Broadcast Network
Annual Report 2015-16 Padma Vibhushan Shri Dhirubhai H. Ambani (28th December, 1932 - 6th July, 2002) Reliance Group - Founder and Visionary Profile
Reliance Broadcast Network Limited (RBNL) is a multi-media entertainment conglomerate with play across radio and television. It is part of the Reliance Group and specializes in creating and executing integrated media solutions for brands. Its business verticals are as follows:
92.7 BIG FM – India’s leading FM Radio Network with channel licenses for 59 stations, currently reaching over 43.2 million listeners per week.
BIG MAGIC, our light hearted entertainment channel, offers a lineup of hilarious sitcoms, side splitting historical comedies, mythological shows, weekend & festive specials, animation content and comedy blockbuster films.
BIG GANGA is a regional entertainment channel built on local insights and created especially for audiences from Bihar and Jharkhand region of India. It is positioned as a general entertainment channel specially designed for the Hindi Heartland featuring an array of exciting content spanning devotional programmes, mythology, pilgrimage, reality shows and weekend Bhojpuri blockbuster movies. Reliance Broadcast Network Limited
Board of Directors Contents Page No. Shri Anil Sekhri – (DIN: 00506790) Shri Darius Kakalia – (DIN: 00029159) Notice of Annual General Meeting 5 Ms. Shubhdarshini Ghosh – (DIN: 07191985) (appointed with effect from August 28, 2015) Directors’ Report 8 Shri Pradeep Shah – (ceased with effect from May 10, 2016)
Independent Auditors’ Report on the 23 Financial Statement
Balance Sheet 28
Company Secretary Statement of Profit and Loss 29 Ms. Shikha Kapadia – (ACS No.: 20733)
Cash Flow Statement 30 Auditors M/s. Chaturvedi & Shah Notes to the Financial Statement 31
Registered Office Independent Auditors’ Report on the Consolidated 52 th 401, 4 Floor, INFINITI Financial Statement Link Road, Oshiwara, Andheri West Mumbai 400 053 CIN: U64200MH2005PLC158355 Tel. : +91 22 30689444 Consolidated Balance Sheet 56 Fax : +91 22 39888927 Email: [email protected] Website: www.reliancebroadcast.com Consolidated Statement of Profit and Loss 57
Registrar and Transfer Agent Consolidated Cash Flow Statement 58 Karvy Computershare Private Limited Karvy Selenium Tower - B Plot No. 31 & 32, Survey No. 116/22, 115/24, 115/25 Financial District, Nanakramguda, Notes to the Consolidated Financial Statement 59 Hyderabad 500 032 Website: www.karvy.com Statement containing salient features of the 84 Investor Helpdesk financial statement of subsidiaries/associate companies/joint ventures Toll free no. (India) : 1800 4250 999 Tel. : +91 40 6716 1500 Fax : +91 40 6716 1791 Attendance Slip and Proxy Form 87 E-mail : [email protected]
12th Annual General Meeting on Thursday, September 29, 2016 at 10:00 A.M. at Auditorium, Reliance Energy Management Institute, 19 Aarey Colony, Jogeshwari Vikhroli Link Road, Opp. SEEPZ, Mumbai 400 065
This Annual Report can be accessed at www.reliancebroadcast.com Reliance Broadcast Network Limited
Notice
Notice is hereby given that the 12th Annual General Meeting (SEBI) (Issue and Listing of Debt Securities) Regulations, of the Members of Reliance Broadcast Network Limited will 2008, as amended, and other applicable SEBI regulations be held on Thursday, September 29, 2016 at 10:00 A.M., at and guidelines, and subject to such other applicable laws, Auditorium, Reliance Energy Management Institute, 19 Aarey rules and regulations and guidelines, approval of the Colony, Jogeshwari Vikhroli Link Road, Opp. SEEPZ, Mumbai Members of the Company be and is hereby accorded to the 400 065, to transact the following business: Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include any Ordinary Business: committee which the Board may constitute to exercise its 1. To consider and adopt: powers, including the powers conferred by this Resolution) a) the audited financial statement of the Company for the for making offer(s) or invitation(s) to subscribe to Secured financial year ended March 31, 2016 and the reports / Unsecured / Redeemable Non-Convertible Debentures of the Board of Directors and Auditors thereon, and (NCDs) including but not limited to subordinated Debentures, bond, and/or other debt securities, etc., on a b) the audited consolidated financial statement of the private placement basis, in one or more tranches, within Company for the financial year ended March 31, 2016 the overall borrowing limits of the Company, as may be and the report of the Auditors thereon. approved by the Members from time to time. 2. To appoint a Director in place of Ms. Shubhdarshini Ghosh RESOLVED FURTHER THAT for the purpose of giving effect (DIN: 07191985), who retires by rotation under the to this resolution, the Board/Committee be and is hereby provisions of the Companies Act, 2013 and being eligible, authorised to determine the terms of issue including the offers herself for re-appointment. class of investors to whom NCDs are to be issued, time of 3. To appoint Auditors and to fix their remuneration and in this issue, securities to be offered, the number of NCDs, tranches, regard, to consider and, if thought fit, to pass the following issue price, tenor, interest rate, premium/discount, listing resolution as an Ordinary Resolution: and to do all such acts and things and deal with all such “RESOLVED THAT M/s. Chaturvedi & Shah, Chartered matters and take all such steps as may be necessary and Accountants (Firm Registration No. 101720W), be and are to sign and execute any deeds/documents/undertakings/ hereby appointed as the Auditors of the Company, to hold agreements/papers/writings, as may be required in this office from the conclusion of this Annual General Meeting regard.” until the conclusion of the next Annual General Meeting of the Company, on such remuneration as shall be fixed by the Board of Directors.” By Order of the Board of Directors Special Business: 4. Private Placement of Non-Convertible Debentures and/ or other Debt Securities Shikha Kapadia Company Secretary To consider and, if thought fit, to pass the following resolution as a Special Resolution: Registered Office: “RESOLVED THAT pursuant to the provisions of Sections 401, 4th Floor, INFINITI 42, 71 and all other applicable provisions, if any, of the Link Road, Oshiwara Companies Act, 2013 (the “Act”) read with the Rules Andheri West, Mumbai 400 053 made thereunder (including any statutory modification(s) or CIN: U64200MH2005PLC158355 re-enactment(s) thereof, for the time being in force) and the Website: www.reliancebroadcast.com provisions of the Memorandum and Articles of Association of the Company, the Securities and Exchange Board of India August 24, 2016
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Notice
Notes: a. the change in the residential status on return to India for permanent settlement; and 1. Statement pursuant to Section 102 (1) of the Companies Act, 2013, relating to the special business to be transacted b. the particulars of the bank account(s) maintained at the Annual General Meeting (the “Meeting”) is annexed in India with complete name, branch, account type, hereto. account number and address of the bank, if not furnished earlier. 2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote on a poll, 12. Re-appointment of Director: instead of herself / himself and the proxy need not be a At the ensuing Meeting, Ms. Shubhdarshini Ghosh, Director member of the Company. The instrument appointing the of the Company who was first appointed as a Director of the Proxy in order to be effective, should be deposited at the Company on August 28, 2015 and who retires by rotation Registered Office of the Company, duly completed and under the provisions of the Companies Act, 2013 and being signed, not less than 48 hours before commencement of eligible, offers herself for re-appointment. the Meeting. A Proxy form is sent herewith. 13. Members are requested to fill in and submit online the 3. A person can act as proxy on behalf of members not Feedback Form provided in the ‘Contact Us’ section on exceeding fifty and holding in the aggregate not more than the Company’s website www.reliancebroadcast.com to aid ten per cent of the total share capital of the Company the Company in its constant endeavour to enhance the carrying voting rights. However, a member holding more standards of service to investors. than ten per cent of the total share capital of the Company carrying voting rights may appoint a single person as 14. The Securities and Exchange Board of India (SEBI) has proxy and such person shall not act as proxy for any other mandated the submission of Permanent Account Number shareholder. (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested 4. Corporate members intending to send their authorised to submit their PAN to their Depository Participants with representative(s) to attend the Meeting are requested to whom they are maintaining their demat accounts. Members send to the Company a certified true copy of their board holding shares in physical form can submit their PAN details resolution authorising their representatives to attend and to the Company / Registrar and Transfer Agent. vote on their behalf at the Meeting. 15. Members can avail the facility of nomination in respect 5. Members / Proxies are requested to bring their duly filled of shares held by them in physical form pursuant to the attendance slip sent herewith along with their copy of the provisions of Section 72 of the Companies Act, 2013. annual report to the Meeting. Members desiring to avail this facility may send their 6. In case of joint holders attending the meeting, only such nomination in the prescribed Form SH-13 duly filled in joint holder who is higher in the order of names will be to Karvy Computershare Private Limited, Karvy Selenium, entitled to vote. Tower – B, Plot No. 31 & 32, Survey No. 116/22, 115/24, 115/25, Financial District, Nanakramguda, Hyderabad 7. Members who hold shares in electronic form are requested - 500 032, or call on Toll free no. 1800 4250 999; to write their DP ID and Client ID numbers and those who Tel.: +91 40 6716 1500; Fax: +91 40 6716 1791/ E-mail: hold shares in physical form are requested to write their Folio [email protected]. The prescribed form in this regard may number in the attendance slip for attending the Meeting to also be obtained from Karvy Computershare Private Limited facilitate identification of membership at the Meeting. at the address mentioned above. Members holding shares 8. Relevant documents referred to in the accompanying Notice in electronic form are requested to contact their Depository are open for inspection by the members at the Registered Participant directly for recording their nomination. Office of the Company on all working days, except Saturdays 16. Members who hold shares in physical form, in multiple folios, between 11:00 A.M. and 1:00 P.M up to the date of the in identical names or joint holding in the same order of names Meeting. are requested to send the share certificates to the Registrar 9. Members are requested to intimate immediately any and Transfer Agent for consolidation into a single folio. change in their address or bank mandates to their Depository 17. Members who have not registered their E-mail addresses so Participants with whom they are maintaining their demat far are requested to register their E-mail address so that they accounts. The Company or its Registrar and Transfer Agent can receive the Annual Report and other communications cannot change bank particulars or bank mandates for shares from the Company electronically. held in electronic form. 18. In compliance with the provisions of Section 108 of the 10. Members holding shares in physical form are requested Companies Act, 2013 read with Rules made thereunder, the to advise any change of address and bank mandates Company is offering e-voting facility to all Members of the immediately to the Company / Registrar and Transfer Agent, Company through Notice dated August 24, 2016 (remote Karvy Computershare Private Limited e-voting). A person, whose name is recorded in the register 11. Non-Resident Indian members are requested to inform of members or in the register of beneficial owner (in case Karvy Computershare Private Limited immediately on: of electronic shareholding) maintained by the depositories as on the cut-off date i.e. September 22, 2016 only
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Notice
shall be entitled to avail the facility of remote e-voting / M/s. Dayal & Lohia, Chartered Accountants as the voting. Karvy Computershare Private Limited, our Registrar Scrutiniser to scrutinise the voting process in a fair and and Transfer Agent will be facilitating remote e-voting transparent manner. The Scrutiniser will submit his report to enable the Members to cast their votes electronically. to the Chairman after completion of the scrutiny and the The Members can cast their vote online from 10:00 A.M. results of voting will be announced after the Meeting of the on September 26, 2016 to 5:00 P.M. on September 28, Company. Subject to receipt of requisite number of votes, 2016. The Members shall refer to the detailed procedure the resolutions shall be deemed to be passed on the date on remote e-voting given in the e-voting instruction slip. of the Meeting. The result of the voting will be posted on the website of the Company at www.reliancebroadcast.com The facility for voting shall also be available at the meeting. and posted on the website of Karvy Computershare Private The members who have cast their votes by remote e-voting Limited. prior to the meeting may also attend the meeting, but shall not be entitled to cast their votes again at the meeting. 19. The route map showing directions to reach the venue of the Meeting is annexed. The Board of Directors have appointed Shri Anil Lohia, Partner or in his absense Shri Rinkit Kiran Uchat, Partner,
Statement pursuant to Section 102 (1) of the Companies Act, 2013, to the accompanying Notice dated August 24, 2016.
Item No. 4: Private Placement of Non-Convertible Debentures of the Resolution. Accordingly, the approval of the Members is and/or other Debt Securities. being sought by way of a Special Resolution under Section 42 and other applicable provisions, if any, of the Act and its rules As per the provisions of Section 42 of the Companies Act, thereunder as set out in Item No. 4 appended to this Notice. 2013 (the “Act”) and its Rules thereunder, a Company offering or making an invitation to subscribe to redeemable secured/ None of the Directors, Key Managerial Personnel and their unsecured non-convertible debentures (NCD’s) on a private relatives is concerned or interested, financially or otherwise, in placement basis is required to obtain the prior approval of the this resolution. Members by way of a Special Resolution. Such approval by a Special Resolution can be obtained once a year for all the offers The Board accordingly recommends the Special Resolution set and invitations for such NCD’s to be made during the year. out at Item No. 4 of the accompanying Notice for the approval of the Members. NCD’s including subordinated debentures, bonds and/or other debt securities, etc. issued on a private placement basis constitute By Order of the Board of Directors a significant source of borrowings for the Company. It is proposed to offer or invite subscriptions for NCD’s including Shikha Kapadia subordinated debentures, bonds, and/or other debt securities, Company Secretary etc,. on private placement basis, in one or more tranches, within the overall borrowing limits of the Company, as may be approved Registered Office: by the Members from time to time, with authority to the Board 401, 4th Floor, INFINITI to determine the terms and conditions, including the issue price Link Road, Oshiwara of the NCD’s, interest, repayment, security or otherwise, as it may deem expedient and to do all such acts, deeds, matters Andheri West, Mumbai 400 053 and things in connection therewith and incidental thereto as CIN: U64200MH2005PLC158355 the Board in its absolute discretion deems fit, without being Website: www.reliancebroadcast.com required to seek any further consent or approval of the Members or otherwise to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority August 24, 2016
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Directors’ Report
Dear Shareowners, Your Directors have pleasure in presenting the 12th Annual Report and the audited financial statement for the financial year ended March 31, 2016. Financial Results The standalone performance of the Company for the financial year ended March 31, 2016 is summarised below:
Particulars Financial Year ended *Financial Year ended March 31, 2016 March 31, 2015 (` in Lakhs) (` in Lakhs) Total income 43,328.39 35,668.99 Gross profit/(loss) before depreciation, amortisation and exceptional items 7,249.98 9,558.17 Less: a. Depreciation and amortisation 2,790.23 3,167.23 b. Exceptional items and other adjustments - 1,336.26 Profit/(Loss)before tax 4,459.75 5,054.68 Less: Provision for: Current tax/Excess provision for Tax of earlier years - - Profit/(Loss) after tax 4,459.75 5,054.68 Add : Balance brought forward from previous year (38,837.10) (38,764.53) Profit/(Loss) available for appropriation (33,709.85) Effect of changes in depreciation as per Companies Act, 2013 - (127.25) Appropriations: Proposed Dividend on equity shares - - Dividend Tax - - Transfer (from) /to General Reserve - - Transfer to Debenture Redemption Reserve 2,751.53 5,000.00 Balance carried to Balance Sheet (37,128.88) (38,837.10) *Figures of previous year have been regrouped and reclassified, wherever required Financial Performance certain that we will grow consistently and increase our revenue. The Company’s gross income for the financial year ended March We have acquired 5 new stations in Maharashtra / Goa (Pune, 31, 2016 increase to ` 43,328.39 lakhs from ` 35,668 lakhs Nagpur, Kolhapur, Aurangabad and Ahmednagar) in addition to in the previous year, increase of 21 per cent. The operating profit our current network of 3, making it a total of 8 stations.We have (PBDIT) of the Company increased by 34 per cent to ` 19,160 100% coverage and presence in UP, Bihar and Jharkhand, with 5 new (Lucknow, Patna, Varanasi, Gorakhpur and Muzaffarpur) lakhs during the year, from ` 14,232 lakhs, in the previous and 8 existing frequencies. We will have the largest presence year. The overall net profit of the Company for the year was in Northeast India and Jammu & Kashmir with new frequencies ` 4,559.75 lakhs primarily due to other income of in Agartala, Itanagar, Shillong and Aizwal, including our existing ` 8,840.50 lakhs. presence in Jammu, Srinagar and Guwahati. Dividend We launched a fresh look and identity across our television and radio business (BIG Magic, BIG Ganga and 92.7 BIG FM), During the year under review, the Board of Directors has not through a brand refreshment exercise, which was well received recommended any dividend on the equity shares of the Company. by consumers and stakeholders. Business Operations We have carved a niche in the area of content, programming The year 2015-16 has been a significant financial year in many and brand led campaigns by consistently delivering successful ways. We have consistently maintained a leadership position for properties this year. Our key shows and initiatives during this our radio business 92.7 BIG FM with top ratings, reaching out Financial Year were Suhaana Safar with Annu Kapoor, Yaadon to 43.2 million listeners with the highest reach among all radio ka Idiot Box with Neelesh Misra, Arth with Saurabh Raaj Jain, stations in Hindi-speaking markets and continue to remain the Nayak with Sanjeev Srivastava and integrated shows Fakebook largest radio network in India with 59 frequencies. We closed the with Kavita, Ji Sirji, Nautanki News and Chutki, Shopkeepaa aur last quarter of financial year 2015-16 with a cumulative total of Woh! which aired on 92.7 BIG FM and BIG Magic have been around 11,939 clients annually. recognized and awarded at credible industry events and forums. We acquired 14 new frequencies during the Phase III Radio We also created path-breaking on-ground initiatives championing Auctions in September 2015 across our focus markets and are various issues and causes across sectors related to the environment,
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Directors’ Report education, empowerment, talent and entertainment such as Pani Particulars of Loans, Guarantees or Investments Bachao Life Banao (Water conservation), 8th year of BIG Green Ganesha (Environment awareness), BIG Golden Voice (Radio Particulars of loans given, investment made, guarantees given reality singing talent hunt), BIG Disha (Education), See The and securities provided are provided in the standalone financial Radio (Aimed at inclusion and equal opportunity for the hearing statement (Please refer to Note no. 14, 19, 13 and 40 impaired), DaryaDilli (Collection drive to help protect the poor respectively to the standalone financial statement). and underprivileged from the harsh and cold winter). Subsidiaries, joint venture or associate companies We are the most awarded radio network winning multiple awards at credible festivals like New York Radio Festival, Golden Mikes The Company continues to be a subsidiary of Reliance Land and India Radio Forum. We won the Media Partner of the Year – Private Limited with effect from March 20, 2015. Radio award at the Emvies 2015. A report on the performance and financial position of each of the The Company hosted 6th BIG Star Entertainment Awards 2015, subsidiary company as per the Companies Act, 2013 (the “Act”) which was a huge success and garnered phenomenal ratings. is provided in the consolidated financial statement. The awards honoured the best entertainers of the year through 38 unique categories. Popular Bollywood celebrities like Salman Consolidated Financial Statement Khan, Alia Bhatt amongst others performed at the award ceremony. The Audited Consolidated Financial Statement for the financial year ended March 31, 2016 based on the financial statement For our TV business (BIG Ganga and BIG Magic), we strengthened received from subsidiary companies, as approved by their our distribution with India’s leading free to air digital Network - respective Board of Directors have been prepared in accordance DD Free Dish, gradually fortifying our position in the rural belt, with Accounting Standard (AS) - 21 on ‘Consolidated Financial making our content easily available for discerning viewers. Statements’, notified under the Act, read with the Accounting BIG Magic, our light hearted entertainment channel marked the Standards Rules as applicable. beginning of new prospects in terms of increased viewership, new audience base, robust expansion plan through its association Directors with DD Free Dish. We relaunched our most loved show ‘Har The Company has received declarations from all the Independent Mushkil Ka Hal Akbar Birbal’ on consumer demand as well as Directors of the Company confirming that they meet the criteria ‘Naya Mahisagar’ with well known production houses and popular of independence as prescribed under the Act. actors. We amplified our bouquet of fresh and innovative content by launching a new mythological offering titled ‘Baal Krishna’. In terms of the provisions of the Act, Ms. Shubhdarshini Ghosh (DIN: 07191985), Director of the Company retires by rotation BIG Ganga, enjoys strong viewership and is the No. 1 regional and being eligible, offers herself for re-appointment at the general entertainment channel (GEC) of Bihar and Jharkhand. ensuing Annual General Meeting (AGM). The Company has also It is the only channel on DD Direct that delivers more than received approval from Ministry of Information and Broadcasting 5 hours of original programming. The channel is based on the for her appointment as Director of the Company. positioning of being positive, uplifting and nurturing a sense of Shri Pradeep Shah, Independent Director of the Company ceased pride amongst the aspirational audience pool of the region. It to be Director with effect from May 10, 2016. The Board places taps into the insights of Religion (Devotion & Bhakti); Reality on record its deep appreciation for the valuable contribution (Game Shows, Social), Family Movies and Fiction. Popular shows made by him during his tenure as Director of the Company. like Bhakti Samrat, Rasoi Ki Rani, Hindustan Ka BIG Star, BIG Memsaab, BIG Bahuria amongst others resonated well with the Key Managerial Personnel local audience and offered family entertainment and meaningful During the year, there was no change in the Key Managerial content. One of our biggest devotional on-air and on-ground Personnel. events ‘Jai Chhathi Maai’ garnered 212 GVTs ( Impressions ‘000s) (Source: BARC; TG: CS 4+) Evaluation of Directors, Board and Committees
Deposits The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which The Company has neither accepted nor renewed any fixed includes criteria for performance evaluation. deposits during the year. There are no unclaimed deposits, Pursuant to the provisions of the Act, the Board has carried out unclaimed /unpaid interest, refunds due to the deposit holders an annual performance evaluation of its own performance, the or to be deposited to the Investor Education and Protection Fund directors individually as well as the evaluation of the working of the as on March 31, 2016. Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering Depository system criteria such as Board composition and structure, effectiveness of Board/Committee processes, and information provided to the Your Company’s equity shares are available for dematerialisation Board, etc. A separate meeting of the Independent Directors was through National Securities Depository Limited and Central also held during the year for the evaluation of the performance Depository Services (India) Limited. As on March 31, 2016, of non-independent director and performance of the Board as 99.97 per cent of the equity shares of your Company were held a whole. in demat form.
