2.2 Summary of material accounting policies
a Property, plant and equipment

(i) Freehold land is carried at cost. Other property,
plant and equipment are stated at original
cost of acquisition / installation (net of goods
and service tax / cenvat credit availed), less
accumulated depreciation and impairment
loss, if any. The cost comprises purchase price,
borrowing costs if capitalization criteria are met
and directly attributable cost of bringing the
asset to its working condition for the intended
use and estimated cost for decommissioning
of an asset. Integrated Receiver Decoders
(IRD) boxes are capitalized, when available for
deployment.

(ii) Capital work-in-progress comprises cost of
property, plant and equipment and related

expenses that are not yet ready for their
intended use at the reporting date.

b Right-of-use (ROU) assets

Right-of-use (ROU) assets are stated at cost, less
accumulated depreciation and impairment loss, if
any. The carrying amount of ROU assets is adjusted
for remeasurement of lease liability, if any, in future.
Cost of ROU assets comprises the amount of initial
measurement of lease liability, lease payments made
before the commencement date (net of incentives
received), initial direct costs and present value of
estimated costs of dismantling and restoration.

c Intangible assets

(i) Intangible assets with finite useful lives that
are acquired or developed are measured on
initial recognition at cost and stated at cost less
accumulated amortization and impairment loss,
if any.

(ii) Intangible assets - television channels include
expenses incurred on development of new
television channels till the time it is ready for
commercial launch.

(iii) Intangible assets under development comprises
cost of intangible assets and related expenses
that are not yet ready for their intended use at
the reporting date.

d Depreciation / amortization on property, plant and
equipment / right-of-use assets / intangible assets

Depreciable / amortizable amount for property, plant
and equipment / right-of-use assets / intangible
assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value.

(i) Depreciation on property, plant and equipment
is provided on straight-line method over the
useful life of asset as specified in Part-C of
Schedule II to the Companies Act, 2013 except
in respect of the following categories of assets,
where the life of the assets has been assessed

lower than the life prescribed in Schedule II,
based on technical advice, taking into account
the nature of the asset, the estimated usage of
the asset, the operating conditions of the asset,
past history of replacement etc.

(ii) Leasehold improvements are amortized over
the period of lease or useful life of assets,
whichever is lower.

(iii) ROU assets are depreciated on straight line
basis from the commencement date to the end
of useful life of asset or lease term whichever is
earlier.

(iv) Intangible assets are amortized on straight line
basis over their respective individual useful
lives as follows:

e Impairment of non-financial assets

The carrying amounts of non-financial assets are
reviewed at each balance sheet date if there is any
indication of impairment based on internal / external
factors. An asset is treated as impaired when the
carrying amount exceeds its recoverable value. The
recoverable amount is the greater of the asset's net
selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted

to the present value using a pre-tax discount rate
that reflects current market assessment of the
time value of money and risks specific to the assets.
An impairment loss is charged to the standalone
statement of profit and loss in the year in which an
asset is identified as impaired. After impairment,
depreciation / amortisation is provided on the revised
carrying amount of the asset over its remaining
useful life. The impairment loss recognised in prior
accounting periods is reversed by crediting the
standalone statement of profit and loss if there has
been a change in the estimate of recoverable amount.

f Derecognition of property, plant and equipment /
right-of-use assets / intangible assets

The carrying amount of an item of property, plant
and equipment / right-of-use assets / intangible
assets is derecognized on disposal or when no
future economic benefits are expected from its
use or disposal. The gain or loss arising from the
derecognition of an item of property, plant and
equipment / ROU assets / intangible assets is
measured as the difference between the net disposal
in proceeds and the carrying amount of the item and
is recognised in the standalone statement of profit
and loss when the item is derecognized.

g Lease Liability

(i) The Company as a lessee

Lease liability associated with assets taken on
lease (except short-term and low value assets) is
measured at the present value of lease payments
to be made. Lease payments are discounted
using the interest rate implicit in the lease. Lease
payments comprise fixed payments in relation
to the lease (less lease incentives receivable),
variable lease payments, if any and other
amounts (residual value guarantees, penalties,
etc.) to be payable in future in relation to the lease
arrangement. Lease liability is subsequently
measured by increasing the carrying amount to
reflect interest on the lease liability, reducing the

carrying amount to reflect the lease payment
made and remeasuring the carrying amount to
reflect any reassessment or modification, if any.

