Moneycontrol Be a Pro
Get App
SENSEX NIFTY
Moneycontrol.com India | Notes to Account > Media & Entertainment > Notes to Account from Zee Media Corporation - BSE: 532794, NSE: ZEEMEDIA
YOU ARE HERE > MONEYCONTROL > MARKETS > MEDIA & ENTERTAINMENT > NOTES TO ACCOUNTS - Zee Media Corporation

Zee Media Corporation

BSE: 532794|NSE: ZEEMEDIA|ISIN: INE966H01019|SECTOR: Media & Entertainment
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Dec 06, 16:00
6.89
-0.36 (-4.97%)
VOLUME 175,680
LIVE
NSE
Dec 06, 15:49
7.00
-0.35 (-4.76%)
VOLUME 374,639
Mar 17
Notes to Accounts Year End : Mar '18

1 Corporate information

Zee Media Corporation Limited (“ZMCL” or “the Company”) is incorporated in the State of Maharashtra, India and is listed on BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE) in India. The registered office of the Company is situated at 14th Floor, ‘A’ Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai - 400013, Maharashtra, India. The Company is mainly engaged in the business of broadcasting of satellite television channels i.e. news / current affairs and regional language channels and sale of television programs.

The separate financial statements (hereinafter referred to as “Financial Statements”) of the Company for the year ended 31 March 2018 were authorized for issue by the Board of Directors at their meeting held on 16 May 2018.

2. Critical accounting judgment and estimates

The preparation of financial statements in conformity with Ind AS requires the management to make estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amount of assets, liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year The Management believes that these estimates are prudent and reasonable and are based on the Management’s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known or materialized. This note provides an overview of the areas that involves a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

a Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.

Potential liabilities that have a low probability of crystallizing or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. There can be no assurance regarding the final outcome of these legal proceedings.

b Useful lives and residual values

The Company reviews the useful lives and residual values of property, plant and equipment, investment property and intangible assets at each financial year end.

c Impairment testing

(i) Impairment of financial assets

The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(ii) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the future years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate.

d Income taxes

(i) The Company’s tax charge is the sum of the total current and deferred tax charges. The calculation of the Company’s total tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process.

(ii) Accruals for tax contingencies require management to make judgments and estimates in relation to tax related issues and exposures.

(iii) The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. Where the temporary differences are related to losses, the availability of the losses to offset against forecast taxable profits is also considered. Recognition therefore involves judgment regarding the future financial performance of the particular legal entity or Company in which the deferred tax asset has been recognized.

e Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.

In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date. For details of the key assumptions used and the impact of changes to these assumptions refer note 44.

f Defined benefit obligation

The cost of post-employment and other long-term benefits is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include determination of discount rates, expected rate of return on assets, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The assumptions used are disclosed in note 45.

3. Recent accounting pronouncements

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Indian Accounting Standard (Ind AS) 115 “Revenue from Contracts with Customers”; notifying amendments to Ind AS 12 “Income Taxes” and Ind AS 21 “The Effects of Changes in Foreign Exchange Rates”. Ind AS 115, amendments to the Ind AS 12 and Ind AS 21 are applicable to the Company w.e.f. 1 April 2018.

a Ind AS 115 “Revenue from Contracts with Customers”

The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further this standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits two possible methods of transition: a) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - “Accounting Policies, Changes in Accounting Estimates and Errors”. b) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The Company is evaluating the requirements of the above Ind AS and its impact on the financial statements.

b Amendments to Ind AS

(i) Ind AS 12 “Income Taxes”

The amendment considers that tax law determines which deductions are offset against taxable income and that no deferred tax asset is recognized if the reversal of the deductible temporary difference will not lead to tax deductions. Accordingly, segregating deductible temporary differences in accordance with tax law and assessing them on entity basis or on the basis of type of income is necessary to determine whether taxable profits are sufficient to utilize deductible temporary differences.

(ii) Ind AS 21 “The Effects of Changes in Foreign Exchange Rates”

The amendment to this Ind AS requires foreign currency consideration paid or received in advance of an item of asset, expense or income, resulting in recognition of a non-monetary prepayment asset or deferred income liability to be recorded in the Company’s functional currency by applying the spot exchange rate on the date of transaction.