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Directors’ Report
The Nomination and Remuneration Committee has also reviewed Meetings of the Board the performance of the individual directors based on their During the year, seven Board Meetings were held on May 13, knowledge, level of preparation and effective participation in 2015; July 20, 2015; August 6, 2015; August 28, 2015; Meetings, understanding of their roles as directors etc. October 8, 2015, February 4, 2016 and February 26, 2016. Policy on appointment and remuneration for Directors, Key The attendance of Board Members during these meetings have Managerial Personnel and Senior Management Employees been provided below:
The Nomination and Remuneration Committee of the Board has Name of the Director Number of Board devised a policy for selection and appointment of Directors, Key meetings attended out Managerial Personnel and Senior Management Employees and of Seven meetings held their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of Shri Anil Sekhri 6 a Director. The policy on the above is attached as Annexure – A. Shri Darius Kakalia 6 Shri Pradeep Shah* 6 Directors’ Responsibility Statement Ms. Shubhdarshini Ghosh# 2 Pursuant to the requirements under Section 134(5) of the Act with respect to Directors’ Responsibility Statement, it is hereby *Ceased to be a director with effect from May 10, 2016 confirmed that: #Appointed as Director with effect from August 28, 2015 i. In the preparation of the annual financial statement for Committees of Directors the financial year ended March 31, 2016, the applicable The Company has constituted various committees of the Board, Accounting Standards had been followed along with proper namely, Audit Committee, Nomination and Remuneration explanation relating to material departures, if any; Committee, Stakeholders Relationship Committee and Corporate ii. The Directors had selected such accounting policies Social Responsibility Committee. and applied them consistently and made judgments and Composition of Board Level Committees:- estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as A) Audit Committee at March 31, 2016 and of the profit of the Company for the year ended on that date; The Audit Committee was reconstituted on August 10, 2016 and comprises of Shri Anil Sekhri (Independent Director) as iii. The Directors had taken proper and sufficient care for the Chairman, Shri Darius Kakalia (Independent Director) and maintenance of adequate accounting records in accordance Ms. Shubhdarshini Ghosh (Non-executive Director) as its with the provisions of the Act, for safeguarding the assets members. of the Company and for preventing and detecting fraud and other irregularities; The terms of reference of the Audit Committee are in accordance with the provisions of the Act, as amended from iv. The Directors had prepared the annual financial statements time to time. During the year, all recommendations made for the financial year ended March 31, 2016 on a ‘going by the Audit Committee were accepted by the Board. concern’ basis. The Audit Committee met two times during the financial v. The Directors had devised proper systems to ensure year i.e. August 28, 2015 and February 26, 2016, the compliance with the provisions of all applicable laws and details of the attendance of members during such meetings that such systems are adequate and operating effectively. are as follows: Contracts and Arrangements with Related Parties Name of the Member Number of meetings All contracts /arrangements/ transactions entered into/ by the attended Company during the financial year under review with related Shri Anil Sekhri 2 parties were on an arm’s length basis and in the ordinary course Shri Darius Kakalia 2 of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Shri Pradeep Shah* 1 Key Managerial Personnel or other designated persons, which may *Ceased to be a member with effect from May 10, 2016 have a potential conflict with the interest of the Company at large. B) Nomination and Remuneration Committee None of the Directors has any pecuniary relationship or transactions vis-a vis the Company. The Nomination and Remuneration Committee was reconstituted on August 10, 2016 and comprises of Shri The details of related party transactions are disclosed in Notes Anil Sekhri (Independent Director) as Chairman, Shri Darius to Accounts. Kakalia (Independent Director) and Ms.Shubhdarshini Ghosh Material Changes and Commitments, if any, affecting the (Non-executive Director) as its members. financial position of the Company The terms of reference of Nomination and Remuneration There was no material changes and commitments affecting the Committee are in accordance with the provisions of the Act, financial position of the Company. as amended from time to time.
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The Nomination and Remuneration Committee met two Auditors and Auditors’ Report times during the financial year i.e. August 28, 2015 and M/s. Chaturvedi & Shah, Chartered Accountants, the Auditors February 26, 2016, the details of the attendance of of the Company, hold office until the conclusion of the ensuing members during such meetings are as follows: AGM and are eligible for re-appointment. Name of the Member Number of meetings The Company has received letter from M/s. Chaturvedi & Shah, attended Chartered Accountants, to the effect that their appointment, Shri Anil Sekhri 2 if made, would be within the prescribed limits under Section 141(3) of the Act and that they are not disqualified from Shri Darius Kakalia 2 appointment as Statutory Auditors of the Company. Shri Pradeep Shah* 1 Your Directors have therefore proposed to appoint *Ceased to be a member with effect from May 10, 2016 M/s. Chaturvedi & Shah, Chartered Accountants, as Statutory Auditors of the Company, subject to the approval of the members C) Stakeholders Relationship Committee at the ensuing AGM. The Stakeholders Relationship Committee was reconstituted The observations and comments given by Auditors in their on August 10, 2016 and comprises of Shri Anil Sekhri report read together with notes on financial statements are self (Independent Director) as Chairman, Shri Darius Kakalia explanatory and hence do not call for any further comments (Independent Director) and Ms.Shubhdarshini Ghosh (Non- under Section 134 of the Act. executive Director) as its members. Secretarial Audit The terms of reference of Stakeholders Relationship Committee are in accordance with the provisions of the Act, Pursuant to the provisions of Section 204 of the Act and the as amended from time to time. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed The Stakeholders Relationship Committee met on August M/s. Aashish K. Bhatt & Associates, Practicing Company 28, 2015 during the financial year, the details of the Secretaries, to undertake the Secretarial Audit of the Company. attendance of members during such meeting is as follows: There is no qualification, reservation or adverse remark made in the Secretarial Audit Report. The Audit Report of the Secretarial Name of the Member Attendance of Member Auditor is attached as Annexure – B. Shri Anil Sekhri 1 Extract of Annual Return Shri Darius Kakalia 1 Extract of the Annual Return of the Company in form MGT - 9 is Shri Pradeep Shah* 0 attached as Annexure - C. *Ceased to be a member with effect from May 10, 2016 Conservation of Energy, Technology Absorption and Foreign D) Corporate Social Responsibility Committee Exchange Earnings and Outgo The Corporate Social Responsibility Committee was As the Company is a multi-media entertainment Company and constituted on February 4, 2016 and comprises of does not involve in any manufacturing activity, most of the Shri Anil Sekhri (Independent Director) as Chairman, information as required under Section 134(3)(m) of the Act Shri Darius Kakalia (Independent Director) and read with Rule 8 of the Companies (Accounts) Rules, 2014 are Ms. Shubhdarshini Ghosh (Non-executive Director) as its not applicable. However, the information as applicable has been members. given in the Annexure - D forming part of this Report. The terms of reference of Corporate Social Responsibility Vigil mechanism Committee are in accordance with the provisions of the Act, Pursuant to Section 177 (9) of the Act and Rule 7 of the as amended from time to time. Companies (Meeting of Board and its Powers) Rules, 2014, the The Corporate Social Responsibility Committee met on Company has a vigil mechanism policy named Whistle Blower February 26, 2016 during the financial year, the details Policy. of the attendance of members during such meeting is as It is affirmed that no personnel has been denied access to the follows: Audit Committee.
Name of the Member Attendance of Member Risk Management Policy Shri Anil Sekhri 1 Your Company has identified the need to build a robust risk management framework across its businesses verticals, which Shri Darius Kakalia 1 will primarily enable the management to incorporate leading Ms. Shubhdarshini Ghosh 0 practices and process level controls around operations. The Board reviews periodically the risk assessment and minimization procedures in the areas of business.
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Directors’ Report
Your Company is in the process of formulating an Integrated Risk Internal Financial Controls and their adequacy Management Policy covering all risk. The Company has in place adequate internal financial controls Compliance with provisions of Sexual Harassment of Women across the organisation. The same is subject to periodic review. at Workplace (Prevention, Prohibition and Redressal) Act, During the year, such controls were tested and no reportable 2013 material weakness in the design or operation were observed. The Company is committed to uphold and maintain the dignity Acknowledgement of woman employees and it has in place a policy which provides Your Directors would like to express their sincere appreciation for protection against sexual harassment of women at work place for the co-operation and assistance received from shareholders, and for prevention and redressal of such complaints. During the debenture holders, debenture trustees, bankers, financial year no such complaints were received. institutions, regulatory bodies and other business constituents Corporate Social Responsibility during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment The Company has constituted Corporate Social Responsibility displayed by all executives, officers and staff, resulting in the Committee in compliance with the provisions of Section 135 of successful performance of the Company during the year. the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (‘CSR Policy’) indicating the activities (‘CSR Activity’) to be undertaken by the Company. The CSR Policy may be accessed on For and on behalf of the Board of Directors the Company’s website at the link: http://www.reliancebroadcast. com/corporate_sr/corporate_sr.html The annual report on CSR activites is annexed as Annexure - E. Anil Sekhri Shubhdarshini Ghosh Order, if any, passed by Regulator or Courts or Tribunals Director Director No orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Company’s Mumbai operations. August 24, 2016
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Directors’ Report
Annexure – A Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees 1. Introduction 1.1 Reliance Broadcast Network Limited considers human resources as invaluable assets of the Company. The policy aims to harmonise the aspirations of the directors/ employees with the goals of the Company. 1.2 Human capital is a strategic source of value creation and an important asset of our Company. As part of progressive HR Philosophy, it is necessary to have in place a comprehensive Compensation Policy, which is in line with the industry trend and is employee friendly. 2. Objectives 2.1 Ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate human resources and to run the Company successfully. 2.2 Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks. 2.3 Ensure that annual compensation review considers industry/ business outlook and strategies adopted by industry peers, differentiates employees based on their merits and also protects employees, particularly those in junior cadre, against inflationary pressures; 2.4 Retention of high performers at all levels and those playing critical roles. 3. Scope and Exclusion The Board has constituted the “Nomination and Remuneration Committee” in line with the requirements under the provisions of the Companies Act, 2013. This Policy sets out the broad guiding principles for the Committee for recommending to the Board for the appointment and remuneration of the directors, key managerial personnel, senior managerial personnel of the Company. 4. Definitions 4.1 “Director” means a director appointed to the Board of the Company. 4.2 “Key Managerial Personnel” means (i) the Chief Executive Officer or the managing director or the Manager; (ii) the Company Secretary; (iii) the Whole-time Director; (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed under the Companies Act, 2013. 4.3 ‘‘Senior Management’’ means personnel of the Company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, if any. 5. Policy 5.1. Appointment of Directors/ Key Managerial / Senior Management personnel The Nomination and Remuneration Committee, inter alia, considers qualifications, positive attributes, areas of expertise, number of directorships and memberships held in various committees of other companies by such persons for selection. The Board considers the recommendation of the Nomination and Remuneration Committee and takes appropriate decision. The Company also considers the requirement of skills and effectiveness of persons contributing to the Company’s business and policy decisions of the Company. 5.2. Remuneration to Directors/ Key Managerial Personnel 5.2.1The remuneration of the Directors/ Managing Directors/ Whole-Time Directors and Managers etc. will be governed as per provisions contained in the Companies Act, 2013 and rules made therein from time to time. 5.2.2Non-Executive Directors shall be entitled to sitting fees for attending the meetings of the Board and the Committees thereof as approved by the Board of Directors from time to time. The Non-Executive Directors shall also be entitled to profit related Commission, if approved by the Board, in addition to the sitting fees. 5.2.3The Board, on the recommendation of the Nomination and Remuneration Committee, shall review and approve the remuneration payable to the Directors / Key Managerial Personnel/ Senior Management Personnel of the Company within the overall limits, if any, approved by the shareholders. 5.2.4The remuneration structure shall include the following components: (i) Basic Pay (ii) Perquisites and Allowances (iii) Stock Options, if any. (iv) Commission (Applicable in case of Executive Directors/ Directors) (v) Retiral Benefits (vi) Performance Linked Incentives 5.2.5The Annual Plan, Objectives, financial results of the Company shall be reviewed by the Nomination and Remuneration Committee and Annual Performance Incentives, increment, revision in remuneration etc. will be proposed based on the achievements. 5.3 Remuneration to other employees Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile, skill sets, seniority, experience, performance and prevailing remuneration levels for equivalent jobs. 6. Retention Features as part of Compensation Package Based on the organizational need for retaining performing employees and those in critical roles, certain retention features may be rolled out as part of the overall compensation package. These may take form of Retention Bonuses (RBs); Special Monetary Programs (SMPs), Long-term Incentives (LTIs), Employee Stock Options etc. 7. Modification and Amendment The policy is subject to modification, amendment and alterations by the management at any time without assigning any reasons. 13 Reliance Broadcast Network Limited
Directors’ Report
Annexure - B Form No. MR-3 Secretarial Audit Report For the financial year ended March 31, 2016 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Reliance Broadcast Network Limited 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai – 400 053 I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Reliance Broadcast Network Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon. Based on the verification of Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2016 complied with the statutory provisions listed hereunder and also that the Company has followed proper Board - processes and have required compliance – mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2016, according to the provisions of:: (i) The Companies Act, 2013 (the ‘Act’) and the Rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and bye-laws framed thereunder; (iv) The Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder for compliance in respect of Overseas Direct Investment. However Foreign Direct Investment and External Commercial Borrowings are not applicable; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) are not applicable:- a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 till May 14, 2015 and thereafter The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client; g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; I have also examined compliance with applicable clauses of the following: (i) Secretarial Standards issued by the Institute of the Company Secretaries of India – w.e.f 1st July, 2015 for General Meetings, Board and Committees Meetings (i.e. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee); and (ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Listing Agreements, if any, entered into by the Company with BSE Limited and National Stock Exchange of India Limited – Not Applicable. During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines mentioned above.
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Directors’ Report
I further report that The Board of Directors of the Company is duly constituted with proper balance of Non – Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the year under review were carried out in compliance with the provisions of the Act. Adequate notice, agenda and detailed notes were given to all Directors to schedule the Board Meetings and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. The decisions at Board Meetings and Committee Meetings are carried out and recorded in the minutes of the Board of Directors and Committee of the Board accordingly. I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. I further report that during the audit period, the Company has undertaken event / action having a major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above viz. a. Appointment of Director; b. Constitution of Corporate Social Responsibility Committees; c. Issue and Allotment of Non-Convertible Debentures on Private Placement Basis.
