Equity for the year then ended,and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Standalone Financial Statements 2. 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 financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error Auditor s Responsibility 3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. 4. 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. 5. We conducted our audit in accordance with the Standards on Auditingspecified 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 standalone financialstatements are free from material misstatement. 6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company s preparation of the 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 the 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 financial statements. 7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Opinion 8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 Indiaincluding the Ind AS specified under Section 133 of the Act,of the state of affairs (financial position) of the Company as at 31 March 2017, its loss (financial performance including other comprehensive income), its cash flows andthe changes in equity and for the year ended on that date. Other Matter 9. The Company had prepared separate sets of statutory financial statements for the year ended 31 March 2016 and 31 March 2015 in accordance with the Accounting Standards as notified under Section 133 of thecompanies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued separate auditor s reports to the shareholders of the Company dated 15 April 2015 and 20 April 2016 respectively. These separate sets of financial statements have been adjusted for

3 NETWORK18 MEDIA & INVESTMENTS LIMITED 3 the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have also been audited by us. Report on Other Legal and Regulatory Requirements 10. As required by the Companies (Auditor s Report) Order, 2016 ( the Order ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the AnnexureI a statement on the matters specified in paragraphs 3 and 4 of the Order. 11. Further to our comments in Annexure I, as required by Section143(3) of the Act, we report that: a. 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; b. 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; c. the standalone financial statements dealt with by this report are in agreement with the books of account; d. in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified undersection 133 of the Act; e. on the basis of the written representations received from the directors as on 31 March 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section164(2) of the Act; f. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 19 April 2017 as per Annexure II expressed unmodified opinion. g. 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. as detailed in Note 34 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financialposition; ii. iii. iv. 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. the company, as detailed in Note 38 to the standalone financial statements, has made requisite disclosures in these standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December Based on the audit procedures performed and taking into consideration the information and explanations given to us, in our opinion, these are in accordance with the books of account maintained by the company. For Walker Chandiok & Co LLP Chartered Accountants Firm s Registration No.: N/N per Sudhir N. Pillai Partner Membership No.: Place:Mumbai Date:19 April 2017

4 4 NETWORK18 MEDIA & INVESTMENTS LIMITED Annexure I to the Independent Auditor s Report of even date to the members of Network18 Media & Investments Limited, on the standalone financial statements for the year ended 31 March 2017 Annexure I Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) (c) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. The title deeds of all the immovable properties (which are included under the head Property, plant and equipment )are held in the name of the Company. (ii) The entire inventory of the Company is lying with the third parties for which written confirmations have been obtained by the management as at the year-end. (iii) The Company has granted unsecured loans to companiescovered in the register maintained under Section 189 of the Act; and with respect to the same: (a) (b) (c) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company s interest; the schedule of repayment of principal and payment of interest has been stipulated and theprincipal amount and interest are not due for repayment currently; there is no overdue amount in respect of loans granted to such companies. (iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of investments, loans, guarantees. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of security. (v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. (vi) 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 in respect of Company s products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) (a) Undisputed statutory dues including provident fund, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have been regularly deposited to the appropriate authoritiesthough there has been a slight delay in a few cases.in case of employees state insurance the Company has not deposited the dues with the appropriate authorities. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows: Name of the statute Employees State Insurance Act, 1948 Employees State Insurance Act, 1948 Employees State Insurance Act, 1948 Employees State Insurance Act, 1948 Nature of the dues Amount (`) Period to which the amount relates Due Date Date of Payment ESIC 1,741 April May ESIC 1,620 May June ESIC 1,489 June July ESIC 445 July July

5 NETWORK18 MEDIA & INVESTMENTS LIMITED 5 (b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of exciseand value added tax on account of any dispute, are as follows: Statement of Disputed Dues ` In Lakhs Name of the statute The Finance Act 1994 Income-tax Act, 1961 Income-tax Act, 1961 Nature of dues Recovery of service tax, Interest & penalty Amount (`) Amount paid under Protest (`) Period to which the amount relates Forum where dispute is pending 80 - F.Y Customs, Excise and Service Tax Appellate Tribunal, Mumbai Income-tax A.Y CIT (Appeals), Delhi Income-tax A.Y CIT (Appeals), Mumbai *A.Y. Assessment Year, F.Y. Financial Year (viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year. (ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained. (x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit. (xi) The Company has not paid or provided for any managerial remuneration. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable. (xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions ofclause 3(xii) of the Order are not applicable. (xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards. (xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. (xv) In our opinion,the Company has not entered into any non-cash transactions with the directors or persons connected with themcovered under Section 192 of the Act. (xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, For Walker Chandiok & Co LLP Chartered Accountants Firm s Registration No.: N/N per Sudhir N. Pillai Partner Membership No.: Place:Mumbai Date:19 April 2017