The date of transaction which is required to determine the spot exchange rate for translation of such items would be earlier of:

- the date of initial recognition of the non-monetary prepayment asset or deferred income liability, and

- the date on which the related item of asset, expense or income is recognized in the financial statements. If the transaction is recognized in stages, then a spot exchange rate for each transaction date would be applied to translate each part of the transaction.

The Company is evaluating the requirements of the above amendments and its impact on the financial statements.

(i) For details of property, plant and equipment and capital work-in-progress pledged as security, refer note 46

(ii) Leasehold buildings include net carrying values of Rs.42.60 million (2017: Rs.20.64 million) in respect of which the letters of allotment are received and supplementary agreements entered, however, lease deeds are pending execution.

(iii) Legal titles of freehold land (net carrying values of Rs.8.57 million (2017: Rs.8.57 million)) and freehold building (net carrying values of Rs.13.99 million (2017: Rs.14.27 million)), received pursuant to the Scheme of Arrangement and Amalgamation (refer note 38(a)), are yet to be transferred in the name of the Company.

a) Optionally convertible debentures (OCDs) have a tenure of five years from the date of allotment. The Company has an option to convert each OCD of Rs.10 each into five equity shares of Rs.1 each at any time after initial period of eighteen months. Further, the Company as well as the issuer has the option to seek redemption of OCDs during the tenure, either in full or in part. OCDs not converted into equity shares at the end of the tenure shall be redeemed at par value by the issuer

b) Compulsorily convertible debentures (CCDs) have a tenure of eighteen years from the date of allotment. The Company can convert the CCD into equity shares of Rs.10 each in the ratio of 1:1 at any time after initial period of eighteen months, but within eighteen years from the date of allotment.

c) 6% Non-cumulative, non-convertible, redeemable preference shares of Rs.1 each are redeemable at par after twenty years from the date of allotment (i.e. on 01 November 2036).

d) The Company intends to dispose off the investment, hence reclassified as current investment (Refer note 13).

ii) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.1 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per the records of the Company, including its register of shareholders/ members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

iv) The Company has not issued any bonus shares or bought back any shares during five years preceding 31 March 2018.

v) 122,381,817 Equity shares of Rs.1 each fully paid up were allotted on 09 June 2014 for consideration other than cash, pursuant to the Scheme of Amalgamation of Essel Publishers Private Limited with the Company.

vi) The Company had instituted an Employee Stock Option Plan (ZNL ESOP 2009) as approved by the Board of Directors and Shareholders of the Company in 2009 and amended from time to time for issuance of stock options convertible into equity shares not exceeding in the aggregate 5% of the issued and paid up capital of the Company as at 31 March 2009 i.e. up to 1 1,988,000 equity shares of Rs.1 each, to the employees of the Company as well as that of its subsidiaries and also to the directors (excluding independent director) of the Company at the market price determined as per the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The said Scheme is administered by the Nomination and Remuneration Committee of the Board. The Company has not granted any options till 31 March 2018.

(i) Capital Reserve is created pursuant to the various Schemes of Arrangement / Amalgamation over the years.

(ii) Securities premium represents the premium on equity shares issued.

(iii) General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

(iv) Retained earnings represent the accumulated earnings net of losses if any made by the Company over the years.

(v) Expenses incurred amounting to Rs.30.66 million on account of Rights issue of equity shares in the financial year 2015-16, were adjusted against equity share capital till previous year ended 31 March 2017. These expenses have been reclassified and adjusted against securities premium reserve in these financial statements, in line with the requirement of Ind AS 32 “Financial Instruments : Presentation”.

Nature of security and terms of repayments for borrowings:

i) (a) Term loan from bank of Rs.625.88 million (2017: Nil) is secured by way of first charge (hypothecation / equitable mortgage) on the entire movable and immovable assets, current assets including receivables (present and future) and exclusive charge on debt service reserve account and/or any other bank account of the Company. The loan is repayable in twelve half-yearly installments as per the repayment schedule commencing from June 2019 and carries interest @ 1-year MCLR 0.75 % p.a. payable monthly.

(b) Term loan from bank of Nil (2017: Rs.633.11 million) is secured by way of first hypothecation charge on entire movable fixed assets except vehicles. The loan carried interest @1-year MCLR 2.75% p.a. payable monthly and was repayable in twenty-one quarterly installments as per repayment schedule commencing from October 2015. The said loan has been prepaid during the year

ii) Vehicle loans from banks and others are secured by way of hypothecation of specific vehicles, carries interest ranging from 7.90% to 10.30% p.a. and are repayable upto March 2022.