For Aashish K. Bhatt & Associates Company Secretaries (ICSI Unique Code S2008MH100200)
Aashish Bhatt Proprietor ACS No.: 19639 COP No.: 7023
Date: August 24, 2016 Place: Mumbai
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Directors’ Report
Annexure -C FORM NO. MGT – 9 EXTRACT OF ANNUAL RETURN as on the financial year ended March 31, 2016 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS i) CIN U64200MH2005PLC158355 ii) Registration Date December 27, 2005 iii) Name of the Company Reliance Broadcast Network Limited iv) Category / Sub-Category of the Company Public Company/ Limited by Shares v) Address of the Registered Office and contact details 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053 Tel.: +91 22 3068 9444 Fax: +91 22 3988 8927 E-mail : [email protected] Website: www.reliancebroadcast.com vi) Whether listed company No vii) Name, address and contact details of Registrar and Transfer Karvy Computershare Private Limited Agent, if any Karvy Selenium Tower - B, Plot No. 31 & 32, Survey No. 116/22, 115/24, 115/25 Financial District, Nanakramguda Hyderabad 500 032, Toll free no. : 1800 4250 999 Tel.: +91 40 6716 1500 Fax: +91 40 6716 1791 E-mail: [email protected] Website: www.karvy.com II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the Business Activities contributing 10 per cent or more of the total turnover of the Company shall be stated: Sl. Name and Description of main NIC Code of the % to total turnover No. Products / Services Product / Service of the Company 1. Radio Broadcasting 601 100% III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sr. Name and address of the Company CIN / GLN Holding /Subsidiary % of Applicable No /Associate shares Section held (1) Reliance Land Private Limited U45201MH1993PTC218677 Holding 73.64 2(46) H Block, 1st Floor Dhirubhai Ambani Knowledge City Navi Mumbai 400 710 (2) Azalia Distribution Private Limited U74990MH2010PTC206706 Subsidiary of RTPL 100 2(87) 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053 (3) Azalia Broadcast Private Limited U45400MH2007PTC243437 Subsidiary 100 2(87) 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053 (4) Big Magic Limited U74900MH2011PLC216414 Subsidiary 100 2(87) 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053 (5) Cinestar Advertising Private Limited U74300MH2006PTC165298 Subsidiary 100 2(87) 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053
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III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sr. Name and address of the Company CIN / GLN Holding /Subsidiary % of Applicable No /Associate shares Section held (6) Reliance Television Private Limited (RTPL) U93000MH2010PTC206663 Subsidiary 100 2(87) 401, 4th Floor, INFINITI Link Road, Oshiwara, Andheri West Mumbai 400 053 (7) RBN US LLC N.A. Subsidiary 100 2(87) 1209, Orange Street, City of Wilmington, Delaware, 19801 (8) Reliance TV US LLC N.A. Subsidiary of 65 2(87) 1209, Orange Street, RBN US LLC City of Wilmington, Delaware, 19801 (9) Georgeville Television, LLC N.A. Subsidiary of 81 2(87) 1209, Orange Street, Reliance TV US LLC City of Wilmington, Delaware, 19801 (10) GVTV DEVCO LLC N.A. Subsidiary of 100 2(87) C/o National Corporate Research Ltd Georgeville 615 South DuPont Highway Television, LLC County of Kent Delaware 19901
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category wise Shareholding
Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % (April 01, 2015) (March 31, 2016) Change Demat Physical Total % of Demat Physical Total % of during the year Total Total Shares Shares A. Promoters 1) Indian a) Individual/HUF ------b) Central Govt. ------c) State Govt.(s) ------d) Bodies Corporate 74081430 520 74081950 93.24 74239395 520 74239915 93.44 0.20 e) Banks / FI ------f) Any Other…. ------Sub-Total (A)(1): 74081430 520 74081950 93.24 74239395 520 74239915 93.44 0.20 2) Foreign a) NRIs - Individuals ------b) Other - Individuals ------c) Bodies Corporate ------d) Banks / FI ------e) Any Other…. ------Sub-Total (A)(2): ------Total Shareholding of 74081430 520 74081950 93.24 74239395 520 74239915 93.44 0.20 Promoters (A) =(A)(1)+(A)(2) B. Public Shareholding 1) Institutions a) Mutual Funds / UTI ------b) Banks / FI 50 - 50 0.00 50 - 50 0.00 0.00 c) Central Govt. ------d) State Govt(s) ------e) Venture Capital Funds ------f) Insurance Companies ------g) FIIs/FPIs ------h) Foreign Venture Capital ------Funds i) Others (Specify) ------Sub-Total (B)(1): 50 - 50 0.00 50 - 50 0.00 0.00
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Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % (April 01, 2015) (March 31, 2016) Change Demat Physical Total % of Demat Physical Total % of during the year Total Total Shares Shares 2) Non-Institutions a) Bodies Corporate i) Indian 527933 - 527933 0.66 424461 - 424461 0.53 (0.13) ii) Overseas ------b) Individuals i. Individual shareholders 4543751 25137 4568888 5.75 4486982 26006 4512988 5.68 (0.07) holding nominal share capital up to ` 1 lac ii. Individual shareholders 186903 - 186903 0.24 186903 - 186903 0.24 - holding nominal share capital in excess of ` 1 lac c) Others (specify) Non Resident Indians 85396 50 85446 0.11 86803 50 86853 0.11 - Sub-Total(B)(2): 5343983 25187 5369170 6.76 5185149 26056 5211205 6.56 (0.20) Total Public Shareholding 5344033 25187 5369220 6.76 5185199 26056 5211255 6.56 (0.20) (B)=(B)(1)+(B)(2) C. Shares held by Custodian ------for GDRs/ADRs Grand Total (A+B+C) 79425463 25707 79451170 100.00 79424594 26576 79451170 100.00 - ii) Shareholding of Promoters
Sl. Shareholders Name Shareholding at the beginning of the year Shareholding at the end of the year % change in No. (April 01, 2015) (March 31, 2016) shareholding No. of % of total % of Shares No. of % of total % of Shares during the Shares Shares of the Pledged / Shares Shares of the Pledged / year Company encumbered Company encumbered to total to total shares shares 1. Reliance Capital Limited 15727957 19.80 - 15727957 19.80 - - 2. Reliance Land Private Limited 58353993 73.44 - 58511958 73.64 29.50 0.20 Total 74081950 93.24 - 74239915 93.44 29.50 0.20 iii) Change in Promoters’ Shareholding (Please specify, if there is no change)
Sl. Shareholding at the beginning of the year Cumulative shareholding during the year (April 1, 2015) No. No of Shares % of total shares of the No of Shares % of total shares of the Company Company 1 At the beginning of the year 74081950 93.24 157965 0.20 2 Date wise Increase / Decrease in Promoters # # # # Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 3 At the end of the year 74239915 93.44
# Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):
Sl. Shareholders’ Name Shareholding at the Date Increase / Reason Cumulative shareholding No. beginning of the year (Decrease) in during the year (April 1, 2015) shareholding No. of shares % of total No. of % of total Shares of the shares Shares of the Company Company 1 Reliance Capital Limited 15727957 19.80 - - - 15727957 19.80 2 Reliance Land Private 58353993 73.44 10.04.2015 128371 Acquisition 58482364 73.61 Limited 13.11.2015 1726 pursuant to Exit 58484090 73.61 27.11.2015 12160 Offer 58496250 73.62 15.01.2016 8752 58505002 73.63 18/03/2016 6956 58511958 73.64
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Directors’ Report iv) Shareholding Pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)
Sl. For Each of the Top Ten Shareholders Shareholding at the beginning Increase / Shareholding at the No. of the year Decrease end of the year (April 1, 2015) (March 31, 2016) No. of Shares % to total No. of Shares No. of Shares % to total shares of the shares of the Company Company 1. Sanjay Lunawat 68118 0.09 - 68118 0.09 2. Ramesh Damani 50000 0.06 - 50000 0.06 3. Umesh Chandulal Gandhi 26500 0.03 - 26500 0.03 4. Nupur Pramod Mundhra 25000 0.03 - 25000 0.03 5. Ruchira Damani 22555 0.03 - 22555 0.03 6. Daksha Dilip Sheth 21230 0.03 - 21230 0.03 7. Lumax Finance Private Limited 20500 0.03 - 20500 0.03 8. Sristhi Industries Pvt Ltd 20000 0.03 - 20000 0.03 9. Shakuntla Devi 15050 0.02 - 15050 0.02 10. Rajlaxmi Merchants Private Ltd 15500 0.02 (15500) - - v) Shareholding of Directors and Key Managerial Personnel: None of the Directors and Key Managerial Personnel are holding any shares in the Company at the beginning of the year as well as at the end of the year. V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment
(` in Lakh) Secured Loans Unsecured Loans Deposits Total excluding deposits Indebtedness Indebtedness at the beginning of the financial year i. Principal Amount 33,389.25 36,382.52 - 69,771.77 ii. Interest due but not paid 114.86 - - 114.86 iii. Interest accrued but not due 581.37 167.21 - 748.58 Total (i+ii+iii) 34,085.48 36,549.73 70,635.21 Change in Indebtedness during the financial year Additions 88,710.48 9,950.00 - 98,660.48 Reduction 12,600.29 25,878.84 - 38,479.13 Net Change 76,110.19 15,928.84 60,181.35 Indebtedness at the end of the financial year i. Principal Amount 109,499.38 20,453.68 - 129,953.06 ii. Interest due but not paid - - - - iii. Interest accrued but not due 1,103.14 255.38 - 1,358.52 Total (i+ii+iii) 110,602.52 20,709.06 - 131,311.58
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (A) Remuneration to Managing Director, Whole-time Directors and/or Manager: There were no Managing Director, Whole-time Directors and/or Manager appointed in the Company during the year. B) Remuneration to other Directors:
(` in lakh) Sr. No. Particulars of Remuneration Name of Director Total Amount 1. Independent Shri Anil Sekhri Shri Darius Shah Shri Pradeep Shah Directors l Fee for attending board/ committee 1.40 1.40 1.30 4.10 meetings l Commission - - - - l Others, please specify - - - - Total (1) 1.40 1.40 1.30 4.10
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Directors’ Report
(` in lakh) Sr. No. Particulars of Remuneration Name of Director Total Amount 2. Other Non Ms. Shubhdarshini Ghosh# Executive Directors l Fee for attending board/ committee 0.00 meetings l Commission - l Others, please specify - Total (2) 0.00 Total (B) = (1 + 2) - 4.10 Total Managerial Remuneration (A+B) - 4.10 Overall Ceiling as per the Act 497.44 Note: # Appointed as Director w.e.f. August 28, 2015. (C) Remuneration to key managerial personnel other than MD / Manager / WTD
Sr. Particulars of Remuneration Key Managerial Personnel Total No Shri. Tarun Katial Shri. Asheesh Chatterjee Ms. Shikha Kapadia Amount Chief Executive Officer Chief Financial Officer Company Secretary 1. Gross Salary a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 235.79 111.43 27.04 374.26 b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 0.29 - - 0.29 c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - - - - 2. Stock Option (Number of Options) - - - - 3 Sweat Equity - - - - 4 Commission - - - - 5 Others - - - - Total 236.08 111.43 27.04 374.55
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES: There were no penalties, punishment or compounding of offences to the Company, directors and other officers of the Company during the year ended March 31, 2016.
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Annexure – D
(a) Conservation of Energy:
The steps taken or impact on conservation of energy : The Company requires energy for its operations and the The steps taken by the Company for utilising alternate sources Company is making all efforts to conserve energy by of energy monitoring energy costs and periodically reviews of the consumption of energy. It also takes appropriate steps to The capital investment on energy conservation equipments reduce the consumption through efficiency in usage and timely maintenance/ installation/ upgradation of energy saving devices.
(b) Technology Absorption, Adoption and Innovation:
(i) The efforts made towards technology absorption : The Company uses latest technology and equipments into the business. Further the Company is not engaged in any (ii) The benefits derived like product improvement, cost manufacturing activities. reduction, product development or import substitution
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)
(a) The details of technology imported
(b) The year of import
(c) Whether technology been fully absorbed?
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof.
(iv) The expenditure incurred on research and development : The Company has not spent any amount towards research and development activities and has been active in harnessing and tapping the latest and the best technology in the industry.
(c) Total foreign exchange earnings and outgo:
a. Total Foreign Exchange earnings : Nil
b. Total Foreign Exchange outgo : ` 178.21 lakh
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Annexure – E Annual Report on Corporate Social Responsibility (CSR) activities for the financial year 2015-16 1. A brief outline of the Company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes: The Company has a robust CSR Policy at group level. As per the said policy, all our efforts are focused towards two goals: building a great enterprise for the stakeholders and a great future for our country. Our approach is to interweave social responsibility into the Company’s mainstream business functions through translating commitments into policies, which not only drive all employees but influence and mobilize stakeholders, especially partners and suppliers, to embrace responsible business practices in their respective spheres of action. The policy affirms business objectives and strategy along with our commitment to preserve natural resources and augment the growth and development of employees and families, the communities we operate in, suppliers/vendors and our investors. Through the social policy manual, the Company seeks to engage with all the stakeholders, using it as a reference or guideline for all stakeholders and practitioners. Our CSR policy is placed on our website at the link http://www.reliancebroadcast.com/corporate_sr/corporate_sr.html. 2. The composition of CSR Committee: Shri Anil Sekhri, Chairman (Independent Director) Shri Darius Kakalia, Member (Independent Director) Ms. Shubhdarshini Ghosh, Member (Non-Executive and Non-independent Director) 3. Average net loss of the Company for last three financial years: Average net loss of ` 1129.21 lakhs 4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): Since the average net profits of the three immediately preceding financial years is negative, the Company is not required to incur any expenditure on the CSR activities for the financial year 2015-16. 5. Details of CSR spent during the financial year: a. Total amount spent for the financial year :- NA b. Amount unspent, if any :- NA c. Manner in which the amount spent during the financial year is detailed below:
1 2 3 4 5 6 7 8 Sr. No. CSR Projects Sector in Projects or Amount Amount spent Cumulative Amount spent: or activity which the Programs Outlay on the projects Expenditure Direct or through identified. project is (1)Local area (budget) or programs upto the implementing covered. or other Project or Sub-heads: reporting agency. Programs (1)Direct period. (2)Specify wise. the state and expenditure district where on projects or projects or programs. programs was (2) Overheads. undertaken. Not applicable
6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report. Not applicable. 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the Company. The implementation and monitoring of CSR Policy is in compliance with CSR objectives and policy of the Company.
Tarun Katial Anil Sekhri August 24, 2016 Chief Executive Officer Chairman, CSR Committee
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Independent Auditors’ Report
TO, THE MEMBERS OF RELIANCE BROADCAST NETWORK LIMITED Report on the Standalone Financial Statements We have audited the accompanying Standalone financial statements of RELIANCE BROADCAST NETWORK LIMITED (“the Company”), which comprises the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the Standalone financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the year ended on that date. Emphasis of Matters We draw attention to following notes to the financial statements: a) Note no. 30 which described the uncertainty about the realisability of certain deposits and advances which are outstanding for a long period, as the matter is into litigations/ arbitrations. Pending outcome of such litigations/ arbitrations, the Company has not made any provision/ adjustment for said advances in the accounts. b) Note no. 41 regarding investments in and loans and advances given including interest accrued on loan given to its wholly owned major subsidiary aggregating to ` 72,252.55 lakh. The subsidiary continues to make losses and the accumulated losses have fully eroded the net worth of the said subsidiary. An external valuation report obtained by the management covers the carrying value of the above total exposure and having regards to financial support from the promoter of the Company to the subsidiary; no provision is considered necessary by the management. The valuation as aforesaid is dependent on the achievement of the projections as regards operating performance by these subsidiaries. c) Note no. 42 which described that the Company’s net worth is substantially eroded; indicating the existence of uncertainty that may cast doubt about the Company’s ability to continue as a going concern. The Company continues to get financial support from the promoter, this standalone financial statements are prepared on a going concern basis. Our opinion is not qualified in respect of this matter.
23 Reliance Broadcast Network Limited
Independent Auditors’ Report on the financial statements
Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) The matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company, f) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act. g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) rule, 2014 in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigation as at 31st March, 2016 on its financial position in its standalone financial statements as referred to in Note 29 to the financial statements;. ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. iii. There were no amounts which were required to be transferred to the Investor Education and Protection fund by the company.
For Chaturvedi & Shah Chartered Accountants Firm Registration No. 101720W
Parag D. Mehta Partner Membership No. 113904
Place: Mumbai Date: 24th August, 2016
24 Reliance Broadcast Network Limited
Annexure A to Independent Auditor’s Report
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our Report of even date) i) In respect of its fixed assets; a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets; b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme certain fixed assets were physically verified during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification. c) The Company does not have any immovable properties, thus paragraph 3(i) (c) of the order is not applicable. ii) The company’s inventory consists unamortized cost of content. Therefore, Physical verification of inventory is not required. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. iii) According to the information and explanations given to us, the Company has granted unsecured loans, to its subsidiaries covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans: a) The rate of interest and other terms and conditions on which the loans had been granted to its subsidiary Company listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company. b) In the case of the loans granted to its subsidiary company listed in the register maintained under Section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated. c) There are no overdue amounts for more than ninety days in respect of the loan granted to its subsidiary Company listed in the register maintained under Section 189 of the Act. iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made. v) According to information and explanations given to us, the Company has not accepted any deposits under the provisions of section 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed there under. vi) According to information and explanations given to us, maintenance of cost records has not been prescribed for the Company by the Central Government under sub section (1) of section 148 of the Companies Act, 2013. vii) According to the information and explanations given to us, in respect of statutory dues: a) Undisputed statutory dues, including provident fund, value added tax, cess and any other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities except in respect of profession tax, income tax (tax deducted at source) and service tax, the delays ranged from one day to one hundred ninety eight days. As explained to us, the Company did not have any dues on account of sales tax, employee state insurance, duty of customs and duty of excise. There were no undisputed amounts payable in respect of provident fund, value added tax, income tax, service tax and other material statutory dues in arrears as at 31st March, 2016 for a period of more than six months from the date they became payable except in respect of profession tax of ` 4,600/-. b) According to the information and explanations given to us, there are no dues of sales tax, income tax (tax deducted at source), service tax duty of customs, duty of excise, value added tax which have not been deposited on account of any dispute other than the following:
Name of statute Nature of the Period to which the Forum where dispute is Amount dues amount relates pending (` in lakhs) Central Excise Act, 1944 Service Tax 2006-07 and 2007-08 Commissioner, Service Tax, 1,344.10 Mumbai The Jammu & Kashmir General Sales Tax 2007-08 and 2008-09 High Court of Jammu & 68.03 General Sales Tax Act, Kashmir, Jammu 1962 Income Tax Act, 1961 Tax deducted at 2009-10 to 2015-16 Commissioner of Income Tax 19.02 source Indian Stamp Act Stamp duty 2007-08 Deputy Commissioner, 6.70 Stamp duty, Aligarh Delhi Municipal Property Tax 2004-05 to 2013-14 Deputy Assessor and 2,465.30 Corporation Act collector, Delhi viii) Based on our audit procedures and according to the information and explanations given to us, there have been no defaults in repayment of loan or borrowings to banks and financial institutions and debenture holders. The Company has not taken loan or borrowing from Government.
