HT Media

1.  Nature of Operations
 
 The Company publishes Hindustan Times, an English daily, Hindustan,
 a Hindi daily and Mint, a Business paper daily except on Sunday and
 two monthly Hindi magazines.  Kadambini and Nandan. The Company has
 also acquired Radio business of one of its subsidiary w.e.f. 1 January,
 09 which is engaged into the business of providing entertainment, radio
 broadcast and all other related activities through its Radio Stations
 operating under brand name Fever 104 in cities of Delhi, Mumbai,
 Kolkata and Bangalore.  The Company derives revenue primarily from the
 sale of the above mentioned publications.  advertisements published
 therein, by undertaking printing jobs and Airtime advertisements aired
 at the aforesaid radio stations. The Company also derives revenue from
 the internet business, by displaying advertisements on its websites,
 hindustantimes.com and livemint.com.
 
 2.  Basis of preparation
 
 The financial statements are prepared to comply in all material aspects
 with Indian Accounting Standards as notified by the Companies
 (Accounting Standards) Rules, 2006 and the relevant provisions of the
 Companies Act, 1956.Thefinancial statements have been prepared under
 the historical cost convention on accrual basis. The accounting
 policies have been consistently applied by the Company and except for
 the changes in accounting policies as discussed more fully below, are
 consistent with those used in the previousyear
 
 3.  Use of estimate
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 period end.  Although these estimates are based upon managements best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 4.  Changes in Accounting Policies
 
 The Company has changed its policy with respect to the exchange
 difference on foreign currency transactions relating to acquisition of
 fixed assets. These differences have been adjusted to the carrying
 amount of fixed assets pursuant to retrospective amendments (with
 effect from 7th December, 2006) to Accounting Standard (AS-11) on
 Effects of Changes in Foreign Exchange Rates vide GSR notification
 225(E) dated 31st March 2009. The above accounting treatment followed
 by the Company is consistent with the revised AS-11.  Had the Company
 continued to use the earlier basis of accounting for foreign exchange
 fluctuation, the Profit after taxation for the current year would have
 been lower by Rs.313.57 lacs (Net of tax of Rs.161.47 lacs) and net
 block of fixed assets (including CWIP) would correspondingly have been
 lower by Rs.475.04 lacs.
 
 5.  Segment Information Identification of Segments: Primary Segment
 
 Business Segment
 
 The Company is presently engaged in the business of Printing and
 Publication of Newspapers & Periodicals and in the business of radio 
 broadcast and all other related activities through its Radio channels 
 operating under brand name Fever 104 in India.
 
 Accordingly the Company has organised its operations into two major
 businesses: Printing and Publishing of Newspapers and Periodicals 
 and Radio Broadcast. 
 
 Secondary Segment
 
 Geographical Segments
 
 The Companys operations are mostly within India and do not have
 operations in economic environments with different risks and returns. 
 Hence, it is considered operating in single geographical segment.
 
 6. Merger of Radio business
 
 The Board of Directors of the Company at its meeting held on November
 28,2008 approved a Scheme of Arrangement and Restructuring u/s 391 -394
 read with Sections 100-104 of the Companies Act, 1956 between the HT
 Music and Entertainment Company Limited (Demerged Company) and the
 Company (Resulting Company) (hereinafter referred to as the
 Scheme).  The Scheme, inter-alia, provides for the following:
 
 [A] Upon the Scheme coming into effect and with effect from Appointed
 Date-1 i.e. 30th September, 2008 (closing business hours):
 
 I.  Reduction of Equity Share Capital of the Demerged Company, by
 reducing face value of equity shares from Rs.10 to Re.1 by cancelling
 Rs.9 per equity share.
 
 II.  Reduction of Preference Share Capital of the Demerged Company, by
 reducing face value of preference shares from Rs.100 to Rs.62 by
 cancelling Rs.38 per preference share.
 
 III.  The loss of Rs.70,50,00,000 on reduction of paid-up value of
 Equity and Preference Share Capital in Demerged Company held by
 Resulting Company as contemplated in AI & AII above shall be adjusted
 against Securities Premium Account.
 
 [B] Upon the Scheme coming into effect and with effect from Appointed
 Date-2 i.e. 1st January, 2009 (opening business hours):
 
 I.  Demerger of Radio Business of the Demerged Company and transfer and
 vesting thereof.  as a going concern into the Company.
 
 II.  Reduction of issued, subscribed and paid up Equity Share Capital
 of HT Music by Rs.  1,00,00,000 proportionately amongst the equity
 shareholders from Rs.2,00,00,000 divided into 2,00,00,000 equity shares
 of Re.1 each to Rs.1,00,00,000 divided into 1,00,00,000 equity shares
 of Re.1 each.
 
 III.  Cancellation of the entire issued, subscribed and paid-up
 Preference Share Capital of Rs.93,00,00,000.
 
 IV.  The loss of Rs.94,00,00,000 on reduction of paid-up value of
 Equity and Preference Share Capital in Demerged Company held by HT
 Media as contemplated in BII & B III above shall be adjusted against
 Securities Premium Account.
 
 The Equity Shareholders, Secured and Unsecured Creditors of the
 Company, at their respective meetings held on 28th January, 2009 in
 terms of the Order made on 19th December, 2008 by the Honble Delhi
 High Court, approved the Scheme. Thereafter, the Scheme was sanctioned
 by the Honble Delhi High Court in terms of the Order passed on 19th
 March, 2009. Consequent upon approval of the Ministry of Information
 and Broadcasting for demerger of Radio Business of the Demerged Company
 and transfer and vesting thereof into the Company (as provided in the
 Scheme) vide its order no.212/30(11 )/2006-FM dated 15th May,2009, the
 Scheme came into effect from 1 st January, 2009.
 