(a) Cash credit from bank of Rs.606.31 million (2017: Nil) is secured by first charge (hypothecation / equitable mortgage) on the entire movable and immovable assets, current assets including receivables (present and future) and exclusive charge on debt service reserve account and/or any other bank account of the Company.

iii) Cash credit from bank of Nil (2017: Rs.431.16 million) is secured by way of pari passu hypothecation charge on entire current assets and collaterally secured by first hypothecation charge on entire movable fixed assets except vehicles.

Note: The statutory tax rate is the standard effective corporate income tax rate in India. The tax rate for deferred tax assets for the year ended 31 March 2018 is 34.944% (2017: 34.608%). Deferred tax assets and liabilities are offset where the Company has a legally enforceable right to do so.

4 Leases

(a) Operating lease

The Company has taken office, residential facilities, plant and machinery (including equipment) etc. under cancellable / non-cancellable operating lease agreements, that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the lease varies from eleven to one hundred and twenty months. The rental obligations are as follows:

(b) Finance lease

The Company does not have any lease in the nature of finance lease.

A The Company has received legal notices of claims/law suits filed against it relating to infringement of copyrights, defamation suits etc. in relation to programs telecasted / other matters. The claim amount is based on best possible estimate arrived at on the basis of available information. The Company has engaged reputed advocates to protect its interest and has been advised that it has strong legal position against such disputes. In the opinion of the management, no material liability is likely to arise on account of such claims / law suits.

* Corporate guarantees include premium accrued on debentures of Rs.912.09 million (2017: Rs.549.23 million)

5 Micro, Small and Medium Enterprises

The Company has no dues to Micro, Small and Medium Enterprises during the year ended 31 March 2018, on the basis of information provided by the parties and available on record. Further, there is no interest paid / payable to Micro, Small and Medium Enterprises as at 31 March 2018.

6 Information required under Section 186(4) of the Companies Act, 2013

(a) Loans given and security provided

During the year, the Company has not given any loan or provided security.

(b) Investments made

There are no investments made by the Company other than those disclosed in Note 8, 13 and 38(b) of the financial statements.

7 The Management is of the opinion that its international and domestic transactions are at arm’s length as per the independent accountants report for the year ended 31 March 2017. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm’s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

8 Pursuant to the Letter of Offer dated 16 March 2015 for Rights Issue of equity shares, the Company had allotted 108,643,732 Rights equity shares of Rs.1 each, fully paid up, on 18 April 2015, at a price of Rs.18 per share (including premium of Rs.17 per share). The said Rights Issue was fully subscribed for an amount aggregating to Rs.1,955.59 million, resulting in increase in Paid-up Share Capital of the Company to Rs.470.79 million, comprising of 470,789,505 equity shares of Rs.1 each. The said proceeds have been utilized for the stated purposes as per details given below:

9 Scheme of Arrangement and Amalgamation

The Board of Directors of the Company at their meeting held on 27 October 2016 approved a Scheme of Arrangement and Amalgamation between the Company (“the Company, “ZMCL” or the “Demerged company”) and its subsidiaries Diligent Media Corporation Limited (“DMCL” or the “Resulting Company”), Mediavest India Private Limited (“MIPL” or the “Transferor Company 1”), Pri-Media Services Private Limited (“PSPL” or the “Transferor Company 2”), Maurya TV Private Limited (“MTPL” or the “Transferor Company 3”) and their respective shareholders and Creditors (hereinafter referred as “the Scheme”), inter alia, for a) Demerger of the Print Media business undertaking of the Company and vesting with DMCL; b) Amalgamation of MIPL and PSPL with DMCL; and c) Amalgamation of MTPL with the Company, with effect from Appointed Date of 1 April 2017. The Scheme has been approved by the Mumbai bench of Hon’ble National Company Law Tribunal (NCLT) vide its Order dated 8 June 2017 and the certified copy of the Order approving the Scheme has been filed with the Registrar of Companies on 28 July 2017 (the “Effective date”). The effect of the Scheme has been given in these standalone financial statements for the year ended 31 March 2018.