25 Reliance Broadcast Network Limited
Annexure A to Independent Auditor’s Report ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanation given to us, the term loans taken by the Company have been applied for the purpose for which they were raised. x) In our opinion and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year. xi) In our opinion and according to the information and explanations given to us, the Company has not paid / provided managerial remuneration. Therefore, the provisions of clause (xi) of paragraph 3 of the order are not applicable to the Company. xii) In our opinion company is not a Nidhi Company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company. xiii) In our opinion and according to the information and explanations given to us the Company’s transactions with its related party are in compliance with Sections 177 and 188 of the Companies Act, 2013, wherever applicable, and details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards. xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence reporting under clause (xv) of Paragraph 3 of the Order is not applicable to the Company. xvi) In our opinion and according to information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For Chaturvedi & Shah Chartered Accountants Firm Registration No. 101720W
Parag D. Mehta Partner Membership No. 113904
Place: Mumbai Date: 24th August, 2016
26 Reliance Broadcast Network Limited
Annexure B to Independent Auditor’s Report
ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF RELIANCE BROADCAST NETWORK LIMITED (Referred to in paragraph 2 (g) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the Internal Financial Control over financial reporting ofRELIANCE BROADCAST NETWORK LIMITED (“the Company”) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year then ended. Management Responsibility for the Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the standalone financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note. For Chaturvedi & Shah Chartered Accountants Firm Registration No. 101720W Parag D. Mehta Partner Membership No. 113904 Place: Mumbai Date: 24th August, 2016
27 Reliance Broadcast Network Limited
Balance Sheet as at 31 March 2016
(` in Lakhs) Particulars Notes As At As At 31 March 2016 31 March 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 2 3,972.56 3,972.56 Reserves and Surplus 3 3,846.29 723.23 7,818.85 4,695.79 Non-Current Liabilities Long-term borrowings 4 99,375.00 39,153.68 Deferred Tax Liability (net) 5 - - Other Long term liabilities 6 178.98 199.44 Long-term provisions 7 905.99 5,113.03 1,00,459.97 44,466.15 Current Liabilities Short-term borrowings 8 10,799.38 8,121.42 Trade payables 9 2,413.48 945.20 Other current liabilities 10 25,356.21 28,535.87 Short-term provisions 11 145.30 76.63 38,714.37 37,679.12 Total 1,46,993.19 86,841.06 ASSETS Non-current assets Fixed assets Tangible assets 12 3,589.43 4,281.49 Intangible assets 12 25,299.00 3,279.12 Capital work-in-progress 12 12,500.95 -
Non-current investments 13 284.70 284.70 Long term loans and advances 14 72,502.50 50,845.86 Other non-current assets 15 12,030.13 6,274.58 1,26,206.71 64,965.75 Current assets Inventories 16 171.13 1.75 Trade receivables 17 8,757.29 8,953.47 Cash and bank balances 18 3,314.48 2,338.65 Short-term loans and advances 19 8,387.50 10,292.09 Other current assets 20 156.08 289.35 20,786.48 21,875.31
Total 1,46,993.19 86,841.06
The accompanying notes are an integral part of the Financial Statements. 1 to 43
As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
28 Reliance Broadcast Network Limited
Statement of Profit and Loss for the year ended on 31 March 2016
(` in Lakhs) Particulars Notes For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Income I. Revenue from operations 21 34,487.89 29,009.49 II. Other Income 22 8,840.50 6,659.50
III. Total Revenue (I+II) 43,328.39 35,668.99
IV. Expenses i. Direct Expenses 23 6,531.29 6,575.87 ii. Employee benefit expense 24 6,446.81 5,797.30 iv. Finance costs 25 11,909.49 4,673.61 iii. Depreciation, amortization and impairment expense 26 2,790.23 3,167.23 v. Other expenses 27 11,190.82 9,064.04
V. Total Expenses 38,868.64 29,278.05
Profit/(Loss) before Exceptional items and tax 4,459.75 6,390.94
Exceptional Items 28 - 1,336.26
Profit/(Loss) before tax 4,459.75 5,054.68
VI. Tax expense Current tax - - Profit/(Loss) for the Year 4,459.75 5,054.68
Earning per equity share [Nominal Value of Share ` 5] each fully paid up Basic (In `) 35 5.61 6.36 Diluted (In `) 35 5.61 6.36 The accompanying notes are an integral part of the Financial Statements. 1 to 43
As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
29 Reliance Broadcast Network Limited
Cash Flow Statement for the year ended 31 March 2016
(` in Lakhs) For The Year Ended For The Year Ended 31 March 2016 31 March 2015 CASH FLOW FROM OPERATING ACTIVITIES Net profit/(loss) before taxes 4,459.75 5,054.66 Adjustment for: Less: Interest Income (8,010.25) (6,456.96) Add: Interest Expense 11,909.49 4,673.61 Add: Depreciation, amortisation and impairment expense 2,790.23 3,167.23 Add: Provision for Doubtful debts 115.82 706.45 Add: Bad Debts 631.12 - Add: Advances Written Off 622.61 84.08 Add: Provision for Doubtful Deposits/Advances 1,035.72 721.27 Add: Provision for Diminution in the value of Investments - 1,336.26 Less: Profit on sale of current investments (601.11) - Less: Foreign Exchange Gain (Net) (68.22) (43.60) Less: Excess Accruals Written Back 309.34 (247.73) Less: Sundry Credit Balance Written Back (421.83) (48.95) Less: (Profit) / Loss on sale/disposal of assets (net) 63.13 4.96 Operating profit/ (loss) before working capital changes 12,835.80 8,951.30 (Increase)/ Decrease in Inventories (169.38) 21.54 (Increase)/ Decrease in Loans and Advances 58.02 (6,047.43) (Increase)/ Decrease in Debtors (434.94) (3,095.70) Increase/(Decrease) in Current Liabilities and Provisions 981.51 635.49 Cash generated from operations 13,271.01 465.20 Taxes Paid (net of refunds) 176.00 658.42 Net cash generated from / (used in) operating activities (A) 13,447.01 1,123.62 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (including capital work-in-progress) (38,310.29) (143.18) Sale Proceeds from Fixed Assets 398.16 0.40 Purchase of Current Investments (55,575.68) - Sale of Current Investments 56,176.79 - Loans & Advances to related parties (20,674.71) (15,283.29) Fixed deposits with Bank (2,227.42) (315.97) Interest Received 3,528.92 387.23 Net cash generated from / (used in)investing activities (B) (56,684.23) (15,354.81) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase/(Decrease) in Short Term Loans 2,677.96 3,290.51 Proceeds from Long Term Loans 20,000.00 26,500.00 Repayment of Long Term Loans (2,496.61) (551.47) Proceeds from Issue of Debentures (net of Debenture Issue Expenses) 60,000.00 - Repayment of Debentures (20,000.00) (10,000.00) Premium on redemption of debentures (5,640.36) - Interest Paid (11,414.41) (4,936.94) Net cash generated from / (used in) financing activities (C) 43,126.58 14,302.10
Net increase in cash and cash equivalents (A + B + C) (110.64) 70.91 Cash and cash equivalents at beginning of the Year 1,836.32 1,765.41 Cash and cash equivalents at end of the Year 1,725.68 1,836.32 As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
30 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) 1 Summary of significant accounting policies a. Basis of preparation These financial statements are prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention. b. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles (‘GAAP’) in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future years. c. Fixed assets and depreciation/ amortisation i Tangible assets Tangible fixed assets are stated at cost less accumulated depreciation and any provision for impairment. Cost includes freight, duties, taxes (other than those recoverable from tax authorities) and other expenses related directly/indirectly to the acquisition / construction and installation of the fixed assets for bringing the asset to its working condition for its intended use. Depreciation on fixed assets is provided on the straight line method over the useful life of the assets as prescribed in Schedule II of the Companies Act, 2013. Leasehold improvements are depreciated over the lower of the useful life of the asset and the lease term, on a straight line basis. Bus Queue Shelters under BOT Schemes are depreciated over the useful life being the contract period on uniform basis. Individual assets costing up to ` 0.05 lakhs are depreciated fully in the year of acquisition. ii Intangible assets Intangible assets, all of which have been acquired and are controlled through custody or legal rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and 10 years. Application software purchased, which is not an integral part of the related hardware, is shown as intangible assets and amortised on a straight line basis over its useful life, not exceeding ten years, as determined by management. One Time Entry Fees paid for acquiring FM radio broadcasting licenses has been capitalised as an asset and is amortised over a period of ten years, being the period of the license, from the date of operationalisation of the station. Purchased goodwill is recognised by the Company on the basis of excess of purchase consideration paid over the value of the assets acquired at the time of acquisition and is amortised over its estimated useful life not exceeding five years. d. Impairment In accordance with AS 28 – ‘Impairment of Assets’, where there is an indication of impairment of the Company’s asset, the carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss. Value in use is present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. e. Investments Investments are classified as long term or current based on intention of the management at the time of purchase. Current investments are valued, scrip wise, at cost or fair value , whichever is lower. Long-term investments are carried at carrying cost less diminution in value which is other than temporary, determined separately for each individual investment. f. Inventories Inventories are stated at lower of cost and net realisable value. Cost of Event / Content which does not create any rights are charged to the statement of profit and loss on exploitation. Event / Content cost covers the cost of acquisition/ execution of the award, function / concerts, cost of content like sports events, video albums etc. Cost of television programmes comprises of material, cost of services and other expenses. Pilot episodes are stated at cost. Pilots are written off after the end of one year from the year of production of respective pilot in case the same is not developed into a serial.
31 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
Amortisation Policy for Event / Content Cost: (` in Lakhs) In case rights are available in perpetuity Costs of Annual Award/Concerts are amortised at 80% in the year of event execution and 20% in the subsequent year. Costs of Other Content are amortised at 60% in the year of commercial exploitation and 40% over the subsequent two years equally. g. Share / Debenture Issue Expenses Share / Debenture Issue expenses are adjusted against securities premium account. h. Employee benefits Short-term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered. The Company’s contribution to provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss as incurred. Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation carried out by an independent actuary at the balance sheet date using Projected Unit Credit Method. i. Employee Stock Option Scheme (“ESOS”) The Employees Stock Option Scheme (“the Scheme”) provides for grant of equity shares of the Company to Directors (including whole time) and employees of the Company and its subsidiaries. The Scheme provides that employees are granted an option to acquire equity shares of the Company that vests in a graded manner. The options may be exercised within a specified period. The Company follows the intrinsic value method to account for its stock – based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date and is amortised over the vesting period of the option on a Straight Line Basis. The fair market price is the latest closing price, immediately prior to the date of the Board of Directors meeting in which the options are granted, on the stock exchange on which the shares of the Company are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered. j. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The amount recognised as revenue is net of trade discounts and service tax. Revenue from sale of airtime Revenue from Radio broadcasting is recognised on an accrual basis on the airing of the customers commercials, net of agency commission. Revenue from sale of telecast rights Revenue from sale of telecast rights of event and content is recognized on the date when the rights are made available to the assignee for exploitation. Revenue from television programe Revenue from commissioned programmes are recognised as and when the relevant episodes of the programmes are delivered to the channels. Out of Home Media Advertising space revenue, net of taxes, rebate and discount is recognised on the display of advertisements over the year of the contract. Revenue from Experiential Marketing Revenue from experiential marketing which includes event management and activations are recognised on the completion of the event and on the basis of related services performed, as per the contracted terms. Interactive Revenue Revenue from short code, short messaging service (‘SMS’) is recognised on acceptance of the hits by telecom operators. Management Fees Management fee is recognised as revenue on time proportion basis as per relevant agreements. Interest income Interest income is recognised on a time proportion basis. k. License Fees As per the Frequency Module (FM) broadcasting policy, effective 1 April 2005 license fees were charged to revenue at the rate of 4% of gross revenue for the year or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever was higher. ROTEF means 25% of highest valid bid in the city.
32 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) As per the Policy Guidelines on expansion of FM Radio Broadcasting Services through private agencies (Phase-III) and Grant of Permission Agreements signed by the Company, effective 1 April 2015, license fees are charged to revenue at the rate of 4% of gross revenue for the year or 2.5% of Non-refundable One Time Entry Fees (NOTEF) for the concerned city, whichever is higher. NOTEF means successful bid amount arrived at through an ascending e-auction process. Gross Revenue for this purpose shall mean revenue on the basis of billing rates without deduction of taxes and agency commission and net of discounts to advertisers. Barter advertising contracts shall also be included in the gross revenue on the basis of relevant billing rates. l. Foreign currency transactions Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss of the year. Monetary items are restated at the year ended rates. The exchange differences between the rate prevailing on the date of transaction and on settlement/restatement (other than those relating to acquisition of fixed assets) is recognised as income or expense, as the case may be. Non-monetary items which are carried at historical costs denominated in foreign currency are reported using the exchange rate at the date of the transaction. In respect of integral foreign operations of the company, fixed assets are translated at the rates on the date of acquisition, monetary assets and monetary liabilities are translated at the rate on the date of the balance sheet and income and expenditure are translated at the average of weekly average rates during the year. m. Borrowing costs Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. n. Leases The Company has various operating leases, principally for radio stations, office space and equipments with various renewal options. Substantially all operating leases are cancelable as well as renewable on expiry of lease term. Rental expense in agreements with scheduled rent increases is recorded on a straight-line basis as applicable over the lease term. o. Earning Per Share In determining earning per share, the company considers the net result after tax and includes the post tax effect of any extraordinary / exceptional item. The number of shares used in computing basic earning per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earning per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares that could have been issued on the conversion of all dilutive potential equity shares unless the results would be anti-dilutive. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. p. Taxation Tax expense comprises current tax expense computed in accordance with the relevant provisions of the Income Tax Act, 1961 and deferred tax charge or credit. Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions, in accordance with the Income Tax Act, 1961. Deferred tax charge or credit and the corresponding deferred tax liability or asset is recognised for timing differences between the profits/ losses offered for income taxes and profits/ losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down/up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. q. Provisions and contingencies Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Company recognizes it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated. 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. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.
33 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
2. Share Capital As At As At 31 March 2016 31 March 2015 Authorised Shares 20,00,00,000 (Previous Year: 20,00,00,000 ) Equity Shares of ` 5/- each 10,000.00 10,000.00 10,00,00,000 (Previous Year: 10,00,00,000) Preference Shares of ` 5/- each 5,000.00 5,000.00 15,000.00 15,000.00
Issued, Subscribed and Paid Up 7,94,51,170 (Previous Year: 7,94,51,170) Equity Shares of ` 5/- each fully paid up 3,972.56 3,972.56 3,972.56 3,972.56
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting year Equity Shares As at 31 March 2016 As at 31 March 2015 No. of Shares ` No. of Shares ` At the beginning of the year 7,94,51,170 3,972.56 7,94,51,170 3,972.56 Issued during the year - - - - Outstanding at the end of the year 7,94,51,170 3,972.56 7,94,51,170 3,972.56
b. Terms/rights attached to equity shares The company has only one class of equity shares having a par value of ` 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends if any, in Indian rupees. The dividend proposed if any, by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
c. Details of shareholders holding more than 5% shares of the company As at 31 March 2016 As at 31 March 2015 No. of Percentage of No. of Percentage of Shares holding Shares holding Equity shares of ` 5 each fully paid Reliance Land Private Limited (Holding 5,85,11,958 73.64 5,83,53,993 73.44 Company) Reliance Capital Limited 1,57,27,957 19.80 1,57,27,957 19.80
3. Reserve & Surplus
As at As at 31 March 2016 31 March 2015 Capital Reserve As per last balance sheet 3,497.24 3,497.24
Securities Premium Account As per last balance sheet 31,063.09 33,363.87 Less: Premium Payable on Redemption of Debentures 1,336.69 2,300.78 29,726.40 31,063.09 Debenture Redemption Reserve As per last balance sheet 5,000.00 - Add : Transferred from statement of profit & loss 2,751.53 5,000.00 7,751.53 5,000.00
34 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) As at As at 31 March 2016 31 March 2015 (Deficit) in the statement of Profit & Loss As per last balance sheet (38,837.10) (38,764.53) Add: Impact of Change in Useful life of Assets (As per Schedule II of the Companies - (127.25) Act, 2013) Add: Profit/(Loss) for the year 4,459.75 5,054.68 (34,377.35) (33,837.10) Less: Appropriations out of current year profit Transferred to Debenture Redemption Reserve 2,751.53 5,000.00
(37,128.88) (38,837.10)
Total Reserve & Surplus 3,846.29 723.23
4. Long Term Borrowings As At 31 March 2016 As At 31 March 2015 Secured Current Non-current Current Non-current Loans from body corporates (refer note a) - - 150.29 - Non-Convertible Debentures (refer note - 60,000.00 5,000.00 - b,c,d,e,f) Loan from Banks (refer note g,h,i) 2,125.00 39,375.00 - 21,500.00
2,125.00 99,375.00 5,150.29 21,500.00
As At 31 March 2016 As At 31 March 2015 Unsecured Current Non-current Current Non-current
Loans from body corporates (refer note j) 2,653.68 - 2,346.32 2,653.68 Zero Coupon Debentures (refer note k) - - 15,000.00 - Loan From Bank (refer notes l) 15,000.00 - - 15,000.00 17,653.68 - 17,346.32 17,653.68
Total Long term borrowings 19,778.68 99,375.00 22,496.61 39,153.68 a. Loan from body corporates of ` NIL (Previous Year: ` 150.29 Lakhs) carried interest rate of IRR 14%. The term of repayment was on 12 quarterly equated installment basis from the date of disbursement of loan i.e. 1 April, 2012. The loan was secured by second charge on present and future fixed assets of the Company which were subordinate to the existing first pari-passu charge created by the company. b. The Company had issued 11.50% 1,500 Secured Redeemable Non Convertible Debentures (Debentures) amounting to ` NIL(Previous Year: ` 15,000.00 Lakhs), having face value of ` 10.00 Lakhs each on a private placement basis on 28 September, 2012. The said Debentures were listed on National Stock Exchange (NSE) w.e.f. 01 November, 2012 which were subsequently delisted w.e.f. 07 November, 2014. The said debentures were secured by first pari passu charge by way of hypothecation of all assets of the Company with a minimum asset cover of 1.25 times to be maintained at all times till the maturity of debentures. The debentures were redeemable in three equal installments at the end of 24 months, 30 months and 36 months (i.e. 28 September, 2014, 28 March, 2015, 28 September 2015). All the debentures have been redeemed as on date. c. The Company has issued 9.5% 1,500 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 15,000.00 Lakhs, having face value of ` 10.00 Lakhs each on a private placement basis on 13th May 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with unconditional and irrevocable mandatory PUT in favor of the debenture trustee on behalf of debenture holder for timely repayment of all amounts, from one of the promotor of the Company. The debentures are redeemable in three equal installments at the end of 3 years and 1 day, 4 years and 5 years from date of allotment. d. The Company has issued 9.5% 2,000 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 20,000.00 Lakhs, having face value of ` 10.00 Lakhs each on a private placement basis on 20th July 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover
35 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with unconditional and irrevocable mandatory PUT in favor of the debenture trustee on behalf of debenture holder for timely repayment of all amounts, from one of the promoter of the Company. The debentures are redeemable in three equal installments at the end of 3 years, 4 years and 5 years from date of allotment. e. The Company has issued 9.5% 1,500 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 15,000.00 Lakhs, having face value of ` 10.00 Lakhs each on a private placement basis on 6th August 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with an undertaking from one of the promoter of the Company that any shortfall in maintainance of the DSRA for the facility shall be maintained by that Promotor. The obligation of the promoter shall be at maximum limited to the DSRA support undertaking amount. The debentures are redeemable in three equal installments at the end of 2 years 10 months 22 days, 4 years and 5 years from date of allotment. f. The Company has issued 11.6% 1,000 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 10,000.00 Lakhs, having face value of ` 10.00 Lakhs each on a private placement basis on 8th October 2015. The said debentures are secured inter alia by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon thereon along with an undertaking from one of the promoter of the Company that any shortfall in maintainance of the DSRA for the facility shall be maintained by that promoter. The Obligation of the promoter shall be at maximum limited to the DSRA support undertaking amount. The debentures are redeemable in three equal installments at the end of 3 years, 4 years and 5 years from date of allotment. g. Loan from bank of ` 8,500.00 Lakhs (Previous Year: ` 8,500.00 Lakhs) carries interest rate of of YBL Base Rate + 100 bps. The loan is for a tenure of 4 years from the date of first disbursement i.e. 29 September, 2014 with a moratorium of 2 years and repayment in 4 half yearly equated installment thereafter. The loan is secured by first Pari-Passu charge on all the non-current assets (excluding investments) and current assets (including loans and advances) of the company and on all revenues, cash-flows, bank accounts of the company and whole of movable fixed assets alongwith unconditional and irrevocable corporate guarantee from one of the shareholders of the Company. h. Loan from bank of ` 10,000.00 Lakhs (Previous Year: ` 10,000.00 Lakhs) carries interest rate of Indusind Bank Base Rate, payable monthly. The loan is for a tenure of 5 years from the date of first disbursment with a moratorium of 2 years. Loan is repayable in 3 equal installments at the end of 3rd, 4th and 5th year from the date of first disbursement i.e 16 February, 2015. The loan is secured by first Pari-Passu charge on entire non-current assets and current assets of the company and on first Pari-Passu charge on all movable fixed assets of the company along with an undertaking from one of the promoter of the Compay that any shortfall in maintainance of the DSRA for the facility shall be maintained by that promoter.. i. Loan from bank of ` 23,000.00 Lakhs (Previous Year: ` 3,000 Lakhs) carries interest rate of Indusind Bank Base Rate payable monthly. The loan is for a tenure of 5 years from the date of each disbursment with a moratorium of 2 years and repayable in 11 quarterly equal installment starting from the end of 30th month from the date of disbursement i.e 31 March, 2015. The loan is secured by first Pari-Passu charge on entire non-current assets and current assets of the company and on first Pari-Passu charge on all movable fixed aseets of the company. j. Loan from body corporates of ` 2,653.68 Lakhs (Previous Year: ` 5,000 Lakhs) carries interest rate of IRR 12.5%. The terms of repayment is on 8 quarterly equated installment basis from the date of disbursement of loan i.e. 10 March, 2015. k. The Company had issued 1,500 Zero Coupon unsecured redeemable non convertible Debentures amounting to ` NIL (Previous Year: ` 15,000.00 Lakhs) having face value of ` 10 Lakhs each on a private placement basis. These Debentures were redeemable on 8th August, 2015 i.e. 1095 days from the date of issue i.e. 9 August, 2012 and has an implicit yield of 12.60% in form of redemption premium. As on date all the debentures have been redeemed. l. Loan from Bank of ` 15,000.00 Lakhs (Previous Year: ` 15,000.00 Lakhs) carries interest rate of 11.5% payable monthly. The terms of repayment is repayment in full after 36 months from the drawdown date i.e 28 March, 2014 except in case of the exercise of the Call /Put Option by either party providing 7 (Seven) days written notice to other party on option date, to repay all outstanding due (Option date is the date occurring on the expiry of 18 (Eighteen) months from the drawdown date. Unconditional and irrevocable corporate gurantee is given by one of the promoter of the Company. 5. Deferred Tax Liability (net) Particulars As At As At 31 March 2016 31 March 2015 Deferred Tax Liability Related to Fixed Assets 990.86 -
Deferred Tax Asset Other disallowances under Income Tax Act, 1961 990.86 - Carry forward business loss / unabsorbed depreciation - - Net deferred tax liability at the end of the year - -
Note: In the absence of virtual certainty, deferred tax assets has been recognised to the extent it can be realised against reversal of deferred tax liability on account of depreciation.
