h) Provisions, contingent liabilities and contingent assets
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. Provisions are not recognised for future operating losses.
If the effect of time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realization of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.
i) Revenue recognition
(i) Revenue from contract with customers
Revenue from contract with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Syndication revenue represents revenue received from grant of licence to the Company's Sites and YouTube channels for the purpose of advertisement operations in terms of advertisement servicing and search engine optimization. Syndication revenue is recognized over a period of time on performance of the obligation as per the terms of the contract.
Royalty revenue is recognized over a period of time on performance of obligation as per agreed terms.
Revenue from sale of images are recognised at a point in time when the images are delivered to the customers as per the agreement.
(ii) Interest income is recognised using the effective interest rate, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial assets. Interest income is included in other income in the statement of profit and loss.
Contract balances Contract assets:
Contract assets is recognised where there is excess of revenue earned over billing done. Contract assets are classified as unbilled revenue where there is unconditional right to receive cash and only passage of time is required as per contractual terms.
Contract liabilities:
Contract liabilities primarily relate to the consideration received from customers in advance for the Company's performance obligations which is classified as advance from customers and unearned revenue which is recognised when there is billings in excess of revenues.
Trade receivables:
A receivable represents the Company's right to an amount of consideration under the contract with a customer that is unconditional and realizable on the due date.
j) Retirement and other Employee benefits
(i) The Company operates both defined benefit and defined contribution schemes for its employees. For defined contribution schemes the amount charged as expense is equal to the contributions paid or payable when employees have rendered services entitling them to the contributions. For defined benefit plans actuarial valuations are carried out at each balance sheet date using the Projected Unit Credit Method. All such plans are unfunded.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/ (asset) are recognized in the statement of profit and loss. Remeasurements of the net defined benefit liability/ (asset) comprising actuarial gains and losses (excluding interest on the net defined benefit liability/asset)
are recognised in Other Comprehensive Income (OCI). Such remeasurements are not reclassified to the statement of profit and loss, in the subsequent periods.
(ii) Other long-term employee benefits: The Company has a policy on compensated absences (leave liability) which are both accumulated and non-accumulated. The expected cost of accumulated compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulated compensated absences is recognized in the period in which the absences occur.
The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond twelve months, the same is presented as non-current liability.
(iii) Short-term employee benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered as a liability.
k) Transactions in foreign currencies
The functional currency of the Company is Indian Rupees ("Rs") which is also the presentation currency. All other
currencies are accounted as foreign currency.
(i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.
(ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting date of such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.
(iii) Non-monetary foreign currency items are carried at historical cost are translated at the exchange rate prevalent at the date of the transaction.
l) Income taxes
Tax expense comprises of current and deferred tax.
(i) Current tax
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and previous year is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity. Current tax in accordance with the Income tax Act 1961 for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(ii) Deferred tax
Deferred tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset current tax assets and liabilities and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
(i i i) Presentation of current and deferred tax
Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
m) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss (excluding other comprehensive income) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share splits (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
n) Discontinued operations
Discontinued operations are excluded from the results of continuing operations and are presented separately as profit or loss from discontinued operations in the statement of profit and loss. Also, comparative statement of profit and loss is represented as if the operation had been discontinued from the start of the comparative period.
Assets and liabilities classified as discontinued operations are presented separately from other assets and liabilities in the balance sheet.
A discontinued operation is a component of the Company that either has been disposed off, or is classified as held for sale, and:
• Represents a separate major line of business or geographical area of operations,
• Is part of single co-ordinated plan to dispose off a separate major line of business or geographical area of operations and,
• Is a subsidiary acquired exclusively with a view to resale.
o) Exceptional items
Certain occasions, the size, type, or incidences of the item of income or expenses pertaining to the ordinary activities of
the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expenses is classified as an exceptional item and accordingly, disclosed in the financial statements.
2.3 Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March 2024, MCA has not notified
any new standards or amendments to the existing standards applicable to the Company.