6 6 NETWORK18 MEDIA & INVESTMENTS LIMITED Annexure II to the Independent Auditor s Report of even date to the members of Network18 Media & Investments Limited, on the standalone financial statements for the year ended 31 March 2017 Annexure II Independent Auditor s report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofsection 143 of the Companies Act, 2013 ( the Act ) 1. In conjunction with our audit of the standalone financial statements of Network18 Media & Investments Limited ( the Company ) as at and for the year ended 31 March 2017, we have audited the internal financial controls over financial reporting ( IFCoFR ) of the Company as at that date. Management s Responsibility for Internal Financial Controls 2. The Company s Board of Directors is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal financial control stated in the Guidance Note on Audit of IFCoFR issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design, implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficient conduct ofthe Company s business, including adherence to Company s policies, the safeguarding of its assets, theprevention and detection of frauds and errors, the accuracy and completeness of the accountingrecords, and the timely preparation of reliable financial information, as required under theact. Auditors Responsibility 3. Our responsibility is to express an opinion on the Company s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditingissued by the Institute of Chartered Accountants of India ( the ICAI ) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ( the Guidance Note ) issued by the ICAI. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in allmaterial respects. 4. Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe IFCoFR and their operating effectiveness.our audit of IFCoFR included obtaining anunderstanding of IFCoFR, assessing the risk that amaterial weakness exists, and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on the auditor sjudgement, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. 5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company s IFCoFR. Meaning of Internal Financial Controls over Financial Reporting 6. A company s IFCoFR is a process designed toprovidereasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accountingprinciples. A company s IFCoFR include those policiesand 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 preparationof financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition, use, ordisposition of the company s assets that could have a material effect on the financial statements.

7 NETWORK18 MEDIA & INVESTMENTS LIMITED 7 Inherent Limitations of Internal Financial Controls over Financial Reporting 7. Because of the inherent limitations of IFCoFR, includingthe possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of theifcofr to future periods are subject to the risk that IFCoFR may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion 8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at31 March 2017, 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 IFCoFR issued by the Institute of Chartered Accountants of India. For Walker Chandiok & Co LLP Chartered Accountants Firm s Registration No.: N/N per Sudhir N. Pillai Partner Membership No.: Place:Mumbai Date:19 April 2017

8 8 NETWORK18 MEDIA & INVESTMENTS LIMITED Balance Sheet as at 31st March, 2017 Note No. 31st March st March st April 2015 ASSETS Non-current assets Property, plant and equipment 1 1, , Intangible assets 2 1, , Intangible assets under development Financial assets Investments 3 363, , , Loans 4 18, , , Other financial assets 5 1, Other non- current assets 6 3, , , Total Non-current Assets 389, , , Current assets Inventories Financial assets Investment Trade receivables 9 4, , , Cash and cash equivalents Bank balances other than above Loans Other financial assets , Other current assets 14 1, Total Current Assets 6, , , Total Assets 396, , , EQUITY AND LIABILITIES Equity Equity share capital 15 52, , , Other equity , , , Total Equity 253, , , Liabilities Non-current liabilities Financial liabilities Borrowings Provisions Other Non-Current liabilities Total Non-current Liabilities Current liabilities Financials liabilities Borrowings , , , Trade payable 21 3, , , Other financial liabilities (Other than those specified in Note 24) 22 1, Other current liabilities Provisions 24 21, , , Total Current Liabilities 141, , , Total Equity and Liabilities 396, , , Significant Accounting Policies and accompanying Notes (1 to 49) are parts of the Financial Statements As per our Report of even date For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No N/N For and on behalf of the Board of Directors of Network18 Media & Investments Limited Sudhir N. Pillai Adil Zainulbhai K R Raja Partner Chairman Director Membership No.: DIN : DIN : Ramesh Kumar Damani Chief Financial Officer Place: Mumbai Place: Mumbai Date: 19th April 2017 Date: 19th April 2017 Ratnesh Rukhariyar Company Secretary