36 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) 6. Other Long Term Liabilities As At As At 31 March 2016 31 March 2015 Lease Rent Liability 139.22 159.68 Security Deposits 39.76 39.76 178.98 199.44
7. Long Term Provisions As At As At 31 March 2016 31 March 2015 Provision for employee benefits (refer note 31) Gratuity 140.62 102.27 Leave benefits 6.82 5.91 Deferred Compensation 57.37 - Premium Payable on Redemption of Debentures 701.18 5,004.85 905.99 5,113.03
8. Short Term Borrowings As At As At 31 March 2016 31 March 2015 Loans repayable on demand (secured) From Banks (refer note a) 3,970.38 3,788.90 From Body corporates (b, c, d, e) 4,029.00 2,950.00
Other Loans and advances (Unsecured) From Banks (refer note f) - 882.52 From Body corporates (refer note g,h,i) 2,800.00 500.00 10,799.38 8,121.42 a. Loan from bank ` 3,970.37 Lakhs (Previous year: ` 3,788.90 Lakhs) is secured by first pari passu charge on, the entire current assets of the Company, existing and future, comprising, inter alia, stocks of raw material, work in progress, finished goods and other current assets, the entire book debts and receivables of the Company existing and future, the entire movable fixed assets of the Company, existing and future including without limitation movable plant and machinery etc along with an unconditional and irrevocable corporate guarantee from one of the promoter of the Company. It is repayable on demand bearing interest rate at Bank’s base rate + 175 bps p.a. b. Secured Loan from body corporates ` 3,000 Lakhs (Previous Year: ` NIL) is carrying interest at the rate of 15.5% and is repayable after a term of One year from the date of disbursement i.e. on 4th February, 2016. The Loan is secured by residual charge on all current assets. c. Secured Loan from body corporates ` 1,029.00 Lakhs (Previous Year: ` NIL) is carrying interest at the rate of 15.5% and is repayable after a term of One year from the date of disbursement i.e. on 30th March 2016. The Loan is secured by residual charge on all current assets. d. Secured Loan from body corporates ` NIL (Previous Year: ` 1,450 Lakhs) was carrying interest at the rate of 14% and was repayable after a term of One year from the date of disbursement. The Loan was secured by residual charge on all current assets. The loan was repaid on 16th September, 2015. e. Secured Loan from body corporates ` NIL (Previous Year: ` 1,500 Lakhs) was carrying interest at the rates 14% and was repayable on 31 March 2015 The Loan was secured by residual charge on all current assets. The loan was repaid on 14th May, 2015. f. Unsecured loan from Bank ` NIL (Previous year: ` 882.52 Lakhs) was repayable within the due date of the monthly billing cycle or repayable on demand g. Unsecured loan from body corporates ` 500.00 Lakhs (Previous Year: ` NIL) is carrying interest at the rate of 13% and repayable after a term of one year from the date of disbursement i.e. 29th February, 2016. h. Unsecured loan from body corporates ` 2,300.00 Lakhs (Previous Year: ` NIL) is carrying interest at the rate of 11.5% and repayable after a term of one year from the date of disbursement i.e. 30th December, 2015. i. Unsecured loan from body corporates ` NIL (Previous Year: ` 500.00 Lakhs) is carrying interest at the rate of 13% and repayable after a term of one year from the date of disbursement. The loan was repaid on 25th February, 2016.
37 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
9. Trade Payables As At As At 31 March 2016 31 March 2015 Micro, Small and Medium Enterprises (refer Note 9.1) - - Others 2,413.48 945.20 Net Barter Debtors - - 2,413.48 945.20
9.1 Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosure are given below:
Particulars As At As At 31 March 2016 31 March 2015 Principal amount remaining unpaid - - Interest due thereon - - Interest paid by the company in terms of Section 16 of Micro, Small and Medium - - Enterprises Development Act, 2006, along with the amount of the payment made to the suppliers beyond the appointed day during the year Interest due and payable for the year of delay in making payment (which have been - - paid but beyond the appointed day during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006 Interest accrued and remaining unpaid - - Further interest remaining due and payable even in the succeeding period until such - - date when the interest dues as above are actually paid to the small enterprise. - -
10. Other Current Liabilities As At As At 31 March 2016 31 March 2015 Current maturities of long term borrowings (refer note 4) 19,778.68 22,496.61 Interest accrued but not due on borrowings 1,358.52 748.58 Interest accrued and due on borrowings - 114.86 Others Deposits from customers and employees 0.07 2.34 Advance from Customers 174.80 364.12 Statutory Dues Payable 303.79 320.17 Balance with Bank - Overdrawn as per Books - 213.53 Employee Benefits Payable 767.47 385.09 Creditors for Capital Expenditure - 12.60 Provision for Expenses 2,972.88 3,725.26 Other Payables - 152.71 25,356.21 28,535.87 11. Short Term Provisions As At As At 31 March 2016 31 March 2015 Provision for employee benefits (refer note 31) Gratuity 85.15 71.38 Leave benefits 5.92 5.25 Deferred Compensation 54.23 - 145.30 76.63
38 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016 - 2015 March March 57.90 48.61 26.84 21.95 29.92 572.06 285.05 As on 31 in Lakhs) 3,554.14 4,281.50 2,964.15 3,279.12 12,500.95 ` ( - Net Block 75.19 39.55 17.36 12.74 22.25 336.47 198.43 As on 31 Mar 2016 Mar 3,108.38 3,589.71 4,281.50 3,279.12 25,078.32 25,299.00 - - - - - 9.16 6.12 2016 Till Mar Mar Till 255.14 279.46 549.88 549.88 567.54 567.54 567.54 Impairment 54.58 400.45 219.53 831.90 178.70 792.12 273.58 As on 31 Mar 2016 Mar 2,803.92 10,887.51 15,322.01 14,531.46 14,893.08 16,013.36 14,567.83 ------April April 9.95 2.02 31.96 43.93 43.48 2015 to 2015 to Deletions Deletions Mar 2016 Mar - 4.42 7.67 2016 Period Period to Mar Mar to 32.72 20.98 16.56 For the For 498.64 261.16 834.47 784.65 119.72 1,828.36 1,955.75 1,775.39 April 2015 April ------as per as per Revised Revised Depreciation/Amortisation 127.25 11,690.74 lakhs Non-refundable One Time Entry Fees (‘NOTEF’) for these these for (‘NOTEF’) Entry Time Fees One Non-refundable lakhs 11,690.74 ` Schedule II Schedule Depreciation Depreciation (Refer note i) note (Refer 786.84 Lakhs. Consequently, the profit before tax for the period ended would have been would have the period ended for tax before the profit 786.84 Lakhs. Consequently, 46.91 ` As on 1 369.75 198.55 815.35 206.23 672.39 273.58 127.25 Lakhs had been charged to the opening balance of retained earnings for the assets, for earnings retained of the opening balance to 127.25 Lakhs had been charged 2,542.76 ` 10,398.81 14,531.46 13,663.06 13,064.72 14,057.61 12,792.44 April 2015 April 76.83 484.81 265.20 849.27 191.45 990.55 841.12 Nil) . As on 31 ` Mar 2016 Mar 3,419.85 14,251.03 19,461.60 19,362.85 39,971.40 41,879.90 17,904.25 Gross Block Gross ------2.02 2016 26,807.94 lakhs and the net migration fees after taking into account the residual value of the Phase II licenses licenses II the Phase of value residual the account into taking after fees net migration the and 26,807.94 lakhs to Mar Mar to 36.74 48.83 ` 223.42 242.35 504.53 Deletions Deletions April 2015 April - - - 0.52 2016 to Mar Mar to 50.02 11.92 25.57 33.12 266.36 249.43 603.29 142.67 Addition 23,942.53 23,975.65 April 2015 April 810.21 lakhs (Previous year year (Previous 810.21 lakhs April April ` 2015 76.83 As on 1 436.82 253.28 842.19 228.19 957.44 841.12 3,394.28 14,208.09 19,362.85 19,269.02 16,028.87 17,904.25 17,903.74 23,942.53 lakhs. NOTMF has a remaining amortization period of fourteen years. amortization has a remaining fourteen period of NOTMF 23,942.53 lakhs. ` The Company had revised depreciation rates on fixed assets w.e.f. 1 April, 2014 as per the useful life specified in Schedule II of the Companies (the 2013 Act, Companies the of II Schedule in specified life useful the per as 2014 April, 1 w.e.f. assets fixed on rates depreciation revised had Company The Act, an amount of the II of in the saidAs Schedule prescribed “Act”). on the based had been calculated depreciation assets on that date, other April, 2014. In respect of as on 1 life useful no remaining was there which in respect of Act, 1956, the depreciation Companies as per XIV rates Schedule applicable with the previously continued assets. those Had the Company of life useful remaining by been higher have 2015 would 31 March, ended the year for charge amounts. similar by lower was given Company 1, 2015 the April III), effective (Phase Agencies Private Services through Radio Broadcasting FM expansion of for policy the modified As per NOTMF (‘NOTMF’). Fees Migration Time One Non Refundable of on payment III regime Phase to II regime Phase from its licenses existing all migrate the option to to II Phase from its 44 out of 45 stations to migrate the option exercised had Company The 24, 2015. by the MIB on September notified was station each for was fees migration gross the which for III Phase was paid Company The auctions. III Phase the in licenses new 14 won Company The stations. All the Phase III licenses have a tenure of 15 years from the date of operationalization of such licenses. of operationalization of the date from 15 years of a tenure have III licenses the Phase All stations. of cost borrowing Includes 12 Fixed Assets 12 Fixed Particulars Asset Tangible & MachineryPlant Equipments Office & Fixtures Furniture Machines Processing Data Improvements Leasehold Vehicles Total Year Previous Asset Intangible Radio broadcasting license 1 and note c (ii) of (Refer ii below) note Software Computer Copyrights Goodwill Total Year Previous iii & iv) note (Refer in Progress Work Capital i) ii) iii) iv)
39 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
13. Non-current Investments As At As At 31 March 2016 31 March 2015 Investments in Equity Instruments (Non-trade, unquoted and at cost) In subsidiary companies Reliance Television Private Limited 4,010.00 4,010.00 410,900 (Previous Year: 410,900) Equity Shares of ` 10 each fully paid up Less: Provision for Diminution in the value of Investments 4,010.00 4,010.00 - - Cinestar Advertising Private Limited 1,336.26 1,336.26 18,558 (Previous Year: 18,558) Equity Shares of ` 10 each fully paid up Less: Provision for Diminution in the value of Investments 1,336.26 1,336.26 - - BIG Magic Limited 5.00 5.00 50,000 (Previous Year: 50,000) Equity Shares of ` 10 each fully paid up RBN US LLC 279.70 279.70 100% Ownership Interest (Previous Year: 100%) 284.70 284.70
Aggregate value of unquoted investments 5,630.96 5,630.96 Aggregate Provision for Diminution in the value of Investments 5,346.26 5,346.26
14. Long Term Loans and Advances As At As At 31 March 2016 31 March 2015 (Unsecured and considered good unless otherwise stated) Capital Advances 1,230.00 - Security Deposit Secured, considered good Considered good (refer note 30) 1,800.29 2,193.11 Considered doubtful 1,475.51 661.62 3,275.80 2,854.73 Less: Provision for doubtful security deposit 1,475.51 661.62 1,800.29 2,193.11
Loans and advances to related parties (refer note 33 & 40)) 68,410.90 47,736.19 Less: Provision for doubtful Loans and advances 6,000.00 6,000.00 62,410.90 41,736.19
Loans and advances to Others 2,300.00 2,653.68
Other loans and advances Advance Tax (net of provision for tax) 1,391.03 1,567.03 Prepaid Expenses 3,370.28 2,695.85 4,761.31 4,262.88
72,502.50 50,845.86
40 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
15. Other Non-Current Assets As At As At 31 March 2016 31 March 2015 Unsecured, considered good unless stated otherwise Interest accrued on Fixed Deposits - 0.47 Interest accrued but not due on Loans and Advances to Related Parties 10,858.73 6,243.66 Margin Deposits* 1,171.40 30.45 12,030.13 6,274.58
* Balances in margin money accounts represent fixed deposits with banks with maturity of more than twelve months.
16. Inventories (valued at lower of cost and net realizable value) As At As At 31 March 2016 31 March 2015 Events / Contents 171.13 1.75
171.13 1.75
17. Trade Receivables As At As At 31 March 2016 31 March 2015 Unsecured, considered good Outstanding for a period exceeding six months from the date they are due for payment 921.60 1,280.28 Other Debts 7,835.69 7,673.19 8,757.29 8,953.47 Unsecured, considered doubtful Outstanding for a period exceeding six months from the date they are due for payment 357.60 1,099.83 Other Debts - - 357.60 1,099.83 Less: Provision for doubtful receivables 357.60 1,099.83 - - 8,757.29 8,953.47
18. Cash and Bank Balances As At As At 31 March 2016 31 March 2015 Cash and Cash Equivalents
Balances with banks: Current Accounts 1,718.56 1,107.75 Fixed Deposits with original maturity of less than three months - 723.39 Cash on hand 7.12 5.18 1,725.68 1,836.32 Other Bank Balances In Fixed Deposits with original maturity of more than three months and less than - 307.26 twelve months Margin Deposits with maturity of less than twelve months 1,588.80 195.07 3,314.48 2,338.65
41 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
19. Short Term Loans and Advances As At As At 31 March 2016 31 March 2015 Unsecured and considered good unless otherwise stated
Security Deposit 2.06 8.96 Loans and advances to related parties (refer note 33 & 40) - 1,516.90 Loans and advances to Others 3,653.68 2,346.32 Loans and advances to employees 81.99 67.78 Other loans and advances Prepaid Expenses (refer note 30) 2,287.81 1,925.01 Advance to Vendors (refer note 30) 1,254.97 1,556.00 Claim/Other Receivables (refer note 30) 1,970.03 2,978.44 Deposits with Service Tax authorities 32.11 52.75 Cenvat Credit Receivable 187.20 705.58 5,732.12 7,217.78
Less: Provision for doubtful advances 1,082.35 865.65 8,387.50 10,292.09
20. Other Current Assets As At As At 31 March 2016 31 March 2015 Interest accrued but not due on Loans and Advances to Related Parties - 201.70 Interest accrued but not due on Loans and Advances to Others 56.14 40.84 Interest accrued on Fixed Deposits 99.94 46.81 156.08 289.35
21. Revenue from Operations For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Revenue from Operations Sale of Services 32,685.27 27,908.03
Other Operating Revenue Management Fees 1,069.45 766.58 Excess Accruals Written Back 309.34 247.73 Sundry Credit Balances Written Back 421.83 48.95 Syndication Income - 19.74 Other Revenue 2.00 18.46 34,487.89 29,009.49
For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Details of services rendered Sale of Airtime 32,685.27 25,285.73 Television Programme Production Income - 2,619.49 Out of Home Media Income - 2.81 32,685.27 27,908.03
42 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
22. Other Income For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Interest Income on Bank Deposits 163.88 43.82 Interest Income on loans and advances 7,733.15 6,286.64 Interest on Income Tax Refund 113.22 126.50 Income from facility sharing 132.87 158.83 Profit on sale of current investments 601.11 - Foreign Exchange Gain (net) 74.04 43.60 Miscellaneous Income 22.23 0.11 8,840.50 6,659.50
23. Direct Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Royalty 433.16 386.15 Transmission Expenses - Power & Fuel 676.13 675.40 - License Fees 176.06 137.13 - Other transmission cost 46.72 49.70 Out of Home Media Expenses 502.24 24.41 Revenue Sharing Licence Fees 2,168.05 1,421.29 Television Programme, Content and Other Production Expenses: Opening Inventory 1.75 23.29 Add : Production Expenses - Equipment Hire Charges 1.18 249.15 - Location Hire Charges - 121.73 - Professional Fees 2,581.28 2,505.80 - Other production cost 115.86 983.57 Less : Closing Inventory (171.13) (1.75) 6,531.29 6,575.87
24. Employee Benefit Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Salaries, wages and bonus 5,872.97 5,321.60 Contribution to Provident and other funds 240.12 203.95 Gratuity Expense 86.18 57.38 Leave Encashment 1.58 2.09 Staff Welfare Expenses 245.96 212.28 6,446.81 5,797.30 25. Finance Costs For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Interest 10,704.91 4,408.75 Other Borrowing Costs 1,204.58 264.86 11,909.49 4,673.61 26. Depreciation, amortisation and impairment expense For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Depreciation/Impairment of tangible assets 834.48 1,334.53 Amortisation/Impairment of intangible assets 1,955.75 1,832.70 2,790.23 3,167.23
43 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
27. Other Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Advertisements 1,477.67 1,284.21 Sales Incentive 1,023.21 354.84 Bank Charges 135.80 47.63 Bad Debts 631.12 - Business Promotion 130.27 88.85 Rent, Rates and Taxes 2,441.57 2,414.41 Travelling and Conveyance 496.62 462.99 Payment to Auditor (Refer note below) 37.00 52.00 Electricity Charges 456.07 450.94 Insurance Charges 13.82 15.03 Legal and Professional Fees 635.63 648.37 Director's Sitting Fees 4.10 4.50 Loss on Sale/Disposal of Assets (net) 63.13 4.96 Communication Expenses 180.08 174.80 Printing and Stationery 54.57 45.02 Provision for Doubtful Debts (net of doubtful debts written off ` 845.31 Lakhs; 115.82 706.45 Previous year: ` 772.50 Lakhs) Provision for Doubtful Deposits/Advances/Others (net of doubtful advance written 1,035.72 721.27 off ` 449.97 Lakhs; Previous year: ` 264.78 Lakhs) Deposits/Advances Written Off 622.61 84.08 Repairs and Maintenance - Repairs to Machinery 276.31 239.19 - Repairs to Others 568.51 546.76 Security Charges 217.70 162.31 Housekeeping Charges 213.65 176.39 Computer / Internet / Intranet 210.49 209.56 Conference Expense 70.68 117.81 Other Miscellaneous Expenses 78.67 51.67 11,190.82 9,064.04
Payment to auditor (excluding service tax) For The Year Ended For The Year Ended 31 March 2016 31 March 2015 As auditor: Audit fee 30.00 45.00 In other capacity: Other services (certification fees) 7.00 7.00 37.00 52.00 28. Exceptional Items For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Provision for Diminution in the value of Investments - 1,336.26
- 1,336.26
44 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) 29 Contingent Liabilities
Particulars 31 March 2016 31 March 2015 Bank Guarantees 2,750.61 6,065.61 Claims against the company not acknowledged as debt 779.20 653.81 Disputed Service tax demand (excluding penal interest) 1,376.21 1,396.85 Disputed Income tax demand 19.02 63.45 Disputed Stamp duty 6.70 6.70 Disputed Property Tax 2,465.30 2,465.30 Disputed Sales tax 68.04 68.04 7,465.08 10,719.77
The company is a party to various legal proceedings in the normal course of business and does not expect the outcome of these proceedings to have any adverse effect on its financial conditions, results of operations or cash flows. 30 The Company is into litigations and arbitrations with various Statutory Corporations, Copyright Society and private parties for the claims made on or by the Company. These matters are subjudice and pending before various courts/ arbitrators. Pending the outcome of the said litigations and arbitrations, the Company has not made any provisions/adjustment for the Security deposits and Advances paid to them aggregating to ` 2,123.70 Lakhs (Previous year ` 3,164.53 Lakhs). The Company is hopeful of recovering the said deposits and advances. 31 Employee Benefits Defined Contribution Plan Contribution to Defined Contribution Plan, recognised as expense for the year are as under :
Particulars 31 March 2016 31 March 2015
Employers contribution to Provident fund and other funds 240.12 203.95 Other long term employee benefits comprises encashment of leave and deferred compensation plan. The obligations for leave encashment and deferred compensation plan are recognised based on actuarial valuation carried out using the Projected Unit Credit Method. Expense recognised in the Statement of Profit and Loss during the current year is ` 1.58 Lakhs (Previous Year: ` 2.09 Lakhs) and ` 111.60 Lakhs (Previous year ` NIL) respectively. Defined Benefit Plan Gratuity The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each year 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 leave encashment is recognised in the same manner as gratuity.