a) Merger of MTPL with the Company

Pursuant to the Scheme,

i) Entire business and whole of the undertaking of MTPL merged with the Company with effect from the appointed date by applying Pooling of Interest method as laid down in Appendix C of the Indian Accounting Standard (Ind AS) 103 “Business Combinations” relating to accounting for common control business combinations.

ii) Inter-company balances, loan and advances, investments in share have been cancelled.

iii) In accordance with the requirements of para (a) (iii) of Appendix ‘C’ of Ind AS 103 “Business Combinations”, the financial statements of the Company as at end for the year ended 31 March 2017 have been restated as if the business combination had occurred from the beginning of the preceding period i.e. 1 April 2016. The impact of such restatement on the reserves as at 1 April 2016, balance sheet as at 31 March 2017 and the statement of profit and loss for the year ended on that date is as under:

iv) The authorized share capital of the Company has increased by 230,000,000 equity shares of Rs.1 each.

b) Demerger of Print Media Business Undertaking

Pursuant to the Scheme,

i) All assets and liabilities of the Print Media Business Undertaking of the Company, which comprises of ‘I am in dna of India’ project of the Company and the newspaper printing business carried out through PSPL and MIPL, stand transferred to and vested with DMCL at their carrying values on going concern basis with effect from 1 April 2017;

ii) Excess of assets over liabilities amounting Rs.46.03 million has been adjusted to the capital reserve of the Company as detailed below:

iii) The Board of Directors of DMCL on 9 October 2017 allotted 1 17,708,1 18 equity shares of Rs.1 each fully paid up of DMCL to the shareholders of the Company in the ratio of one equity share of Rs.1 each of DMCL for every four equity shares of Rs.1 each of the Company.

iv) DMCL ceased to be a subsidiary with effect from 1 April 2017.

c) Discontinued Operations

The financial statements of the Print Media Business Undertaking of the Company for the year ended 31 March 2017 and assets and liabilities as at that date, being discontinued operations, have been restated and disclosed separately under discontinued operations as required by the Indian Accounting Standard 105 “Non-current Assets Held for Sale and Discontinued Operations” and Schedule III of the Companies Act, 2013.

Information in respect of discontinued operations i.e., Print Media Business Undertaking is as under:

i) Balance sheet as at 31 March 2017 - Refer note 38(b)(ii) above

ii) Statement of profit and loss for the year ended 31 March 2017

10 Disclosure as required by Schedule V(A) (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

During the year no loans and advances were given to any subsidiaries, associates or any firm / company in which directors are interested.

11 Corporate Social Responsibility (CSR)

During the year the Company has spent Rs.5.50 millions (2017: Rs.3.37 millions) towards CSR initiatives as required by Section 135 read with Schedule VII of the Companies Act, 2013. CSR spend has been charged to the statement of profit and loss under “Other expenses’ in line with ICAI note issued in May 2015.

12 Segment information

The financial statements of the Company contain both the consolidated financial statements as well as separate financial statements. Hence, the Company has presented segment information on the basis of consolidated financial statements as permitted by Ind AS 108 “Operating Segments”. The Company has only one major identifiable business segment viz. broadcasting of satellite television channels.

13 A Financial instruments a Financial risk management objective and policies

The Company’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, trade and other receivables, and cash and bank balances that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Board provides guidance for overall risk-management, as well as policies covering specific areas such as credit risk, liquidity risk and investment of excess liquidity.

(i) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks. Financial instruments affected by market risk includes borrowings, deposits and other financial instruments.

1 Interest rate risk

This refers to risk to Company’s cash flow and profits on account of movement in market interest rates.

For the Company the interest risk arises mainly from interest bearing borrowings which are at floating interest rates. To mitigate interest rate risk, the Company closely monitors market interest and as appropriate makes use of optimized borrowing mix / composition etc. Vehicle loans carrying fixed coupon rate and hence not considered for calculation of interest rate sensitivity of the Company.

(b) Interest rate sensitivity analysis

The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rate of 50 basis points increase or decrease. The calculations are based on the variable rate borrowings outstanding at balance sheet date. All other parameters are held constant.