 In accordance with the provision of the Scheme outlined in Para A
 above, the loss of Rs.  70,50,00,000 on reduction of paid-up value of
 Equity and Preference Share Capital in Demerged Company held by the
 Company, has been adjusted against Securities Premium Account.
 
 The loss on reduction of paid-up value of Equity Share Capital and
 Preference Share Capital of the Demerged Company held by the Company
 mentioned in Para B above, has also been adjusted against Securities
 Premium Account.
 
 The application and reduction of the Securities Premium Account in two
 tranches as mentioned above, has been effected in terms of the Scheme
 and in accordance with the provisions of Sections 100 to 104 of the
 Companies Act, 1956, and as the same does not involve either diminution
 of liability in respect of unpaid share capital or payment to any
 shareholder of any paid-up share capital, the provisions of Section 101
 of the Companies Act.  1956 are not applicable, However, the Order of
 the Honble Court sanctioning the Scheme is deemed to be an Order under
 Section 102 of the Companies Act, 1956 confirming reduction of capital.
 
 In terms of the Scheme of Arrangement and Demerger, 7,69,230 Equity
 Shares of Rs.2 each of the Company shall be allotted to the external
 shareholders of the Demerged Company against consideration of Radio
 Business of the Demerged Company.
 
 The assets and liabilities, rights and obligation of Radio business of
 the Demerged Company have been vested with the Company w.e.f. Jan
 1,2009. The Scheme has, accordingly, been given effect to in these
 accounts. The amalgamation has been accounted for under the Pooling of
 Interests Method as per Scheme of Amalgamation. Accordingly, the
 assets and liabilities of the Radio Business as at Jan 1,2009 have been
 taken over at cost.
 
 The Scheme inter-alia also provides that the difference in the recorded
 value of assets in the books of account of the Resulting Company over
 recorded value of liabilities in the books of account of the Resulting
 Company and the face value of the New Equity Shares allotted by the
 Resulting Company shall be recorded by the Resulting Company as capital
 reserve, which may be treated as free reserves. Particulars of Assets
 and Liabilities acquired:
 
 The provision for tax for the current year has been computed after
 adjusting the carried forward business loss of Rs.12,378.28 lacs of the
 demerged undertaking.
 
 One Time Entry Fees paid for acquiring licences for Radio business paid
 by the Demerged Company in earlier years is capitalized and amortized
 on straight line basis. The same shall be amortized against the credit
 balance of securities premium account over the useful life of the said
 licences or their unexpired period (whichever is lower) from date of
 Merger of Radio business as per the approved Scheme. Consequently
 amount of Rs.188.73 lacs has been debited to the Securities Premium
 Account in the current year.
 
 7.  The Company has till date, invested in Firefly e-Ventures Limited
 through its wholly owned subsidiary company HT Digital Media Holdings
 Limited (formerly Hindustan Media Limited).  Rs.  5,500 lacs by way of
 Equity Share Capital. Firefly is engaged in the internet related
 business like Jobs, Social networking etc.
 
 The aforesaid company has been presently incurring losses. The
 accumulated losses as at March 31,2009 are Rs.4,127.43 lacs. The
 Company, however, is of the view that the nature of business of the
 said company being such, the losses were expected in the initial years
 and the said company based on future projections prepared for next five
 years expects to generate sufficient income which will enable it to
 offset the entire amount of accumulated losses incurred upto date. In
 view of this, no impairment provision is considered against this
 investment.
 
 8.  As approved by the shareholders at their Extra-ordinary General
 Meeting held on October 21.  2005, during an earlier year, the Company
 has given interest-free loan of Rs. 2,174.28 lacs to HT Media Employee
 Welfare Trust which in turn purchased 4,68,044 Equity Shares of Rs.
 10/- each of HT Media Limited (as on date equivalent to 23,40,220
 Equity Shares of Rs. 21- each) from the open market [average cost per
 share - Rs. 92.91 based on Equity Share of Rs. 21- each], for the
 purpose of granting Options under the HTML Employee Stock Option
 Scheme (the Scheme), to eligible employees.
 
 During the financial year 2007-08, the Scheme was modified to the
 effect - (a) Options granted w.e.f. September 15,2007 shall vest as per
 previous revised schedule of vesting period; and (b) to extend the
 coverage of the Scheme to the eligible full-time employees of the
 subsidiary company.
 
 The Options granted under the Scheme shall vest as per two Schedules of
 vesting period which are hereinafter referred to as Plan A and Plan
 B (applicable to Options granted w.e.f.  September 15,2007). Options
 granted under both the plans are exercisable for a period of 10 years
 after the scheduled vesting date of the last tranche of the Options as
 perthe Scheme.
 
 The overall expected rate of return on assets is determined based on
 the market prices prevailing on that date, applicable to the period
 over which the obligation is to be settled. There has been significant
 change in expected rate of return on assets due to the improved stock
 market scenario.
 
 The estimates of future salary increases, considered in actuarial
 valuation, take account of inflation, seniority, promotion and other
 relevant factors on long term basis. The Company expects to contribute
 Rs 275.16 lacs to gratuity fund in the year 2009-10.
 
 Disclosure of the amount required by paragraph 120(n) of AS-15 need not
 be given as the Company has adopted the standard from FY 2007-08. Prior
 years Gratuity benefit plan have been taken only for One year.