I. Reconciliation of opening and closing balances of Defined Benefit obligation
Particulars 31 March 2016 31 March 2015
Gratuity (Unfunded)
Defined Benefit obligation at beginning of the year 173.65 138.37 Current Service Cost 31.81 27.22 Interest Cost 13.29 11.80 Actuarial (gain)/loss 41.08 18.36 Past Service Cost - - Benefits Paid (34.07) (22.11) Defined Benefit obligation at the end of the year 225.76 173.65
45 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
II. Reconciliation of fair value of assets and obligations
Particulars 31 March 2016 31 March 2015 Gratuity (Unfunded) Fair value of plan assets at the end of the year - - Present value of obligation at the end of the year 225.76 173.65 Liability recognised in the Balance Sheet 225.76 173.65
III. Expense/(Income) recognised during the year
Particulars 31 March 2016 31 March 2015 Gratuity Current Service Cost 31.81 27.22 Interest Cost 13.29 11.80 Expected return on plan assets - - Actuarial (gain) / loss 41.08 18.36 Past Service Cost - - Expense/(Income) recognised during the Year 86.18 57.38
IV. Experience Adjustments
Particulars 31 March 31 March 31 March 31 March 31 March 2016 2015 2014 2013 2012
Defined Benefit Obligation 225.76 173.65 138.37 139.01 146.48 Plan Assets - - - - - Surplus / (Deficit) (225.76) (173.65) (138.37) (139.01) (146.48) Experience Adjustments on Plan Liabilities 40.99 15.34 7.61 (25.93) (34.51) Experience Adjustments on Plan Assets - - - - -
V. Actuarial assumptions
Particulars 31 March 2016 31 March 2015 Gratuity Leave Gratuity Leave (Unfunded) Encashment (Unfunded) Encashment (Unfunded) (Unfunded)
Mortality Table (Indian Assured Lives Mortality) 2006-08 2006-08 2006-08 2006-08 (Ultimate) (Ultimate) (Ultimate) (Ultimate) Discount rate (per annum) 7.35% 7.35% 7.95% 7.95% Expected rate of return on plan assets (per annum) - - - - Rate of escalation in salary (per annum) 7% 7% 7% 7%
The estimates for rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. The above information is certified by the actuary. 32 Disclosure of Segment Reporting under AS 17 As per Accounting Standard on Segment Reporting, Segment information has been provided in the notes to consolidated financial statements.
46 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) 33 Disclosure of Related Party under AS 18 Holding Company Reliance Land Private Limited (w.e.f. 20 March, 2015) Parties where control exists Subsidiary Companies and step down subsidiary companies Reliance Television Private Limited Cinestar Advertising Private Limited Big Magic Limited RBN US LLC Azalia Distribution Private Limited Reliance TV US LLC Georgeville Television LLC Azalia Broadcast Private Limited (formerly known as ‘BIG RTL Broadcast Private Limited’) (w.e.f. 12 June, 2014) GVTV DevCo LLC (w.e.f 02 October, 2014) Joint Venture of the Subsidiary Company Azalia Broadcast Private Limited (formerly known as ‘BIG RTL Broadcast Private Limited’) (upto 11 June, 2014) Other related parties with whom transactions have taken place during the year
Significant Shareholders, Key Management Personnel and their relatives
Relationship Name of the Related party Remarks Key Managerial Personnel Tarun Katial Chief Executive Officer Key Managerial Personnel Gururaja Rao Company Secretary and Manager (upto 21 July, 2014) Key Managerial Personnel Shikha Kapadia Company Secretary (w.e.f. 22 August, 2014) Key Managerial Personnel Asheesh Chatterjee Chief Financial Officer
Relative of Key Managerial Personnel: Spouse of Gururaja Rao Mrs. Akshata Rao (upto 21 July, 2014) Transactions with Related Parties Particulars 31 March 2016 31 March 2015 Subsidiary Company
Reliance Television Private Limited
Loan Given Opening Balance *2418.22 *2968.46 Given during the year 131.00 3,510.10 Received back during the year 2,549.21 4,060.34 Closing Balance - *2418.22 * Net of Provision of ` 6000.00 lakhs
Interest Income 121.80 689.50
Professional Fees Paid - 3.30 Reimbursement of Expenses Paid 1.45 0.59 Closing Balance Investment in equity shares (net of provision of ` 4,010.00 Lakhs (Previous year - - Provision ` 4,010.00 Lakhs) Interest receivable - 689.50 Sundry Creditors 0.15 0.90
47 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) Particulars 31 March 2016 31 March 2015 Cinestar Advertising Private Limited Loan given Opening Balance 7,355.30 3,560.30 Given during the year 2,376.50 4,015.00 Received back during the year 9,731.80 220.00 Closing Balance - 7,355.30
Interest Income 429.69 840.82 Reimbursement of Expenses Received - 15.73 Provision for diminution in the value of investment 1,336.26 1,336.26
Closing Balance Investment in equity shares (net of provision of ` 1,336.26 Lakhs (Previous year - - Provision ` 1336.26 Lakhs)) Interest receivable - 840.82 Other receivable - 17.68
Big Magic Limited
Loan Given Opening Balance 32,689.06 20,681.98 Given during the year 41,198.06 14,351.08 Received back during the year 12,206.05 2,344.00 Closing Balance 61,681.08 32,689.06
Sale of Airtime 2,217.69 2,739.36 Income from Television Programme Production - 890.71 Management Fees 903.63 613.49 Interest Income 6,230.34 4,530.13 Reimbursement of Expenses Received 309.32 48.27
Advertisement Expenses 90.76 18.02 Royalty Expense 7.09 - Reimbursement of Expenses Paid 3.12 4.62
Sale of Fixed Assets 301.35 -
Closing Balance Investment in equity shares 5.00 5.00 Sundry Debtors - 842.43 Interest receivable 10,760.47 4,530.13 RBN US LLC
Loan Given Opening Balance 790.52 759.06 Given during the year # 46.99 31.46 Received back during the year 107.85 - Closing Balance 729.66 790.52
Interest Income 181.78 185.35
Closing Balance Investment in equity shares 279.70 279.70 Interest receivable 98.43 384.90 #includes foreign exchange gain on revaluation ` 46.99 lakhs (previous year ` 31.46 lakhs)
48 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) Particulars 31 March 2016 31 March 2015 Step Down Subsidiary Company
Azalia Distribution Private Limited
Reimbursement of Expenses Received - 2.99
Azalia Broadcast Private Limited
Reimbursement of Expenses Received 0.02 98.26
Closing Balance Other receivables - 0.61 Key Managerial Personnel Remuneration to Tarun Katial 236.08 476.65 Remuneration to Asheesh Chatterjee 111.43 116.23 Remuneration to Gururaja Rao (upto 21 July, 2014) - 22.58 Remuneration to Shikha Kapadia (w.e.f. 22 August, 2014) 27.04 12.88 Receiving of Car Hire Services from Relative of Key Managerial Personnel Mrs. Akshata Rao (upto 21 July, 2014) - 0.55
34 Lease disclosure under AS 19 The Company has taken various office premises, towers and other licenses on cancelable operating lease, where the lease agreements are normally renewed on expiry. The company is obligated under non-cancellable leases primarily for equipments taken for out of home division, which are renewable thereafter as per the term of the respective agreements. The future minimum lease payments in respect of non-cancellable operating lease are as follows: Particulars Minimum Lease Payments 31 March 2016 31 March 2015
Amounts due within one year from the balance sheet date 305.39 375.76 Amounts due in the period between one year and five years 232.97 72.42 Amounts due after five years - -
538.36 448.18
The Lease rentals recognised in the statement of profit and loss is amounting to` 1,794.39 Lakhs (Previous year ` 2326.70 Lakhs).
35 Earnings Per Share (‘EPS’)
Particulars 31 March 2016 31 March 2015
Net profit/(loss) available for equity shareholders 4,459.75 5,054.68
Weighted average number of equity shares outstanding during the Year 7,94,51,170 7,94,51,170
Basic/ Diluted Earnings Per Share 5.61 6.36 Nominal value per share 5 5
49 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs)
36 Loans and advances in the nature of loans given to Subsidiaries
Loans and advances in the nature of loans:
Name of the Company Particulars 31 March 2016 31 March 2015 Maximum Balance during the year Reliance Television Private Limited Subsidiary *- *2418.22 *2473.22 Cinestar Advertising Private Limited Subsidiary - 7,355.30 9,460.30 Big Magic Limited Subsidiary 61,681.08 32,689.06 61,681.08 RBN US LLC Subsidiary 729.66 790.52 805.22 (a) Loans and advances shown above, to subsidiaries fall under the category of unsecured loans and advances, repayable after four years from the date of signing of the term sheet and supplemental term sheets i.e. 30 May, 2011, 1 October, 2012, 1 April, 2013, 1 January, 2014 ,1 October, 2014, 1 March, 2015 and 1 March 2016 respectively or the date of disbursement of loan whichever is later. (b) Loans to employees as per Company's policy are not considered. (c ) The above loans given to Companies are for "General Business Purpose". * - net of provision of ` 6,000.00 Lakhs made against doubtful loans and advances.
37 Expenditure in foreign currency
Particulars 31 March 2016 31 March 2015
Travelling 23.19 16.22 Repairs and Maintenance 150.95 139.80 Others 4.07 16.43 178.21 172.46
38 Foreign currency exposures (other than investments) not covered by forward contracts
Particulars 31 March 2016 31 March 2015 Currency Foreign Currency Amount - Currency Foreign Currency Amount - Amount Indian Rupees Amount Indian Rupees Loans and Other receivables USD 12.48 828.02 USD 18.78 1,175.42 Trade and other payables USD 0.38 25.17 USD 0.84 50.85 39 Termination of Joint Venture Agreement with Co-venturer The Company had investments in equity and loans and advances into its wholly owned subsidiary Cinestar Advertising Private Limited (‘CAPL’). CAPL has further investments in a step down entity viz. Azalia Broadcast Private Limited (‘Azalia Broadcast’) (formerly known as ‘Big RTL Broadcast Private Limited’), which was earlier a Joint Venture entity. During the previous Year, the joint venture agreement was mutually terminated and Big Magic Limited (‘BML’) (a wholly owned subsidiary of the Company) acquired the remaining 50% stake of the co-venturer on 12 June, 2014. Consequent upon this acquisition Azalia Broadcast became a wholly owned subsidiary of the Company on and from the said date. 40 Details of loans given, Invetsment made and guarantees given covered under section 186(4) of The Companies Act, 2013. Name of the Company 31 March 2016 31 March 2015 Purpose Reliance Television Private Limited - 2,418.22 Refer note (a) Cinestar Advertising Private Limited - 7,355.30 Refer note (a) Big Magic Limited 61,681.08 32,689.06 Refer note (a) RBN US LLC 729.66 790.52 Refer note (a) Reliance Big Entertainment Pvt Ltd 6,000.00 5,000.00 Refer note (a) Business Broadcast News Holding Ltd 2,300.00 - Refer note (a)
50 Reliance Broadcast Network Limited
Notes to the financial statements for the year ended 31 March 2016
(` in Lakhs) a) The above loans given to Companies are for “General Business Purpose”. Refer note 33 & 36 for the loans given during the year to subsidiary companies. b) Refer note 13 for Investment made in subsidiary companies 41 The Company has Equity investments, debtors, loans and advances including interest accrued on loans aggregating to ` 72,252.55 Lakhs as on 31 March, 2016 in Big Magic Limited, wholly owned major subsidiary of the Company. This subsidiary continues to incur losses and show negative net worth as on 31 March, 2016. An external valuation report obtained by the management covers the carrying value of such equity investments, debtors, loans and advances including interest accrued on loans and having regard to financial support from the promoter of the company to the above subsidiary, no provision for diminution/ recoverability is considered necessary by the Company. The valuation as aforesaid is dependent on the achievement of the projections as regards operating performance by this subsidiary. 42 The Company’s net worth is positive but substantially eroded, however having regard to financial support from one of its promoters, the financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. 43 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification /disclosure.
As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
51 Reliance Broadcast Network Limited
Independent Auditors’ Report on Consolidated financial statements
TO, THE MEMBERS OF RELIANCE BROADCAST NETWORK LIMITED Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of RELIANCE BROADCAST NETWORK LIMITED (“the Company”) and its subsidiary (the Company and its subsidiaries constitute “the Group”), which comprises the consolidated Balance Sheet as at 31st March, 2016, the consolidated Statement of Profit and Loss, and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”). Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the Companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of the appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Company, as aforesaid. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the Consolidated financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtain by us and the audit evidence obtained by the other auditor in terms of their reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2016, and their consolidated loss and their consolidated cash flows for the year ended on that date. Emphasis of Matters We draw attention to following notes to the financial statements: a) Note no. 29 which describes the uncertainty about the realisability of certain advances which are outstanding for a long period, as the matter is into litigations/ arbitrations. Pending outcome of such litigations/ arbitrations, the Company has not made any provision/ adjustment for said advances in the accounts. b) Note no. 40 the Group’s net worth is fully eroded, indicating the existence of uncertainty that may cast doubt about the Company’s ability to continue as a going concern. The Company continues to get financial support from the promoter, this consolidated financial statements are prepared on a going concern basis. Our opinion is not qualified in respect of this matter.
52 Reliance Broadcast Network Limited
Independent Auditors’ Report on Consolidated financial statements
Other Matter a) The financial statements of a subsidiary for the year ended 31st March, 2016 have been audited by us. The consolidated financial statements include total assets of` 13,624.60 lakh as at 31st March, 2016, total revenues of ` 6,264.14 lakh and net cash inflows aggregating ` 118.97 lakh for the year ended on that date in respect of the aforementioned subsidiary. b) We did not audit the financial statements and other financial information of five subsidiaries. The consolidated financial statements includes total assets of ` 4,426.40 lakh as on 31st March, 2016 and total Revenue of ` 2,052.18 lakh and net cash outflows aggregating to ` 127.04 lakh for the year ended on that date in respect of aforementioned subsidiaries. These financial statements and related other financial information have been audited by other auditors and where applicable, their conversion based on accounting principles generally accepted in India have been reported upon by other accountants whose report have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of the other auditors/ accountants. Our report is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, we report to the extent applicable. that: a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditor. c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 e) The matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Group. f) On the basis of the written representations received from the directors of the Company as on 31st March, 2016 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of the subsidiary Company incorporated in India, none of the directors of the Group Companies incorporated in India is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act. g) With respect to the adequacy of the internal financial controls over financial reporting of the Group and the operating effectiveness of such controls, refer to our separate Report in “Annexure”. h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) rule, 2014 in our opinion and to the best of our information and according to the explanations given to us: i. The Group has disclosed the impact of pending litigations on the consolidated financial position of the Group in its consolidated financial statements as referred to in Note 29 to the consolidated financial statements. ii. The Group did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. iii. There were no amounts which were required to be transferred to the Investor Education and Protection fund by the Group.
For Chaturvedi & Shah Chartered Accountants Firm Registration No. 101720W
Parag D. Mehta Partner Membership No. 113904
Place: Mumbai Date: 24th August, 2016
53 Reliance Broadcast Network Limited
Annexure to Independent Auditors’ Report on the Consolidated financial statements
Referred to in paragraph 1(g) under ‘Report on Other Legal and Regulatory Requirements’ section of our Report of even date Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting of RELIANCE BROADCAST NETWORK LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiary companies, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on “internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI)”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI and the Standards on Auditing deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
54 Reliance Broadcast Network Limited
Annexure to Independent Auditors’ Report on the Consolidated financial statements projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to four subsidiary company, which are companies incorporated in India, is based on the corresponding reports of the auditors of such companies incorporated in India. Our opinion is not qualified in respect of this matter.