2 Foreign currency risk

Currency risk is the risk that the fair value or future cash flows fluctuate because of changes in market prices. The Company is exposed to foreign exchange risk on their receivables and payables which are mainly held in the United State Dollar (“USD”), the Euro (“EUR”) and the Great Britain Pound (“GBP”). Consequently the Company is exposed primarily to the risk that the exchange rate of the Indian Rupees (“INR”) relative to the USD, the EUR and the GBP may change in a manner that has an effect on the reported values of the Company’s assets and liabilities that are denominated in these foreign currencies. Exchange rate exposures are not hedged considering the insignificant impact and period involved on such exposure.

The following table sets forth information relating to unhedged foreign currency exposure at the end of the reporting period:

Sensitivity to foreign currency risk

The following table demonstrates the sensitivity in the USD, EUR and GBP with all other variables held constant. The below impact on the Company’s profit before tax is based on changes in the fair value of unhedged foreign currency monetary assets and liabilities at balance sheet date:

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, deposits given, investments and balances at bank.The Company measures the expected credit loss of trade receivables based on financial conditions / market practices, credit track record in the market, analysis of historical bad debts and past dealings for extension of credit to customers. Individual credit limits are set accordingly. The Company monitors the payment track record of the customers and ageing of receivables. Outstanding customer receivables are regularly monitored. The Company considers the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has also taken advances and security deposits from some of its customers, which mitigate the credit risk to an extent.

Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in redeemable preference shares, optionally convertible debentures, compulsorily convertible debentures and other debt instruments. Security deposits against leasing of premises are refundable upon closure of the lease and credit risk associated with such deposits is relatively low.

The following table gives details in respect of percentage of revenues generated from top 10 customers :

(iii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, trade payables and other financial liabilities. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of the financial assets and liabilities. It maintains adequate sources of financing including loans, debt and overdraft from banks. It also enjoys strong access to domestic capital markets across various debt instruments.

Exposure to liquidity risk

The table below provides details regarding the contractual maturities of financial liabilities (including interest accrued) at the reporting date. The contractual cashflow amounts are gross and undiscounted.

* Current maturities of borrowings aggregating Rs.179.85 million form part of other current financial liabilities hence the same is not considered separately in borrowings

B Capital management Risk management

The Company manages its capital structure and makes necessary adjustments in light of changes in economic conditions and the requirement of financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or raise / retire debt. The primary objective of the Company’s capital management is to maximize the shareholders’ value.

For the purpose of the Company’s capital management, equity includes issued capital, securities premium and other reserves. Net debt includes loans less cash and bank balances. The Company manages capital by monitoring gearing ratio which is net debt divided by equity plus net debt.

* Including deposits with banks having original maturity period of more than twelve months of Rs.36.12 million (2017: Rs.17.84 million) shown under other current and non-current financial assets

Loan covenants

Borrowings contain certain debt covenants relating to limitation on net debt to EBITDA ratio and debt service coverage ratio. The Company has also satisfied all other debt covenants prescribed in the respective sanction of bank loan.

# represents Rs.50 only.

* investment as at 31 March 2018 is fully impaired.

(ii) Fair value hierarchy

The fair values of the financial assets and liabilities are the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the Indian Accounting Standards. An explanation for each level is given below.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in this level.

(a) The Company’s borrowings that have been contracted at floating rates of interest are reset at short intervals. Accordingly, the carrying value of such borrowings approximates fair value.

(b) The fair values for other non-current financial assets and liabilities and long-term borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

(c) The carrying amounts of trade receivables, cash and bank balances, current borrowings, trade payables and other current financial liabilities are considered to be approximately equal to the fair value due to the shortterm maturities of these financial assets/liabilities.

(d) There have been no transfers between level 1, level 2 and level 3 for the years ended 31 March 2018 and 31 March 2017

14 Gratuity and other long-term benefit plans

The disclosure of employee benefits as defined in the Ind AS 19 - “Employee Benefits” are given below:

(a) Defined contribution plan:

“Contribution to provident and other funds” is recognized as an expense in note 25 “Employee benefits expense” of the statement of profit and loss.

(b) 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 gratuity is non funded.

VII. Quantitative sensitivity analysis

The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 100 basis points while holding all other assumptions constant.