3 Critical accounting judgements 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 recognised 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 and commitments
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 crystallising 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.
b) Useful lives and residual values
The Company reviews the useful lives and residual values of property, plant and equipment 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 judgement 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 judgements 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 judgement regarding the future financial performance of the Company.
e) Defined benefit obligation
The cost of the defined benefit gratuity plan and other post-employment employee benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, 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.
f) 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 29.
29 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 includes loans, trade and other receivables and cash and cash equivalents.
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 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.
The Company's is not exposed to interest rate risk as the Company is not having any borrowings except 6% Non- cumulative, non convertible, preference shares aggregating to Rs. 43,626.56 lakhs (Previous year: Rs 43,636.56 lakhs).
Interest rate sensitivity analysis
The borrowing of the company includes preference shares which carries fixed coupon rate and hence the company is not exposed to interest rate risk.
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"), 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, 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.
3) 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.
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, loan and deposits given 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 high, as the major revenue and trade receivables are concentrated to less than 10 customers.
ii) 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 i.e. 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 . It also enjoys access to domestic capital markets.
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 cash flow amounts are gross and undiscounted.
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 and other reserves. Net debt includes borrowings less cash and cash equivalents. The Company manages capital by monitoring gearing ratio which is net debt divided by equity plus net debt.
(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.
(f) During the previous year, the Company elected to exercise the option available under section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Company had recognized provision for current tax and deferred tax for the year ended 31 March 2023 and re-measured its net deferred tax assets basis the income rate prescribed in the said section. Further the Company had reassessed its net deferred tax assets and restricted the same to the extent convincing evidence that taxable income will be available against which such deferred tax assets can be realised. These events has resulted in one time charge of Rs 529.61 lakhs in the statement of profit and loss for the year ended 31 March 2023.
# (a) Income tax demands mainly include appeals filed by the Company before various appellate authorities against the disallowance of expenses / claims and demand related to non-deduction / short deduction of tax at source etc. The management is of the opinion that its tax cases will be decided in its favour and hence no provision is considered necessary at this stage.
# (b) The Company is in appeals before appellate authorities in respect of additions and disallowances made on assessment of various years. The addition and disallowances have resulted into set off of available tax losses and unabsorbed depreciation. The management is of the view that relief is expected to be granted by the appellant authorities.
# (c ) Excludes demand Rs 5.47 lakh related to short/non deduction of tax at source which are under rectification by the Company and no liability is expected.
## The Company has received legal notices of claims/law suits filed against it relating to infringement of copyrights, defamation suits etc. in relation to news published in DNA news paper, magazine, website/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.
@ Demand raised by GST department for excess ITC claimed and the Company had paid under protest Rs. 9.71 lakhs (previous year Rs 9.71 lakhs). The Company has filed appeal against the demand raised. (Refer note 11).
@@Demand raised by GST department for service tax (excluding penalty) of Rs 176.41 lakhs (including unquantified interest). The appeal could not be submitted online due to technical error in the demand order. The appeal will be filed on rectification of the demand order by the tax authorities. Tax required to be paid before filing appeal has been paid by the Company.
(b) Capital and other commitments
Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) Rs. nil (Previous year: nil).
42 The accumulated losses of the Company as at 31 March 2024 have exceeded its paid-up capital and reserves by Rs 25,740.17 lakhs (previous year Rs 39,422.85 lakh). This event indicates existence of material uncertainty that may cast significant doubt on the Company's ability to continue as going concern. The Company has taken steps to expand its digital media operations which has resulted in improvement in revenue and profit from the operations. Considering the liquidity position of the Company, future business plan and other factors as mentioned above, the management of the Company has prepared these financial statements on going concern basis.