For Chaturvedi & Shah Chartered Accountants Firm Registration No. 101720W
Parag D. Mehta Partner Membership No. 113904
Place: Mumbai Date: 24th August, 2016
55 Reliance Broadcast Network Limited
Consolidated Balance Sheet as at 31 March 2016
(` in lakhs) Particulars Notes As At As At 31 March 2016 31 March 2015 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 2 3,972.56 3,972.56 Share Application Money - - Reserves and Surplus 3 (62,834.17) (36,887.25) (58,861.60) (32,914.69) Non-Current Liabilities Long-term borrowings 4 99,375.00 39,153.68 Deferred tax liabilities (net) 5 - Other Long term liabilities 6 184.09 217.74 Long-term provisions 7 929.80 5,132.94 1,01,672.16 44,504.36 Current Liabilities Short-term borrowings 8 10,799.38 8,121.42 Trade payables 9 6,793.92 3,658.03 Other current liabilities 10 32,858.28 34,112.87 Short-term provisions 11 158.71 86.75 50,610.29 45,979.07 Total 92,237.57 57,568.74
ASSETS Non-current assets Fixed assets Tangible assets 12 4,138.76 4,597.06 Intangible assets 12 25,311.38 3,297.78 Capital work-in-progress 12,500.95 -
Goodwill on consolidation 1,173.03 1,173.03
Non-current investments 13 3,000.00 3,000.00 Long term loans and advances 14 13,078.82 9,926.97 Other non-current assets 15 1,171.40 30.92 60,374.34 22,025.76 Current assets Current investments - - Inventories 16 3,575.58 5,973.82 Trade receivables 17 9,796.62 9,655.61 Cash and bank balances 18 4,139.42 3,171.67 Short-term loans and advances 19 14,195.53 16,641.26 Other current assets 20 156.08 100.62 31,863.23 35,542.98 Total 92,237.57 57,568.74
The accompanying notes are an integral part of the Financials Statements. 1 to 42
As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
56 Reliance Broadcast Network Limited
Statement of Consolidated Profit and Loss for the year ended on 31 March 2016
(` in lakhs) Particulars Notes For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Income I. Revenue from operations 21 38,801.55 29,505.19 II. Other Income 22 2,203.96 610.41
III. Total Revenue (I+II) 41,005.51 30,115.60
IV. Expenses i. Direct Expenses 23 20,512.71 13,900.24 ii. Employee benefit expense 24 8,429.01 7,586.06 iv. Finance costs 25 11,930.01 4,748.94 iii. Depreciation, amortization and impairment expense 26 2,881.59 4,302.49 v. Other expenses 27 21,860.33 14,033.95
V. Total Expenses 65,613.65 44,571.68
(Loss) before tax (24,608.14) (14,456.08)
VI. Tax expense Current tax 2.09 11.07 (Excess) provision for tax relating to prior years - (0.06)
(Loss) for the year (24,610.23) (14,467.15)
Earning per equity share [Nominal Value of Share ` 5] Basic (In `) 34 (30.98) (18.21) Diluted (In `) 34 (30.98) (18.21)
The accompanying notes are an integral part of the Financials Statements. 1 to 42
As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
57 Reliance Broadcast Network Limited
Consolidated Cash Flow Statement for the year ended 31 March 2016
(` in lakhs) For The Year Ended For The Year Ended 31 March 2016 31 March 2015 CASH FLOW FROM OPERATING ACTIVITIES Net profit / (loss) before taxes (24,608.14) (14,456.08) Adjustments for: Interest Income (1,416.68) (433.80) Interest Expense 11,930.01 4,748.94 Depreciation, amortisation and impairment 2,881.59 4,302.49 Provision for Doubtful debts 120.91 947.07 Bad Debts 934.51 19.00 Advances/ Deposits Written Off 625.25 84.08 Provision for Doubtful Deposits/Advances 1,035.72 728.80 Provision for Obsolete Stock - 29.19 Foreign Exchange Loss (net) 107.96 (17.67) Profit on sale of current investments (601.11) - Excess Accruals Written Back 555.05 247.73 Sundry Credit Balance Written Back 423.51 48.95 (Profit) / Loss on sale/ disposal of fixed assets (net) 85.46 4.96 Operating profit/ (loss) before working capital changes (7,925.96) (3,746.34) (Increase)/ Decrease in Inventories 2,398.24 (2,289.60) (Increase)/ Decrease in Loans and Advances (2,362.96) (4,593.65) (Increase)/ Decrease in Debtors (1,196.43) (2,625.92) Increase/(Decrease) in Current Liabilities and Provisions 7,391.54 1,349.70 Cash generated from operations (1,695.57) (11,905.81) Taxes Paid 60.04 700.69 Net cash generated from / (used in) operating activities (A) (1,635.53) (11,205.12) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (37,423.27) (227.76) Sale Proceeds from Fixed Assets 399.97 - Purchase of Current Investments (55,575.68) (3,415.17) Sale of Current Investments 56,176.79 - Fixed deposits with Bank (2,227.42) (315.97) Interest Income 1,364.02 446.99 Net cash generated from / (used in)investing activities (B) (37,285.59) (3,511.91) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase/(Decrease) in Short Term Borrowings 2,677.96 2,064.47 Proceeds from Long Term Borrowings 20,000.00 26,500.00 Repayment of Long Term Borrowings (2,496.61) (551.47) Proceeds from Issue of Debentures (net of Debenture Issue Expenses) 60,000.00 - Redemption of debentures (20,000.00) (10,000.00) Premium on redemption of debentures (5,640.36) - Interest Paid (15,738.60) (2,760.43) Net cash generated from / (used in) financing activities (C) 38,802.39 15,252.57 Net increase/(decrease) in cash and cash equivalents (A + B + C) (118.73) 535.54 Cash and cash equivalents at beginning of the year 2,669.34 1,923.49 Cash and cash equivalents received on acquisition of stake in subsidiary - 220.53 Cash and cash equivalents transferred on de-merger (Refer Note 41) - (10.22) Cash and cash equivalents at end of the year 2,550.62 2,669.34 Note: Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure. As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
58 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 1. Summary of significant accounting policies i Basis of preparation These consolidated financial statements are prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention. These consolidated financial statements relate to Reliance Broadcast Network Ltd. (‘the Company / Parent Company’), its subsidiary companies, associates and joint ventures. The Company along with its subsidiaries, associates and joint ventures constitute ‘the Group’. The financial statements of the subsidiaries, associates and joint ventures used in the consolidation are for the same reporting period as the Company i.e. year ended 31 March, 2016. ii Principles of consolidation The consolidated financial statements are prepared in accordance with AS 21 - ‘Consolidated Financial Statements’, AS 23 - ’Accounting for Investments in Associates in Consolidated Financial Statements’ and AS 27 - ‘Financial Reporting of” Interest in Joint Ventures’. The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as a Parent company’s separate financial statements. The consolidated financial statements have been consolidated on the following basis: Subsidiaries The excess of cost to the Group of its investment in subsidiaries over its portion of equity in the subsidiaries at the respective dates on which investments in such subsidiaries was made is recognised in the financial statements as goodwill and any excess of assets over the investment of the Group in a subsidiary is transferred to Capital Reserve. The Group’s portion of equity in the subsidiaries is determined on the basis of the book value of assets and liabilities as per the financial statements of the subsidiaries as on the date of the investment. The financial statements of the Parent company and its subsidiaries have been consolidated on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra group balances and intra group transactions and unrealised profits / losses. The amounts shown in respect of reserves/accumulated losses comprise the reserve/accumulated losses as per the balance sheet of the Parent Company and its share in the post- acquisition increase/decrease in the relevant reserve/accumulated losses of the subsidiaries. The amount of Goodwill and Capital Reserve are presented on a net basis for each subsidiary. Associates Where the Company directly or indirectly through subsidiaries holds 20% or more of equity shares, investments in associates are accounted for using equity method in accordance with Accounting Standard (“AS”) 23 “Accounting for Investments in Associates in Consolidated Financial Statements” as referred to in the Accounting Standard Rules. The Company accounts for its share in the change in the net assets of the associates, post acquisition, after eliminating unrealised profits and losses resulting from transactions between the Company and its associates to the extent of its share, through its Statement of Profit and Loss, to the extent such change is attributable to the associates’ Statement of Profit and Loss, based on available information. The difference between the cost of investment in the associates and the share of net assets, at the time of acquisition of shares in the associates, is identified in the financial statements as Goodwill or Capital Reserve, as the case may be. Joint venture entities Interest in joint venture is accounted by using the proportionate consolidated method. The list of subsidiaries considered in these consolidated financial statements with percentage holding is summarized below: Name of Subsidiary Country of Incorporation Ownership Interest Ownership Interest 31 March 2016 31 March 2015 Reliance Television Private Limited India 100% 100% Cinestar Advertising Private Limited India 100% 100% BIG Magic Limited India 100% 100% RBN US LLC United States of America 100% 100%
The list of step-down subsidiaries considered in these financial statements with percentage shareholding is summarised below:
59 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) Name of Step-down Subsidiary Country of Incorporation Ownership Interest Ownership Interest 31 March 2016 31 March 2015 Azalia Distribution Private Limited India 100% 100% Azalia Broadcast Private Limited* India 100% 100% Reliance TV US LLC United States of America 65% 65% Georgeville Television LLC United States of America 81% 81% GVTV DevCo LLC (w.e.f. 2 October, 2014) United States of America 100% 100% *Pursuant to the termination of Joint Venture Agreement and Share Sale & Settlement Agreement entered in to between RTL Group SA, RTL Group Beheer BV, Reliance Television Private Ltd, Cinestar Advertising Private Limited, BIG RTL Broadcast Private Limited, Reliance Broadcast Network Limited, BIG Magic Limited, and Fremantle Media Limited, BIG Magic Limited acquired 50% stake of Azalia Broadcast Private Limited from RTL Group Beheer BV w.e.f. 12th June, 2014. As a result, Azalia Broadcast Private Limited had become the wholly owned subsidiary of Reliance Broadcast Network Limited.
The list of joint venture entities of subsidiary companies considered in these financial statements with percentage shareholding is summarised below:
Name of Joint Venture Country of Incorporation Ownership Interest Ownership Interest 31 March 2016 31 March 2015 Azalia Broadcast Private Limited* India Nil Nil *Ceased to be Joint Venture w.e.f. 12 June, 2014 Additional information, as required under Schedule III to the Companies Act, 2013, of entities consolidated as subsidiary / Joint ventures :
Net Assets Share in profit or loss (total assets - total liabilities) As % of Amount As % of Amount consolidated net consolidated profit assets or loss Parent Reliance Broadcast Network Limited (0.13) 7,818.85 (0.18) 4,459.75 Subsidiaries Indian 1. Big Magic Limited 1.02 (60,215.50) 1.28 (31,572.07) 2. Reliance Television Private Limited 0.17 (9,901.08) 0.02 (455.43) 3. Cinestar Advertising Private Limited 0.11 (6,371.38) 0.06 (1,497.64) 4. Azalia Broadcast Private Limited 0.00 (269.45) 0.03 (633.06) Foreign 1. RBN US LLC 0.06 (3,820.89) 0.10 (2,518.12) Eliminations (0.24) 13,895.85 (0.31) 7,606.34 TOTAL 1.00 (58,863.61) 1.00 (24,610.23) iii Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles (‘GAAP’) in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. iv Goodwill on Consolidation The excess of cost to the Parent company of its investments over its portion of equity in the subsidiaries/joint venture, as at the date on which the investment was made, is recognized as goodwill in the consolidated financial statements. The Parent Company’s portion of equity in the subsidiaries/joint venture is determined on the basis of the book value of assets and liabilities as per the financial statements of the subsidiaries as on the date of investment. Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Group assesses the recoverability of goodwill by reference to the valuation methodology adopted by it on the acquisition date, which include strategic and synergic factors that were expected to enhance the enterprise value. Accordingly, the Group would consider that there exists a decline other than temporary in the carrying value of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the underlying acquisitions it has made deteriorates with adverse market conditions.
60 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) v Fixed assets and depreciation/ amortisation a. Tangible assets Tangible fixed assets are stated at cost less accumulated depreciation and any provision for impairment. Cost includes freight, duties, taxes (other than those recoverable from tax authorities) and other expenses related directly/indirectly to the acquisition/ construction and installation of the fixed assets for bringing the asset to its working condition for its intended use. Depreciation on fixed assets is provided on the straight line method over the usefull life of assets as prescribed in Schedule II of the The Companies Act, 2013. Leasehold improvements are depreciated over the lower of the useful life of the asset and the lease term, on a straight line basis. Bus Queue Shelters under BOT Schemes are depreciated over the useful life being the contract period on uniform basis. Individual assets costing up to ` 0.05 lakh are depreciated fully in the year of acquisition. b. Intangible assets Intangible assets, all of which have been acquired and are controlled through custody or legal rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and 10 years. Application software purchased, which is not an integral part of the related hardware, is shown as intangible assets and amortised on a straight line basis over its useful life, not exceeding ten years, as determined by management. One Time Entry Fees paid for acquiring FM radio broadcasting licenses has been capitalised as an asset and is amortised over a period of ten years, being the period of the license, from the date of operationalisation of the station. Purchased goodwill is recognised on the basis of excess of purchase consideration paid over the value of the assets acquired at the time of acquisition and is amortised over its estimated useful life not exceeding five years. vi Impairment In accordance with AS 28 – ‘Impairment of Assets’, where there is an indication of impairment of the Company’s assets, the carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss. Value in use is present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. vii Investments Investments are classified as long term or current based on intention of the management at the time of purchase. Current investments are valued, scrip wise, at cost or fair value, whichever is lower. Long-term investments are carried at carrying cost less diminution in value which is other than temporary, determined separately for each individual investment. viii Inventories Inventories comprise of Events, contents, television programs (purchased or produced in house), music, movies and merchandise. Inventories are stated at lower of cost or net realisable value. Where the realizable value on the basis of its estimated useful economic life is less than its carrying amount, the difference is charged to statement of profit and loss. Cost of Event / Content which does not create any rights are charged to the statement of profit and loss on exploitation. Event / Content cost covers the cost of acquisition/ execution of the award, function / concerts, cost of content sports events, video albums etc. Television programs under production are stated at cost. Cost of television programs comprises of material, cost of services and other expenses incurred upto the date of Balance sheet. Pilot episodes are stated at cost. Pilots are written off after the end of one year from the year of production of respective pilot in case the same is not developed into a serial. Amortisation Policy: A) Event / Content Cost In case rights are available in perpetuity Costs of Annual Award/Concerts are amortised at 80% in the year of event execution and 20% in the subsequent year. Costs of Film produced are amortised at 80% in the year of theartrical release and 20% in the subsequent year. Costs of Other Content are amortised at 60% in the year of commercial exploitation and 40% over the subsequent two years equally.
61 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) B) Television Programs (purchased or produced in house), music, movies and merchandise a) Cost of television programs, music and movies are amortised over the licensed period where the number of runs are unlimited. Where the runs are limited, the cost is amortised over the licensed period or on run basis whichever is maximum on the value of content burnt. b) Cost of Programs acquired or produced for multiple channels are allocated based on management estimate of the revenue potential of the said program on respective channels. Cost of television Programs acquired or produced in house, content being with the Company for perpetuity are amortized over three financial years from the date of telecast as per management estimates of future revenue potential. Program amortization commences from the date of telecast of the said program on the respective channel or within twelve months from the date of acquisition or production whichever is earlier. The Company evaluates the realisable value and/ or revenue potential of inventory on an annual basis and appropriate written down is made in cases where accelerated written down is warranted. c) Cost of news, events and current affairs programs are amortized in the year of telecast. d) Merchandise is charged off to the statement of profit and loss as and when the gifts are distributed to the winners. ix Share / Debenture Issue Expenses Share / debenture issue expenses are adjusted against securities premium account. x Miscellaneous expenditure and preoperative/preliminary expenses Expense relating to incorporation of the company and preoperative/preliminary expenses are charged off to the statement of profit and loss in the year in which such expenses are incurred. xi Employee benefits Short-term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered. The Company’s contribution to provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss as incurred. Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation carried out by an independent actuary at the balance sheet date using Projected Unit Credit Method. xii Employee Stock Option Scheme (“ESOS”) The Employees Stock Option Scheme (“the Scheme”) provides for grant of equity shares of the Company to Directors (including whole time) and employees of the Company and its subsidiaries. The Scheme provides that employees are granted an option to acquire equity shares of the Company that vests in a graded manner. The options may be exercised within a specified period. The Company follows the intrinsic value method to account for its stock – based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date and is amortised over the vesting period of the option on a Straight Line Basis. The fair market price is the latest closing price, immediately prior to the date of the Board of Directors meeting in which the options are granted, on the stock exchange on which the shares of the Company are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered. xiii Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The amount recognised as revenue is net of trade discounts, service tax and agency commission. Revenue from sale of radio airtime Revenue from Radio broadcasting is recognised on an accrual basis on the airing of the customers commercials. Revenue from television media operations Advertisement revenue from broadcasting is recognised, when the related advertisement appears before public i.e. on telecast. Revenue from sale of telecast rights Revenue from sale of telecast rights of event and content is recognized on the date when the rights are made available to the assignee for exploitation. Revenue from television programmes Revenue from commissioned programs are recognised as and when the relevant episodes of the programs are delivered to the channels.
62 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) Out of Home Media Advertising space revenue, net of taxes, rebate and discount is recognised on the display of advertisements over the period of the contract. Revenue from Experiential Marketing Revenue from experiential marketing which includes event management and activations are recognised on the completion of the event and on the basis of related services performed, as per the contracted terms. Interactive Revenue Revenue from short code, short messaging service (‘SMS’) is recognised on acceptance of the hits by telecom operators. Management Fees Management fee is recognised as revenue on time proportion basis as per relevant agreements. Graphics and Editing Revenue Revenue from graphics and editing is recognized in accordance with the terms of the agreements with the parties. Syndication Revenue Sales are recognized when the rights to use are passed on to the customers, which is generally on dispatch of goods. Subscription Revenue Subscription revenues are recognized on an accrual basis in accordance with the terms of the contract on rendering of services. Interest income Interest income is recognised on a time proportion basis. xiv Barter Transactions Barter transactions are recognised at the fair value of consideration recievable or payable. When the fair value of the transactions cannnot be measured reliably, the revenue/expense is measured at the fair value of the goods / services provided / received adjusted by the amount of cash or cash equivalent transferred. xv License Fees As per the Frequency Module (FM) broadcasting policy, effective 1 April 2005 license fees were charged to revenue at the rate of 4% of gross revenue for the year or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever was higher. ROTEF means 25% of highest valid bid in the city. As per the Policy Guidelines on expansion of FM Radio Broadcasting Services through private agencies (Phase-III) and Grant of Permission Agreements signed by the Company, effective 1 April 2015, license fees are charged to revenue at the rate of 4% of gross revenue for the year or 2.5% of Non-refundable One Time Entry Fees (NOTEF) for the concerned city, whichever is higher. NOTEF means successful bid amount arrived at through an ascending e-auction process. Gross Revenue for this purpose shall mean revenue on the basis of billing rates without deduction of taxes and agency commission and net of discounts to advertisers. Barter advertising contracts shall also be included in the gross revenue on the basis of relevant billing rates. xvi Foreign currency transactions Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transactions Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss of the year. Monetary items are restated at the period ended rates. The exchange differences between the rate prevailing on the date of transaction and on settlement/restatement (other than those relating to acquisition of fixed assets) is recognised as income or expense, as the case may be. Non-monetary items which are carried at historical costs denominated in foreign currency are reported using the exchange rate at the date of the transaction. In respect of integral foreign operations of the company, fixed assets are translated at the rates on the date of acquisition, monetary assets and monetary liabilities are translated at the rate on the date of the balance sheet and income and expenditure are translated at the average of weekly average rates during the year. xvii Foreign currency translations The consolidated financial statements are reported in Indian Rupees in accordance with AS 11 – ‘The Effects of Changes in Foreign Exchange Rates’ which specifies translation of foreign subsidiaries on the basis of their classification as integral / non-integral to the operations of the Parent Company. The foreign subsidiary in the United States of America fall in the criteria of integral operations and the translation of the local currency financials of integral foreign subsidiary within the Group into Indian Rupees is performed in respect of assets and liabilities other than fixed assets, using the exchange rate in effect at the balance sheet date and for revenue and expense items other than the depreciation costs, using average exchange rate during the reporting period. Net exchange
63 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) difference resulting from the above translation of the financial statements of integral foreign subsidiary is recognised in the consolidated statement profit and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on fixed assets is translated at exchange rates used for translation of the underlying fixed assets. xviii Borrowing costs Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. xix Leases The Company has various operating leases, principally for radio stations, office space and equipments with various renewal options. Substantially all operating leases are cancellable as well as renewable on expiry of lease term. Rental expense in agreements with scheduled rent increases is recorded on a straight-line basis as applicable over the lease term. xx Earning Per Share In determining earning per share, the company considers the net result after tax and includes the post tax effect of any extraordinary / exceptional item. The number of shares used in computing basic earning per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earning per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares that could have been issued on the conversion of all dilutive potential equity shares unless the results would be anti-dilutive. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. xxi Taxation Tax expense comprises current tax expense computed in accordance with the relevant provisions of the Income Tax Act, 1961 and deferred tax charge or credit. Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions, in accordance with the Income Tax Act, 1961. Deferred tax charge or credit and the corresponding deferred tax liability or asset is recognised for timing differences between the profits/ losses offered for income taxes and profits/ losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down/up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. xxii Provisions and contingencies Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Company recognizes it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated. 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. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.