9 NETWORK18 MEDIA & INVESTMENTS LIMITED 9 Statement of Profit and Loss for the year ended 31st March, 2017 INCOME Note No Revenue from operations 25 6, , Other income 26 1, , Total Income 8, , EXPENSES Cost of materials consumed Employee benefits expense 28 5, , Finance costs 29 7, , Depreciation and amortisation expense Other expenses 31 6, , Total Expenses 20, , Loss before tax (11,864.52) (7,509.10) Tax expense: Short provision for tax relating to earlier years Loss for the year (A) (11,868.82) (7,509.10) Other comprehensive income Items that will not be reclassified to profit or loss a (i) Equity instruments through other comprehensive income (25.14) (238.47) b (i) Remeasurements of the defined benefit plans Total Other Comprehensive Income for the year (B) (218.34) Total Comprehensive Income for the year (A+B) (11,854.73) (7,727.44) Earnings per Equity Share of face value of ` 5 each Basic (in `) 32 (1.13) (0.72) Diluted (in `) 32 (1.13) (0.72) Significant Accounting Policies and accompanying Notes (1 to 49) are parts of the Financial Statements As per our Report of even date For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No N/N For and on behalf of the Board of Directors of Network18 Media & Investments Limited Sudhir N. Pillai Adil Zainulbhai K R Raja Partner Chairman Director Membership No.: DIN : DIN : Ramesh Kumar Damani Chief Financial Officer Place: Mumbai Place: Mumbai Date: 19th April 2017 Date: 19th April 2017 Ratnesh Rukhariyar Company Secretary

10 10 NETWORK18 MEDIA & INVESTMENTS LIMITED Statement of Changes in Equity for the year ended 31st March, 2017 A. Equity Share Capital ` in lakh Balance as at 1st April, 2015 Changes in equity share capital during the year Balance as at 31st March, 2016 Changes in equity share capital during the year Balance as at 31st March, , , , B. Other Equity For the year Balance as at 1st April 2015 Total comprehensive income for the year Exercise and lapse of employee stock options Balance as at 31st March 2016 Capital reserve ` in lakh Reserves and Surplus Other Comprehensive Income Total Securities Share General Retained Equity Remeasurements premium options reserve Earnings instruments of the defined reserve outstanding through Other benefit plans account Comprehensive Income , , (114,727.16) , (7,509.10) (238.47) (7,727.44) (59.65) , , (122,236.26) , For the year Balance at the beginning of the reporting period Total comprehensive income for the year Balance as at 31st March 2017 As per our Report of even date For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No N/N , , (122,236.26) , (11,868.82) (25.14) (11,854.73) , , (134,105.09) , For and on behalf of the Board of Directors of Network18 Media & Investments Limited Sudhir N. Pillai Adil Zainulbhai K R Raja Partner Chairman Director Membership No.: DIN : DIN : Ramesh Kumar Damani Chief Financial Officer Place: Mumbai Place: Mumbai Date: 19th April 2017 Date: 19th April 2017 Ratnesh Rukhariyar Company Secretary

