Forming Part of the Consolidated Financial Statements
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| NOTES | FINANCIAL HIGHLIGHTS OF SUBSIDIARIES | NOTES forming part of the Consolidated Financial Statements 1 CORPORATE INFORMATION in case of four subsidiaries wherein the liability on account of Zee Entertainment Enterprises Limited (hereinafter referred to as retirement benefits is provided on estimated basis as per local `the parent company’, `the Company’ or `ZEEL’) together with its laws instead of actuarial basis. This liability represents 27.63 % subsidiaries, jointly controlled entity and associate (collectively known (28.36%) of total gratuity and leave benefits of the Group as at as “the Group”) derives revenue mainly from advertisements and the year end. subscription. The Group also derives revenue from space-selling and iii. The consolidation of financial statements of the parent company distribution for other satellite television channels and sale of television and its subsidiaries is done to the extent possible on a line- content, film distribution etc. by-line basis by adding together like items of assets, liabilities, 2 BASIS OF CONSOLIDATION income and expenses. All significant intra-group transactions, i. The Consolidated Financial Statements (CFS) of the Group unrealised inter-company profits and balances have been are prepared under Historical Cost Convention on going eliminated in the process of consolidation. Minority interest in concern basis in accordance with Generally Accepted subsidiaries represents the minority shareholders proportionate Accounting Principles in India and Accounting Standard - 21 share of the net assets and net income. on “Consolidated Financial Statements” issued by the Institute iv. The CFS includes the Financial Statements of the parent of Chartered Accountants of India (ICAI), to the extent possible company and the subsidiaries (as listed in the table below). in the same manner as that adopted by the parent company Subsidiaries are consolidated from the date on which effective for its separate financial statements by regrouping, recasting or control is acquired and are excluded from the date of transfer / rearranging figures, wherever considered necessary. disposal. ii. The CFS are prepared using uniform accounting policies for transactions and other events in similar transactions except Name of the Subsidiaries Proportion of Interest (including beneficial Country of Incorporation interest) / Voting Power (either directly / indirectly or through Subsidiaries) Direct Subsidiaries Asia Today Limited 100(100) Mauritius India Webportal Private Limited 51(51) India Essel Vision Productions Limited (formerly ITM Digital Private Limited) 100(100) India Taj Television (India) Private Limited 100(100) India Zee Sports Limited 100(100) India Zee Turner Limited 74(74) India Zee Multimedia Worldwide (Mauritius) Limited 100(100) Mauritius Indirect Subsidiaries Apac Media Ventures Limited * 100(100) Hongkong Asia TV Limited 100(100) United Kingdom Expand Fast Holdings (Singapore) Pte Limited 100(100) Singapore OOO Zee CIS Holding LLC 100(100) Russia OOO Zee CIS LLC 100(100) Russia Taj TV Limited 100(100) Mauritius Zee Multimedia (Maurice) Limited 100(100) Mauritius Zee Technologies (Guangzhou) Limited 100(100) China Zee Telefilms Middle East FZ-LLC 100(100) U.A.E. Zee TV South Africa (Proprietary) Limited 100(100) South Africa Zee TV USA Inc. 100(100) United States of America * Applied for deregistration. 118 ANNUAL REPORT 2012-13 CORPORATE OVERVIEW OPERATIONAL OVERVIEW BOARD & MANAGEMENT REPORTS FINANCIAL STATEMENTS NOTES forming part of the Consolidated Financial Statements v. Associate The Group has adopted and accounted for Investment in Associate, using the “Equity Method” as per AS - 23 - Accounting for Investments in Associates in Consolidated Financial Statements issued by ICAI. Name of the Associate Extent of Holding Country of Incorporation Aplab Limited 26.42% (26.42%) India No adjustments are made for differences in accounting policy for depreciation provided on tangible fixed assets on written down value method. vi. Jointly controlled entity Interest in Jointly controlled entity “Media Pro Enterprise India Private Limited” (MPEIPL) is accounted for using Proportionate Consolidation Method whereby its share of each income, expenses, assets and liabilities is reported as separate line item in consolidated financial statements. Shareholding in MPEIPL is through a subsidiary, Zee Turner Limited. Name of the Jointly controlled entity Extent of Holding Country of Incorporation Media Pro Enterprise India Private Limited 50.00% (50.00%) India 2.1 Significant Accounting Policies (b) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready a. Use of estimates for their intended use at the reporting