(ii) The Company as a lessor

Leases for which the Company is a lessor
are classified as finance or operating leases.
Whenever the terms of the lease transfer
substantially all the risks and rewards of
ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified
as operating leases. Rental income from
operating leases is recognised on a straight-line
basis over the term of the relevant lease.

h Cash and cash equivalents

(i) Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand, cheques
on hand and short-term deposits with an original
maturity of three months or less, which are subject
to an insignificant risk of changes in value.

(ii) For the purpose of the standalone statement of
cash flows, cash and cash equivalents consist
of cash and short-term deposits, as defined
above, net of cash credit outstanding as they are
considered an integral part of the Company's
cash management.

i Financial Instruments

Financial instruments is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Initial recognition of financial assets and liabilities

Financial assets and financial liabilities (except
investment in subsidiaries and associates) are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the
fair value of the financial assets or financial liabilities,

Debt instruments included within the
FVTOCI category are measured initially as
well as at each reporting date at fair value.
Fair value movements are recognized
in the other comprehensive income
(OCI). However, the Company recognizes
interest income, impairment losses and
reversals and foreign exchange gain
or loss in the standalone statement of
profit and loss. On derecognition of the
asset, cumulative gain or loss previously
recognised in OCI is reclassified from
the equity to the standalone statement
of profit and loss. Interest earned whilst
holding FVTOCI debt instrument is
reported as interest income using the
effective interest rate (EIR) method.

Fair value through profit or loss
(FVTPL):

FVTPL is a residual category for debt
instruments. Any debt instrument,
which does not meet the criteria for
categorization as at amortized cost or
as FVTOCI, is classified as FVTPL.

In addition, the Company may elect to
designate a debt instrument, which
otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However,
such election is considered only if doing
so reduces or eliminates a measurement
or recognition inconsistency (referred
to as 'accounting mismatch').

Debt instruments included within the
FVTPL category are measured at fair
value with all changes recognized in the
standalone statement of profit and loss.

(ii) Investments in equity instruments

The Company subsequently measures
all equity instruments (other than
investments in subsidiaries and

associates) at fair value. Where the
Company's management has elected
to present fair value gains and losses
on equity instruments in other
comprehensive income, there is no
subsequent reclassification of fair value
gains and losses to the standalone
statement of profit and loss. Dividends
from such instruments are recognised
in the standalone statement of profit and
loss as other income when the company's
right to receive payment is established.

(iii) Investment in subsidiaries and
associates

Investment in subsidiaries and
associates are carried at cost less
impairment loss in accordance with
Ind AS 27 on "Separate Financial
Statements”. Refer note 7 for list of
investments.

B Derecognition of financial assets

A financial asset is derecognized only when

(a) The Company has transferred the rights
to receive cash flows from the financial
asset or the rights have expired or

(b) The Company retains the contractual
rights to receive the cash flows of the
financial asset, but assumes a contractual
obligation to pay the cash flows to one or
more recipients in an arrangement.

Where the entity has transferred an
asset, the Company evaluates whether
it has transferred substantially all risks
and rewards of ownership of the financial
asset. In such cases, the financial asset
is derecognized. Where the entity has
not transferred substantially all risks and
rewards of ownership of the financial asset,
the financial asset is not derecognized.

Where the entity has neither
transferred a financial asset nor retains
substantially all risks and rewards of
ownership of the financial asset, the
financial asset is derecognised if the
Company has not retained control of
the financial asset. Where the Company
retains control of the financial asset,
the asset is continued to be recognised
to the extent of continuing involvement
in the financial asset.

C Impairment of financial assets

In accordance with Ind AS 109, the Company
applies Expected Credit Losses ("ECL')
model for measurement and recognition of
impairment loss on the following financial
assets:

• Financial assets that are debt
instruments, and are measured at
amortised cost, e.g. loans and deposits;

• Financial assets that are equity
instruments and are measured at fair
value through other comprehensive
income (FVTOCI);

• Trade receivables or any contractual
right to receive cash or another financial
asset that result from transactions that
are within the scope of Ind AS 115.