11 NETWORK18 MEDIA & INVESTMENTS LIMITED 11 Cash Flow Statement For The Year Ended 31st March, A. CASH FLOW FROM OPERATING ACTIVITIES Net Loss before tax as per Statement of Profit and Loss (11,864.52) (7,509.10) Adjustments for : Depreciation Loss /(profit) on disposal of property, plant and equipment (1.78) Finance costs 7, , Allowance for credit losses Excess provision/ sundry balances written back (350.83) (318.07) Profit on sale of current investments (10.31) - Net (gain)/ loss arising on financial instruments designated at fair value (898.77) (1,608.31) Interest income (253.02) (324.37) Operating loss before working capital changes (5,466.81) (3,554.08) Adjustments for : Trade receivables (1,295.70) (984.70) Inventory (7.09) Trade payables 1, Other financial assets Other non-financial assets (329.23) Other financial liabilities Other non-financial liabilities 8.21 (337.13) Provisions Cash flow after working capital changes (5,392.10) (3,713.53) Income tax paid (309.46) (278.81) Cash flows (used in)/ from operating activities (5,701.56) (3,992.34) B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of plant, property and equipment (including capital expenditure) (910.31) (830.00) Purchase of other intangible assets (including other intangible assets under (230.66) (1,031.44) development) Sale of property, plant and equipment Sale of long term investments - 2, Sale of current investments Purchase of long term investments: (36,895.15) (210.00) Debenture application money paid - (300.00) (Investment in)/ redemption of fixed deposits with banks (284.37) (increase)/ decrease in other bank balances 0.01 (1.65) Loan given to subsidiaries / others (18.07) Interest received Cash flow used in investing activities (37,773.13) (215.95) C. CASH FLOW FROM FINANCING ACTIVITIES Interest paid (7,075.54) (5,313.35) Proceeds from issue of equity shares (including securities premium) Repayment of borrowings (4,016.38) (63.25) Proceeds from borrowings 54, , Cash flow used in financing activities 43, , Net increase/(decrease) in cash and cash equivalents (345.72) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year Cash and Cash Equivalents Balance with banks in current accounts in deposit accounts Cheques on hand Cash on hand Cash and Cash Equivalents as per note Significant Accounting Policies and accompanying Notes (1 to 49) are parts of the Financial Statements As per our Report of even date For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No N/N For and on behalf of the Board of Directors of Network18 Media & Investments Limited Sudhir N. Pillai Adil Zainulbhai K R Raja Partner Chairman Director Membership No.: DIN : DIN : Ramesh Kumar Damani Chief Financial Officer Place: Mumbai Place: Mumbai Date: 19th April 2017 Date: 19th April 2017 Ratnesh Rukhariyar Company Secretary

12 12 NETWORK18 MEDIA & INVESTMENTS LIMITED Summary of the Significant Accounting Policies and other explanatory Information A CORPORATE INFORMATION Network18 Media and Investments Limited ( the Company ) is a listed company incorporated in India. The address of its registered office situated at First Floor, Empire Complex, 414, Senapati Bapat Marg, Lower Parel, Mumbai , Maharashtra. B ACCOUNTING POLICIES B.1 BASIS OF PREPARATION AND PRESENTATION The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which have been measured at fair value amount. The financial statements of the Company have been prepared to comply with the Indian Accounting standards ( Ind AS ), including the Accounting Standards notified under the relevant provisions of the Companies Act, Upto the year ended 31st March, 2016, the Company has prepared its financial statements in accordance with the requirement of Indian GAAP, which includes Standards specified under section 133 of the Companies Act, 2013 ( the Act ) read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended). These financial statements are the Company`s first Ind AS financial statements. Company s financial statements are presented in Indian Rupees (`), which is its functional currency. B.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Property, plant and equipment: Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and arrangements arising from exchange rate variations attributable to the assets. Subsequent costs are included in the asset s carrying amount or 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, 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) Leases: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Lease assets: Assets held under finance leases are initially 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. 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 profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized.

13 NETWORK18 MEDIA & INVESTMENTS LIMITED 13 Summary of the Significant Accounting Policies and other explanatory Information 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 except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed. (c) Intangible assets: Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount, rebates less accumulated amortisation and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets. Subsequent costs are included in the asset s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised. Computer Software, Brand/ Trademarks and website costs are being amortised over its estimated useful life of 3 to 5 years. (d) Borrowing Costs 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. (e) Inventories (f) Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on weighted average basis. 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. (g) Provisions and contingencies Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

14 14 NETWORK18 MEDIA & INVESTMENTS LIMITED Summary of the Significant Accounting Policies and other explanatory Information Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements. (h) Employee benefits (i) Short term employee benefits The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. (ii) Long term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recongnised as a liability as at the Balance Sheet date on the basis of actuarial valuation. (iii) Post-employment benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund, Employee State Insurance and Pension Scheme. The Company s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Defined benefit plans The Company pays gratuity to the employees whoever has completed 5 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. (i) Tax Expenses The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit or Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. i Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date. ii Deferred tax Deferred tax is 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 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. (j) Share based compensation Equity- settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.