Notes:

(a) The amount recognized as expenses and included in note 25 ‘Employee benefits expense’ are gratuity Rs.19.08 million net of capitalization (2017: ‘ 13.43 million net of capitalization) and leave encashment Rs.27.74 million (2017: Rs.20.73 million net of amount capitalized). Net interest cost on defined benefit obligation recognized in note 26 ‘Finance costs’ is Rs.8.64 million (2017: Rs.8.08 million). The remeasurement of the net defined benefit liability is included in other comprehensive income.

(b) 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.

VIII. The Company is exposed to various actuarial risks which are as follows:

(a) Interest rate risk - The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the defined benefit and will thus result in an increase in the value of the liability.

(b) Liquidity risk - This is the risk that the Company is not able to meet the short-term benefit payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

(c) Salary escalation risk - The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

(d) Regulatory risk - Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs.20,00,000).

(e) Demographic risk - The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse as compared to the assumptions.

(c) Other long-term benefits

The obligation for leave benefits (non funded) is also recognized using the projected unit credit method and accordingly the long term paid absences have been valued.

15 Collateral / security pledged

The carrying amount of assets pledged as security for current and non-current borrowings of the Company are as under:

16 Related party disclosures (A) List of parties where control exists: i) Direct subsidiaries

Zee Akaash News Private Limited (extent of holding 60%)

Ez-Mall Online Limited (wholly owned subsidiary - incorporated on 21 June 2017)

Mediavest India Private Limited (extent of holding 100%) A Pri-Media Services Private Limited (extent of holding 100%) A Maurya TV Private Limited $

ii) Indirect subsidiary

Diligent Media Corporation Limited (extent of holding 100%) A

iii) Associates

Today Merchandise Private Limited (extent of holding 49% w.e.f. 01 October 2016)

Today Retail Network Private Limited (extent of holding 49% w.e.f. 01 October 2016)

iv) Other related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year

ATL Media Limited, Creantum Securities Private Limited, Cyquator Media Services Private Limited, Digital Subscriber Management and Consulting Private Limited, Diligent Media Corporation Limited, Dish TV India Limited, Essel Business Excellence Services Limited, Essel Corporate Resources Private Limited, Essel Finance VKC Forex Limited, Essel Realty Private Limited, Essel Vision Productions Limited, India Webportal Private Limited, Jay Properties Private Limited, Pan India Network Limited, Planetcast Media Services Limited (upto 31 March 2017), Sarthak Entertainment Private Limited, Siti Networks Limited, Subhash Chandra Foundation (formerly Dr Subhash Chandra Foundation), Taj Television (India) Private Limited (upto 28 February 2017), Zee Digital Convergence Limited, Zee Entertainment Enterprises Limited, Zee Learn Limited, Zee Turner Limited, Zee Unimedia Limited.

v) Key Management Personnel / Directors

Dr. Subhash Chandra (Non-executive Chairman upto 23 May 2016), Rajiv Singh (Executive Director & COO w.e.f. 09 September 2016), Jagdish Chandra (Executive Director - Regional News Channels w.e.f. 03 February 2017), Rajendra Kumar Arora (Executive Director & CEO from 24 May 2016 to 30 August 2016), Rashmi Aggarwal, Kanta Devi Allaria, Surjit Banga and Uma Mandavgane.

A Demerged w.e.f. 01 April 2017 and became other related party.

$ Merged with the Company w.e.f. 01 April 2017 (Refer note 38)

(a) * includes expenses capitalized

(b) The above disclosures are excluding Ind AS adjustments.

(c) Parties with transaction less than 10% of the group total are grouped under the head “Other related parties”.

(d) Remuneration to executive directors is based on Form 16 issued under the Income Tax Act, 1961 and excludes leave encashment Rs.0.53 million (2017: Rs.0.25 million) and gratuity Rs.0.01 million (2017: Rs.0.00 million) provided on the basis of actuarial valuation.

(e) Corporate guarantee outstanding includes Rs.912.09 million (2017: Rs.549.23 million), being premium accrued and payable at the time of redemption of debentures.

(f) Transaction pursuant to the Scheme of Arrangement and Amalgamation (refer note 38) are not included in above details.

17 During the year ended 31 March 2017, the Board had approved acquisition of initial 49% Equity stake in the Radio Broadcasting business of Reliance Broadcast Network Limited (RBNL). The said proposal is awaiting approval from Ministry of Information and Broadcasting.

18 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s classifications / disclosures.

Source : Dion Global Solutions Limited
Quick Links for zeemediacorporation
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.