date. The preparation of financial statements requires the management to make estimates and assumptions that affect the reported (iii) Intangible assets amount of assets and liabilities, on the date of the financial Intangible assets acquired are measured on initial statements and the reported amount of revenue and expenses recognition at cost and stated at cost less accumulated for the year. Difference between the actual results and estimates amortisation and impairment loss, if any. are recognised in the period in which the results are known / materialised. d. Borrowing costs Borrowing costs directly attributable to the acquisition, b. Comparatives construction or production of an asset that necessarily takes Previous years figures have been regrouped, rearranged a substantial period of time to get ready for its intended use or or recasted wherever necessary to conform to this year’s sale are capitalised as part of the cost of respective asset. All classification. Figures in brackets pertain to previous year. The other borrowing costs are expensed in the year they occur. CFS is not comparable, in view of subsidiaries / jointly controlled entity incorporated / acquired during the previous year as e. Impairment of tangible and intangible assets referred in Note 2.2 below. At each Balance Sheet date, the Group reviews the carrying amount of assets to determine whether there is an indication c. Fixed Assets that those assets have suffered impairment loss. If any such (i) Goodwill on Consolidation indication exists, the recoverable amount of assets is estimated Goodwill represents the difference between the Group’s in order to determine the extent of impairment loss. The share in the net worth of the subsidiary / associate / jointly recoverable amount is higher of the net selling price and value in controlled entity and the cost of acquisition at the date use, determined by discounting the estimated future cash flows on which the investment in the subsidiary / associate / expected from the continuing use of the asset to their present jointly controlled entity is made / acquired. Capital reserve value. represents negative goodwill arising on consolidation. f. Depreciation / Amortisation on tangible / intangible assets (ii) Tangible fixed assets (i) Depreciation on tangible fixed assets including leased assets is provided on straight line method at the rates (a) Tangible fixed assets are stated at cost, less specified in Schedule XIV to the Companies Act, 1956 accumulated depreciation and impairment loss, if or at the rates adopted in the accounts of respective any. The cost comprises purchase price, borrowing subsidiaries as permissible under applicable local laws on cost if capitalisation criteria are met and directly straight line basis from the time they are available for use, attributable cost of bringing the asset to its working so as to write off their costs over the estimated useful life condition for the intended use. Integrated Receiver of the assets. Depreciation on Aircraft is provided based on Decoders (IRD) boxes are capitalised, when available for deployment. ZEE ENTERTAINMENT ENTERPRISES LIMITED 119 | NOTES | FINANCIAL HIGHLIGHTS OF SUBSIDIARIES | NOTES forming part of the Consolidated Financial Statements estimated useful life of 15 years. The rate of depreciation (ii) Film produced and / or acquired for distribution: so derived is more than the rate prescribed under Schedule Cost is allocated to each right based on management XIV. estimate of revenue. Costs of theatrical rights, satellite (ii) Premium on leasehold land and leasehold improvements rights, music rights, home video rights etc are amortised are amortised over the period of lease. when sold / exploited and residual rights are carried at lower of unamortised cost or net realisable value. (iii) No part of goodwill arising on consolidation is amortised. (a) Theatrical rights: 70% of allocated cost is amortised (iv) Intangible assets are amortised on a straight line basis over over three months of theatrical release of films and the economic useful life as estimated by the management. balance 30% in subsequent three quarters. g. Investments (b) Satellite rights, music rights, home video rights etc: (i) Investments, which are readily realisable and intended Allocated cost of each right are expensed on sale and to be held for not more than one year from the date on amortised on exploitation as per (i)(c) above. which such investments are made, are classified as current investments. All other investments including investment (c) Negative rights: 90% of the cost is allocated and property are classified as long-term investments. amortised as per (ii)(a) and (ii)(b) above and 10% of the cost is allocated to Intellectual Property Rights (ii) Current investments are stated at lower