Expected Credit Losses are measured
through a loss allowance at an amount
equal to:

• 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), if the
credit risk on a financial instrument has
not increased significantly; or

• Full lifetime expected credit losses
(expected credit losses that result from
all possible default events over the life
of the financial instrument), if the credit
risk on a financial instrument has
increased significantly.

In accordance with Ind AS 109 - Financial
Instruments, the Company applies ECL
model for measurement and recognition
of impairment loss on the trade
receivables or any contractual right to
receive cash or another financial asset
that result from transactions that are
within the scope of Ind AS 115 - Revenue
from Contracts with Customers.

For this purpose, the Company follows
'simplified approach' for recognition
of impairment loss allowance on the
trade receivable balances and contract
assets. The application of simplified
approach requires expected lifetime
losses to be recognised from initial
recognition of the receivables based on
lifetime ECLs at each reporting date.

In case of other assets, the Company
determines if there has been a significant
increase in credit risk of the financial
asset since initial recognition. If the credit
risk of such assets has not increased
significantly, an amount equal to twelve
months ECL is measured and recognised
as loss allowance. However, if credit risk
has increased significantly, an amount
equal to lifetime ECL is measured and
recognised as loss allowance.

When determining whether the credit
risk of a financial asset has increased
significantly since initial recognition and
when estimating expected credit losses,
the Company considers reasonable
and supportable information that is

relevant and available without undue
cost or effort. This includes both
quantitative and qualitative information
and analysis, based on the Company's
historical experience and informed
credit assessment and including
forward looking information.

The gross carrying amount of a financial
asset is written off (either partially or
in full) to the extent that there is no
realistic prospect of recovery. This is
generally the case when the Company
determines that the debtor does not
have assets or sources of income that
could generate sufficient cash flows
to repay the amounts subject to the
write off. However, financial assets that
are written off could still be subject
to enforcement activities in order to
comply with the Company's procedures
for recovery of amounts due.

II Financial liabilities and equity instruments

Debt or equity instruments issued by the
Company are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements
and the definitions of a financial liability and
an equity instrument. An equity instrument is
any contract that evidences a residual interest
in the assets of an entity after deducting all of
its liabilities. Equity shares are classified as
equity. Incremental costs directly attributable to
the issue of new shares or options are shown in
equity as a deduction, net of tax.

A Subsequent measurement

Financial liabilities measured at amortized
cost:

Financial liabilities are subsequently
measured at amortized cost using the
effective interest rate (EIR). Gains and losses

are recognized in the standalone statement
of profit and loss when the liabilities are
derecognized as well as through the EIR
amortization process. Amortized cost is
calculated by taking into account any discount
or premium on acquisition and fee or costs
that are an integral part of the EIR. The EIR
amortization is included in finance costs in
the standalone statement of profit and loss.

Financial liabilities measured at fair value
through profit or loss (FVTPL):

Financial liabilities at FVTPL include
financial liabilities held for trading and
financial liabilities designated upon initial
recognition as FVTPL. Financial liabilities
are classified as held for trading if they are
incurred for the purpose of repurchasing
in the near term. Derivatives, including
separated embedded derivatives are
classified as held for trading unless
they are designated as effective hedging
instruments. Financial liabilities at fair
value through profit or loss are carried in
the standalone financial statements at fair
value with changes in fair value recognized
in other income or finance costs in the
standalone statement of profit and loss.

B Derecognition of financial liabilities

A financial liability is derecognized when the
obligation under the liability is discharged
or cancelled or expired. When an existing
financial liability is replaced by another
from the same lender on substantially
different terms, or the terms of an existing
liability are substantially modified, such an
exchange or modification is treated as the
derecognition of the original liability and the
recognition of a new liability. The difference
in the respective carrying amounts is
recognized in the standalone statement of
profit and loss.

j Borrowings and borrowing costs

Borrowings are initially recognised net of transaction
costs incurred and subsequently measured at
amortized cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount
is recognised in the standalone statement of profit and
loss over the period of the borrowings using the EIR.

Borrowing costs that are attributable to the
acquisition or construction of qualifying assets till
the time such assets are ready for intended use are
capitalized as part of cost of the assets. All other
borrowing costs are expensed in the period they
occur.