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Network 18 Media & Investments

BSE: 532798|NSE: NETWORK18|ISIN: INE870H01013|SECTOR: Finance - General
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Notes to Accounts Year End : Mar '18

ii. Amendment to Existing issued Ind AS

The MCA has also carried out amendments following accounting standards. These are:

a Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

b Ind AS 40 - Investment Property c Ind AS 12 - Income Taxes

d Ind AS 28 - Investments in Associates and Joint Ventures and

e Ind AS 112 - Disclosure of Interests in Other Entities

Application of above standards are not expected to have any significant impact on the Company''s financial statements.

ii) Unsecured overdraft/ Cash Credit/ WCDL from a Bank is payable on demand

iii) The above bank loans carry an interest rate reference to the respective bank''s marginal cost of lending rate (''MCLR'') and mutually agreed spread.

iv) All commercial papers are repayable within a year

v) Loans from related parties repayable within a year

(*includes interest accrued and due amounting to Nil (previous year '' 1,732 lakh).

Based on the information available with the Company, the balance due to Micro & Small Enterprises as defined under the Micro, Small and Medium enterprises Development (MSMED) Act, 2006 is '' 4 lakh (Previous year '' 0.49 lakh) under the terms of the MSMED Act, 2006. Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information provided by the parties.

23.1 During the year ended 31 March, 2011, Roptonal Limited, Cyprus (''Roptonal'') a subsidiary of the Company''s then jointly controlled entity, Viacom18 Media Private Limited made a public offer for purchase of entire issued capital of The Indian Film Company Limited, Guernsey (''TIFC''). The Company and its subsidiary, Network18 Holdings Limited, Mauritius (''Network18 Holdings''), in their capacity as shareholders in TIFC accepted the public offer. Further, pursuant to an agreement between Roptonal and Network18 Holdings, Network18 Holdings has agreed to indemnify Roptonal against the amount, if any, by which the net cash generated by TIFC from its existing film library in respect of the period from the date on which the aforementioned public offer becomes unconditional up to 21st July, 2014 is less than the net asset value of the film library as per the TIFC''s therein mentioned accounts for the year ended 31st March, 2010.

Network18 Holdings has also agreed to indemnify Roptonal against certain Indian tax liabilities that may potentially arise in TIFC or Roptonal in respect of certain withholding tax recoveries stated in TIFC''s financial statements and other taxes relating to the sale of Network18 Holding''s shares in TIFC. The aforementioned agreement further provided that if Network18 Holding does not undertake the indemnity obligations agreed in the agreement, the indemnity shall be provided by the Company.

During the previous years, based on the assessment of estimated cash flow of the indemnified assets, the Company has estimated the liability as '' 21,726 lakh.

27.1 Defined contribution plans

The Company makes Provident Fund, Pension Fund and Employee State Insurance scheme contributions to the relevant authorities, which are defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

27.2 Defined benefit plans

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated absences is recognized in the same manner as gratuity.

IALM - Indian Assured Lives Mortality

The discount rate is based on the prevailing market yields of Government of India Bonds as at the Balance Sheet date for the estimated terms of the obligations.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

These plans typically expose the Company to actuarial risks such as: interest risk, longevity risk and salary risk.

(A) Interest risk - A decrease in the discount rate will increase the plan liability.

(B) Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

(C) Salary risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

The operating leases mainly relates to office premises with lease terms of between 2 to 10 years. Most of the operating lease contract contains market review clauses for rate escalation.

Note 361 Foreign exchange exposure/ currency risk

The Company does not use foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to firm commitments and forecasted transactions.

Note 371 Capital and Financial Risk Management

37.1 Capital Management

The Company manages its capital to ensure that it will continue as going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company monitors Capital using a gearing ratio.

The capital structure of the Company consists of debt, cash and cash equivalent and equity.

37.2 Financial Risk Management

The Company''s activities exposes it mainly to credit risk and liquidity risk, The finance team identifies and evaluates financial risk in close coordination with the Company''s business teams.

(a) Credit risk

Credit risk is the risk that customers or counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities which is primarily trade receivables.

Customer credit risk is managed by each business team subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customers receivables are regularly monitored.

An impairment analysis is performed at each reporting date for major customers. Receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to receivables as low.

(b) Liquidity Risk

The Company closely monitors its risk of shortage of funds. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of commercial papers and cash credit/ overdrafts from banks. The Company assessed the concentration of risk with respect to its debt as low. As at reporting date, all financial liabilities of the Company are short term. Further, the Company believes that carrying value of all of its financial liabilities including debt approximates its fair value.

*Excludes financial assets measured at cost (Refer Note 2.1)

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level 1: Inputs are Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs are other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumption that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

Note 39 The Scheme for Merger by Absorption (the ''Scheme'') for merger of Digita118 Media Limited, Capita118 Fincap Private Limited, RVT Finhold Private Limited, RRK Finhold Private Limited, RRB Investments Private Limited, Setpro18 Distribution Limited, Reed Infomedia India Private Limited, Web18 Software Services Limited, Television Eighteen Media and Investments Limited, Television Eighteen Mauritius Limited, Web18 Holdings Limited, E18 Limited and Network18 Holdings Limited in to the Company with appointed date as 1st April, 2016, has been filed with National Company Law Tribunal, Mumbai Bench, for approval. The Company has decided to continue Colosceum Media Private Limited, a wholly owned subsidiary of the Company, as a seperate entity and has filed the Scheme accordingly. Upon receipt of approval, the Scheme shall be given effect to in the financial statements of the Company.

Note 40 The Company has transferred Burrp undertaking as a going concern on slump sale basis with effect from 1st July, 2017 by way of a Business Transfer Agreement with Foodfesta Wellcare Private Limited (a subsidiary of Big Tree Entertainment Private Limited (Big Tree). Big Tree is an associate of the Company.

Note 41 TV18 Home Shopping Network Limited (Homeshop18) acquired Shop CJ Network Private Limited. Homeshop18 ceased to be subsidiary of the Company and became an associate w.e.f 15th February, 2018.

Note 42 Segment Reporting:

The Company is engaged in only one segment i.e. Media Operations and hence there is no separate reportable segment as per Ind AS 108 ''Operating Segments''. Since the Company''s operations are primarily in India, it has determined single geographical segment.

One customer represents more than 10% of Company''s total revenue during the current year as well as previous year.

Note 43 Previous year''s figures have been re-grouped wherever necessary to make them comparable to current year''s figures.

Note 44 The financial statements were approved for issue by the Board of Directors on 24th April 2018.

Source : Dion Global Solutions Limited
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