43 The Corporate Guarantee provided by Zee Media Corporation Limited (ZMCL) in relation to the non-convertible debentures issued by the Company, was invoked and subsequently the said liability was settled by ZMCL at Rs. 29,000.00 lakhs. The Company and ZMCL mutually agreed to settle the entire outstanding amount of Rs 30,933.14 lakhs payable to ZMCL, comprising of corporate guarantee obligation of Rs 29,000.00 lakhs and other payable of Rs 1,933.14 lakhs, by way of transfer / assignment of identified Trademarks of the Company valued at Rs. 17,000.00 lakhs and payment of Rs. 1,200.00 lakhs, total aggregating to Rs. 18,200.00 lakhs. The said terms of settlement and draft settlement agreement were approved by the Board of Director in its meeting held on 12 November 2021 and 1 September 2022 respectively. The shareholders of the Company in its meeting held on 30 September 2022 had approved the said terms of settlement. Basis the requisite approvals in place, Settlement Agreement was executed on 31 March 2023 and accordingly, the Company had made payment of Rs 1,200.00 lakhs and written back the balance liability of Rs 12,733.14 lakhs during the year ended 31 March 2023 which was disclosed as an exceptional item (refer note 25).
Subsequently, the Companies executed addendums/documents with respect to the settlement agreement, affirming that ZMCL will have exclusive rights over the Identified Trademarks and the Company shall take all steps to transfer the clear title pertaining to the Identified Trademarks to ZMCL in a phased manner. Basis the execution of aforementioned documents, the Company has recognised sale of Identified Trademarks of Rs. 17,000.00 lakhs as an exceptional item during the year ended 31 March 2024 (refer note 25). Based on the addendum, invoice was raised for Rs 1,700.00 lakhs during the year and balance Rs 15,300.00 lakhs is shown as unbilled receivable under note 10.
44 Additional regulatory requirement-
(i) No loans or advances in the nature of loans are granted to promoters, directors, KMP's and the other related parties which is repayable on demand or without specifying any terms or period of repayment.
(ii) During the year, the Company has not entered into any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 except the followings.
(iv) The Company does not own an immovable property as property, plant and equipment and investment property.
(v) No proceedings have been initiated or pending against Company for holding any benami property under the Benami Transactions Act,1988 (45 of 1988) and rules made thereunder.
(vi) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender.
(vii) The Company is in compliance with the provisions of clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 as the Company does not have any subsidiary, associate or joint venture.
(viii) During the year no scheme of arrangement has been formulated by the Company/pending with competent authority.
(ix) A) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (""Intermediaries"") with the understanding, (whether recorded in writing or otherwise), that the intermediary shall, (1) directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or (2) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
B) No funds have been received by the Company in any manner whatsoever from any persons or entities including foreign entities (Funding Party) with the understanding (whether recorded or writing or otherwise) that the Company shall (1) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (2) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(x) There are no transactions related to the previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
(xi) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(xii) The Company does not have any charge or modification or satisfaction which is yet to be registered with the Registrar of the Companies beyond the statutory period.
45 The Company in preceding years had given advances/deposits of Rs.7,222.50 lakhs to certain parties for supply of goods and services and due to non supply of goods and services on time recovery proceeding were initiated and these advance/deposits of Rs. 7,222.50 lakhs along with interest receivable thereon of Rs. 1,534.75 lakhs were considered doubtful of recovery and were fully provided for as exceptional items. No further interest is provided on the advances/deposits recoverable. During the previous year Rs. 4,543.00 lakhs have been received against advances/deposit and accordingly provision of Rs 4,543.00 lakhs made earlier has been written back as exceptional items under note 28(f).
46 Previous year's figures have been regrouped, rearranged, realigned or reclassified during the year to make them comparable with the current year.
As per our attached report of even date
For MGB and Co. LLP For and on behalf of the Board
Chartered Accountants
Firm Registration Number.: 101169W/W-100035
Lalit Kumar Jain Shilpi Asthana Ronak Jatwala Sushant Mohan
Partner Director Director Chief Executive Officer
Membership No. 072664 DIN: 08465502 DIN: 08812389
Jyoti Upadhyay
Place: Noida Company Secretary
Date : 30 May 2024 M. No.: A37410
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