15 NETWORK18 MEDIA & INVESTMENTS LIMITED 15 Summary of the Significant Accounting Policies and other explanatory Information The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. (k) Foreign currencies transactions and translation (l) 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 or Loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item. Revenue recognition 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. Revenue from rendering of services is recognised when the performance of agreed contractual task been completed. Revenue from operations includes sale of goods and services measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates and excluding taxes or duties collected on behalf of the government. Sale of services includes advertisement revenue, subscription revenue, revenue from sponsorship of events, revenue from mobile short messaging and other related services. Interest Income Interest Income from a financial asset is recognised using effective interest rate method. Dividends Dividend income is recognised when the Company s right to receive the payment has been established. (m) Financial instruments I Financial Assets i. Initial recognition and measurement: ii. All financial assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition of financial assets, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting. Subsequent measurement: a) Financial assets carried at amortised cost (AC) 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.

16 16 NETWORK18 MEDIA & INVESTMENTS LIMITED Summary of the Significant Accounting Policies and other explanatory Information b) Financial assets at fair value through other comprehensive income (FVTOCI) A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. c) Financial assets at fair value through profit or loss (FVTPL) A financial asset which is not classified in any of the above categories are fair valued through profit or loss. iii. Equity investments: All equity investments are measured at fair value, with value changes 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. iv. Investment in subsidiaries, associates and joint ventures The Company has accounted for its investments in subsidiaries, associates and joint venture at cost. v. Impairment of financial assets In accordance with Ind AS 109, the Company use Expected Credit Loss (ECL) model, for evaluating impairment assessment of financial assets other than those measured at fair value through profit and loss (FVTPL). Expected credit losses are measured through a loss allowance at an amount equal to: a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or b) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument) For trade receivables Company applies simplified approach which requires expected lifetime losses to be recognised from initial recognition of the receivable. Further the Company uses historical default rates to determine impairment loss on the portfolio of the trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed. For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used. II Financial liabilities i. Initial recognition and measurement: All financial liabilities are recognized initially at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in profit or loss as finance cost. ii. Subsequent measurement: Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. C Critical accounting 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.

17 NETWORK18 MEDIA & INVESTMENTS LIMITED 17 Summary of the Significant Accounting Policies and other explanatory Information 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. 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 First time adoption of Ind AS: The Company has adopted Ind AS with effect from 1st April 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the opening Reserves as at 1st April 2015 and all the periods presented have been restated accordingly. Exemptions from retrospective application: i) Share-based payment transactions Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the later of the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to awards that vested prior to April 1, ii) Fair value as deemed cost exemption: The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at deemed cost at the transition date. iii) Investments in subsidiaries, joint ventures and associates The Company has elected to measure investment in subsidiaries, joint venture and associate at cost and consider the previous GAAP carrying value as at the date of transition as deemed cost.

18 18 NETWORK18 MEDIA & INVESTMENTS LIMITED Notes on Financial Statements for the year ended 31st March 2017 Note 1: Property, Plant and Equipment Land Leasehold land Leasehold improvements Buildings Plant and equipment Office Equipments Vehicles Information technology and related equipments Total Gross block Balance as at 1 April , , , Additions Disposals (152.54) - (152.54) Balance as at 31 March , , , Additions Disposals - - (20.75) - (4.14) (0.59) (23.72) (113.72) (162.92) Balance as at 31 March , , , Accumulated depreciation Balance as at 1 April , , Charge for the year Reversal on account of disposals (57.58) - (57.58) / adjustments Balance as at 31 March , , Charge for the year Reversal on account of disposals - - (20.74) (2.23) (0.29) (8.62) (113.73) (145.61) Balance as at 31 March , , Net block Balance as at 1st April Balance as at 31 March , Balance as at 31 March , , Note 2: Intangible Assets Computer software Website costs Total Gross block Balance as at 1 April , , , Additions , Balance as at 31 March , , , Additions Balance as at 31 March , , , Accumulated amortization Balance as at 1 April , , , Charge for the year Balance as at 31 March , , , Charge for the year Balance as at 31 March , , , Net Block Balance as at 1st April Balance as at 31 March , Balance as at 31 March , Intangible Assets under development Balance as at 1st April Balance as at 31 March Balance as at 31 March