64 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
2. Share Capital As At As At 31 March 2016 31 March 2015 Authorised Shares 20,00,00,000 (Previous Year: 20,00,00,000) Equity Shares of ` 5/- each 10,000.00 10,000.00 10,00,00,000 (Previous Year: 10,00,00,000) Preference Shares of ` 5/- each 5,000.00 5,000.00
15,000.00 15,000.00
Issued, Subscribed and Paid Up 7,94,51,170 (Previous Year: 7,94,51,170) Equity Shares of ` 5/- each fully paid up 3,972.56 3,972.56
Total issued, subscribed and paid-up share capital 3,972.56 3,972.56
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting year Equity Shares As At 31 March 2016 As At 31 March 2015 No. of Shares ` No. of Shares ` At the beginning of the year 7,94,51,170 3,972.56 7,94,51,170 3,972.56 Issued during the year - - - - Outstanding at the end of the year 7,94,51,170 3,972.56 7,94,51,170 3,972.56 b. Terms/rights attached to equity shares The company has only one class of equity shares having a par value of ` 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends if any, in Indian rupees. The dividend proposed if any, by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. c. Details of shareholders holding more than 5% shares of the company As At 31 March 2016 As At 31 March 2015 No of Percentage No of Percentage Shares of holding Shares of holding Equity shares of ` 5 each fully paid Reliance Land Private Limited 5,85,11,438 73.64 5,83,53,993 73.44 Reliance Capital Limited 1,57,27,957 19.80 1,57,27,957 19.80 Reliance Share & Stock Brokers Private Limited - - - - 3. Reserve & Surplus As At As At 31 March 2016 31 March 2015 Capital Reserve Balance as per last balance sheet 3,497.24 3,497.24
Securities Premium Account Balance as per last balance sheet 31,063.09 33,363.87 Add: Premium on issue of shares - - Less: Debenture Issue Expenses - - Less: Premium Payable on Redemption of Debentures 1,336.69 2,300.78 29,726.40 31,063.09
65 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
As At As At 31 March 2016 31 March 2015 Capital Reserve on Consolidation Balance as per last balance sheet - 993.48 Add: On acquisition of a subsidiary company Less: Adjustment on demerger of digital marketing undertaking (Refer Note 41) - (993.48) - - Debenture Redemption Reserve As per last balance sheet 5,000.00 - Add : Transferred from statement of profit & loss 2,751.53 5,000.00 7,751.53 5,000.00
(Deficit) in the statement of Profit & Loss As per last balance sheet (76,447.58) (55,755.06) Add: Impact of Change in Useful life of Assets (As per Schedule II of the Companies - (127.25) Act, 2013) Less: Adjustments on demerger of Digital Marketing Undertaking (Refer note 41) - (1,098.18) Add: Loss for the year (24,610.23) (14,467.09) Less : Appropriations out of current year profit Transferred to Debenture Redemption Reserve 2,751.53 5,000.00 (1,03,809.34) (76,447.58)
Total Reserve & Surplus (62,834.17) (36,887.25)
4. Long Term Borrowings As At 31 March 2016 As At 31 March 2015 Current Non-current Current Non-current Secured Loans from body corporates (Refer note a ) - - 150.29 - Non-Convertible Debentures (Refer note - 60,000.00 5,000.00 - b,c,d,e,f) Loan from Banks (refer note g, h & i) 2,125.00 39,375.00 - 21,500.00 2,125.00 99,375.00 5,150.29 21,500.00
As At 31 March 2016 As At 31 March 2015 Unsecured Current Non-current Current Non-current Loans from body corporates (refer note j) 2,653.68 - 2,346.32 2,653.68 Zero Coupon Debentures (Refer note k) - - 15,000.00 - Loan from Bank (Refer note l) 15,000.00 - - 15,000.00 17,653.68 - 17,346.32 17,653.68
Total 19,778.68 99,375.00 22,496.61 39,153.68 a. Loan from body corporates of ` Nil (Previous Year: ` 150.29 Lakhs) carries interest rate of IRR 14%. The term of repayment is on 12 quarterly equated installment basis from the date of disbursement of loan i.e. 1 April, 2012. The loan was secured by second charge on present and future fixed assets of the Company which were subordinate to the existing first pari-passu charge created by the company. b. The Company had issued 11.50% 1,500 Secured Redeemable Non Convertible Debentures (Debentures) amounting ` Nil (Previous year ` 15,000.00 Lakhs), having face value of ` 10.00 Lakhs each on a private placement basis on 28 September, 2012. The said Debentures are listed on National Stock Exchange (NSE) w.e.f. 01 November, 2012 which were subsequently delisted w.e.f. 07 November, 2014. The said debentures were secured by first pari passu charge by way of hypothecation of all assets of the Company with a minimum asset cover of 1.25 times to be maintained at all times till the maturity of debentures. The debentures are redeemable in three equal installments at the end of 24 months, 30 months and 36 months (i.e. 28 September, 2014, 28 March, 2015, 28 September 2015). All the debentures have been redeemed as on date.
66 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) c. The Company has issued 9.5% 1,500 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 15,000.00 lakh, having face value of ` 10.00 lakh each on a private placement basis on 13th May 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with unconditional and irrevocable mandatory PUT in favor of the debenture trustee on behalf of debenture holder for timely repayment of all amounts, from one of the promoter of the Company. The debentures are redeemable in three equal installments at the end of 3 years and 1 day, 4 years and 5 years from date of allotment. d. The Company has issued 9.5% 2,000 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 20,000.00 lakh, having face value of ` 10.00 lakh each on a private placement basis on 20th July 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with unconditional and irrevocable mandatory PUT in favor of the debenture trustee on behalf of debenture holder for timely repayment of all amounts, from one of the promoter of the Company. The debentures are redeemable in three equal installments at the end of 3 years, 4 years and 5 years from date of allotment. e. The Company has issued 9.5% 1,500 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 15,000.00 lakh, having face value of ` 10.00 lakh each on a private placement basis on 6th August 2015. The said debentures are secured by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon and redemption premium thereon along with an undertaking from one of the promoter of the Company that any shortfall in maintainance of the DSRA for the facility shall be maintained by that promoter. The obligation of the promoter shall be at maximum limited to the DSRA support undertaking amount. The debentures are redeemable in three equal installments at the end of 2 years 10 months 22 days, 4 years and 5 years from date of allotment. f. The Company has issued 11.6% 1,000 Unlisted Secured Rated Redeemable Non Convertible Debentures (Debentures) amounting ` 10,000.00 lakh, having face value of ` 10.00 lakh each on a private placement basis on 8th October 2015. The said debentures are secured inter alia by a first pari passu charge by way of hypothecation over i) all movable properties and fixed assets of the Company, both present and future and ii) all current assets (including loans and advances) and non current assets of the company both present and future, which assets and properties are of a value sufficient to provide a minimum asset cover of 1x time the principle amount of the Debentures under all series and applicable coupon thereon along with an undertaking from one of the promoter of the Company that any shortfall in maintainance of the DSRA for the facility shall be maintained by that promoter. The Obligation of the promoter shall be at maximum limited to the DSRA support undertaking amount. The debentures are redeemable in three equal installments at the end of 3 years, 4 years and 5 years from date of allotment. g. Loan from bank of ` 8,500.00 Lakhs (Previous Year: ` 8,500.00 Lakhs) carries interest rate of YBL Base Rate + 100 bps. The loan is for a tenure of 4 years from the date of first disbursement i.e. 29 September, 2014 with a moratorium of 2 years and repayment in 4 half yearly equated installment thereafter. The loan is secured by first Pari-Passu charge on all the non-current assets assets (including loans and advances) of the company and on all revenues, cash-flows, bank accounts of the company and whole of movable fixed aseets alongwith unconditional and irrevocable (excluding investments) and current corporate guarantee from one of the promoter of the Company. h. Loan from bank of Rs. 10,000.00 lakh (Previous Year: Rs. Rs 10,000.00 lakh) carries interest rate of Indusind Bank Base Rate, payable monthly. The loan is for a tenure of 5 years from the date of first disbursment with a moratorium of 2 years. Loan is repayable in 3 equal installments at the end of 3rd, 4th and 5th year from the date of first disbursement i.e 16 February, 2015. The loan is secured by first Pari-Passu charge on entire non-current assets and current assets of the company and on first Pari-Passu charge on all movable fixed assets of the company along with an undertaking from one of the promoter of the Compay that any shortfall in maintainance of the DSRA for the facility shall be maintained by that promoter. i. Loan from bank of ` 23,000.00 Lakhs (Previous Year: ` 3,000.00 Lakhs) carries interest rate of Indusind Bank Base Rate payable monthly. The loan is for a tenure of 5 years from the date of each disbursment with a moratorium of 2 years and repayable in 11 quarterly equal installment starting from the end of 30th month from the date of disbursement i.e 31 March, 2015. The loan is secured by first Pari-Passu charge on entire non-current assets and current assets of the company and on first Pari-Passu charge on all movable fixed aseets of the company. j. Loan from body corporates of ` 2,653.68 lakh (Previous Year: ` 5,000 lakh) carries interest rate of IRR 12.5%. The terms of repayment is on 8 quarterly equated installment basis from the date of disbursement of loan i.e. 10 March, 2015. k. The Company had issued 1,500 Zero Coupon unsecured redeemable non convertible Debentures amounting to ` Nil Lakhs (Previous Year: ` 15,000.00 Lakhs), having face value of ` 10 lakh each on a private placement basis. These Debentures are redeemable on 8th August, 2015 i.e. 1095 days from the date of issue i.e. 9 August, 2012 and has an implicit yield of 12.60% in form of redemption premium. As on date all the debentures are redemeed. l. Loan from Bank of ` 15,000.00 Lakhs (Previous Year: 15,000.00 Lakhs) carries interest rate of 11.5% payable monthly. The terms of repayment is repayment in full after 36 months from the drawdown date i.e 28 March, 2014 except in case of
67 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) the exercise of the Call /Put Option by either party providing 7 (Seven) days written notice to other party on option date, to repay all outstanding due (Option date is the date occurring on the expiry of 18 (Eighteen) months from the drawdown date. Unconditional and irrevocable corporate guarantee is given by one of the shareholders of the Company.
5. Deferred Tax Liability (net)
Particulars As At As At 31 March 2016 31 March 2015 Deferred Tax Liability Related to Fixed Assets 1,023.02 -
Deferred Tax Asset Other disallowances under Income Tax Act, 1961 1,000.88 - Carry forward business loss / unabsorbed depreciation 22.15 -
Net deferred tax liability at the end of the year - -
Note: In the absence of virtual certainty, deferred tax assets has been recognised to the extent it can be realised against reversal of deferred tax liability on account of depreciation.
6. Other Long Term Liabilities As At As At 31 March 2016 31 March 2015 Lease Rent Liability 144.33 163.90 Security Deposits 39.76 53.84 184.09 217.74
7. Long Term Provisions As At As At 31 March 2016 31 March 2015 Provision for employee benefits (refer note 31) -Gratuity 162.67 120.79 -Leave benefits 8.58 7.30 -Deferred Compensation 57.37 - Premium payable on Redemption of Debentures 701.18 5,004.85 929.80 5,132.94 8. Short Term Borrowings As At As At 31 March 2016 31 March 2015 Loans repayable on demand (secured) From Banks (refer note a) 3,970.38 3,788.90 From Body corporates (refer note b,c,d,e) 4,029.00 2,950.00
Other loans & advances (Unsecured) From Banks (refer note f) - 882.52 From Body corporates (refer note g,h,i) 2,800.00 500.00 10,799.38 8,121.42 Nature of security and other terms:
68 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) a. Loan from bank ` 3,970.37 Lakhs (Previous year: ` 3788.90 Lakhs) is secured by first pari passu charge on, the entire current assets of the Company, existing and future, comprising, inter alia, stocks of raw material, work in progress, finished goods and other current assets, the entire book debts and receivables of the Company existing and future, the entire movable fixed assets of the Company, existing and future including without limitation movable plant and machinery etc along with an unconditional and irrevocable corporate guarantee from one of the promoter of the Company. It is repayable on demand bearing interest rate at Bank’s base rate + 175 bps p.a. b Secured Loan from body corporates ` 3,000 (Previous Year: ` NIL) is carrying interest at the rate of 15.5% and is repayable after a term of One year from the date of disbursement i.e. on 4th February, 2016. The Loan is secured by residual charge on all current assets. c. Secured Loan from body corporates ` 1,029.00 (Previous Year: ` NIL) is carrying interest at the rate of 15.5% and is repayable after a term of One year from the date of disbursement i.e. on 30th March 2016. The Loan is secured by residual charge on all current assets. d Secured Loan from body corporates ` NIL (Previous Year: ` 1,450 Lakhs) was carrying interest at the rate of 14% and was repayable after a term of One year from the date of disbursement. The Loan was secured by residual charge on all current assets. The loan was repaid on 16 September, 2015. e. Secured Loan from body corporates ` NIL (Previous Year: ` 1,500 Lakhs) was carrying interest at the rates 14% and was repayable on 31 March 2015 The Loan was secured by residual charge on all current assets. The loan was repaid on 14 May, 2015. f. Unsecured loan from Bank ` NIL (Previous year: ` 882.52 lakh) was repayable within the due date of the monthly billing cycle or repayable on demand. g. Unsecured loan from body corporates ` 500.00 lakh (Previous Year: ` NIL) is carrying interest at the rate of 13% and repayable after a term of one year from the date of disbursement i.e. 29th February, 2016. h. Unsecured loan from body corporates ` 2,300.00 lakh (Previous Year: ` NIL) is carrying interest at the rate of 11.5% and repayable after a term of one year from the date of disbursement i.e. 30th December, 2015. i. Unsecured loan from body corporates ` NIL (Previous Year: ` 500.00 lakh) is carrying interest at the rate of 13% and repayable after a term of one year from the date of disbursement. The loan was repaid on 25th February, 2016.
9. Trade Payables As At As At 31 March 2016 31 March 2015 Micro, Small and Medium Enterprises (Refer Note 9.1) - - Others 6,793.92 3,658.03 6,793.92 3,658.03
9.1 Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimation received from suppliers regarding their status and the required disclosure are given below:
Particulars As At As At 31 March 2016 31 March 2015 Principal amount remaining unpaid - - Interest due thereon - - Interest paid by the company in terms of Section 16 of Micro, Small and Medium - - Enterprises Development Act, 2006, along with the amount of the payment made to the suppliers beyond the appointed day during the year. Interest due and payable for the year of delay in making payment (which have been - - paid but beyond the appointed day during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006 Interest accrued and remaining unpaid - - Further interest remaining due and payable even in the succeeding period until such - - date when the interest dues as above are actually paid to the small enterprise. - -
69 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 10. Other Current Liabilities As At As At 31 March 2016 31 March 2015 Current maturities of long term borrowings (refer note 4) 19,778.68 22,496.61 Interest accrued but not due on borrowings 1,358.52 748.58 Interest accrued and due on borrowings - 114.86 Others Deposits from customers, employees and others 0.07 8.44 Product development contribution 2,919.59 2,754.89 Advance from Customers 3,095.29 1,847.27 Unearned revenue - 1.44 Statutory Dues Payable 512.57 478.04 Balance with Bank - Overdrawn as per Books 13.16 213.53 Employee Benefits Payable 1,000.45 470.38 Capital Creditors for Capital Expenditure - 12.60 Provision for Expenses 4,166.39 4,808.65 Security deposit from others 6.10 - Other Payables 7.46 157.58 31,675.00 34,112.87
11. Short Term Provisions As At As At 31 March 2016 31 March 2015 Provision for employee benefits (Refer note 31) Gratuity 97.03 80.26 Leave benefits 7.45 6.49 Deferred Compensation 54.23 158.71 86.75
70 Reliance Broadcast Network Limited
NotesNotes toto thethe ConsolidatedConsolidated financialfinancial statementsstatements forfor thethe yearyear endedended 3131 MarchMarch 20162016 - - As on 0.00 2015 63.12 54.16 46.42 21.94 29.92 (0.00) 593.87 303.73 31 March 31 March in Lakhs) 3,817.55 5,879.99 2,964.13 5,660.26 4,597.06 3,297.78 ` 23,942.53 ( ` - Net Block As on 0.00 2016 76.36 40.64 12.74 22.25 (0.00) 256.51 347.94 210.83 31 March 31 March 3,404.57 4,597.06 3,297.78 4,138.76 25,078.30 12,500.95 25,311.38 ------9.16 6.12 255.14 279.46 549.88 567.53 567.53 549.88 567.53 As on 31 Impairment March 2016 March As on 2016 54.58 61.52 15.38 405.01 220.48 911.60 178.71 932.06 273.58 31 March 31 March 2,860.70 11,113.63 14,848.77 14,893.10 14,258.95 15,690.13 16,230.22 ------Year 2.93 0.31 2.85 36.28 31.96 48.96 74.33 Deletions Deletions during the - - - Year 4.42 7.67 34.51 21.22 60.38 523.66 271.50 969.48 135.24 915.69 during the 1,828.36 1,841.66 1,971.27 For the year/ For Adjustments* Depreciation/Amortisation As on 2015 1 April 1 April 46.91 61.52 15.38 11,690.74 lakhs Non-refundable One Time Entry Fees (‘NOTEF’) for these stations. stations. these for (‘NOTEF’) EntryTime Fees One Non-refundable 11,690.74 lakhs ` 373.43 199.57 854.07 206.25 796.82 273.58 2,589.20 10,626.25 13,928.25 13,064.74 12,417.29 14,848.77 14,258.95 As on 2016 76.83 61.52 15.38 490.53 267.24 191.45 841.11 31 March 31 March 1,168.11 3,488.10 1,142.89 14,773.34 19,995.71 39,971.40 18,124.26 20,378.77 42,109.13 127.25 Lakhs had been charged to the opening balance of retained earnings for the assets, the respectin for earnings retained of balance opening the to charged been had 127.25 Lakhs ` ------Nil) ` Year 786.84 Lakhs. Consequently, the profit before tax for the period ended would have been lower by similar by similar lower been would have the period ended for tax before the profit 786.84 Lakhs. Consequently, ` 5.20 4.53 36.74 63.40 268.41 247.60 562.48 Deletions Deletions during the - - - - - Year Gross Block Gross 50.02 11.92 25.57 42.34 46.71 342.81 515.22 250.87 945.54 during the Additions/ 23,942.53 23,984.87 Adjustments* 26,807.94 lakhs and the net migration fees after taking into account the residual value of the Phase II licenses was was II licenses the Phase of value the residual account into taking after fees and the net migration 26,807.94 lakhs ` As on 2015 1 April 1 April 76.83 61.52 15.38 445.71 259.85 900.49 228.19 841.11 810.21 lakhs (Previous year year (Previous 810.21 lakhs ` 3,462.53 1,100.55 14,698.94 19,808.24 16,028.87 18,077.55 19,995.71 18,124.26
The Company had revised depreciation rates on fixed assets w.e.f. 1 April, 2014 as per the useful life specified in Schedule II of the Companies Act, 2013 (the “Act”). Act, 2013 (the Companies of the II in Schedule specified life the useful April, 2014 as per 1 w.e.f. assets on fixed rates depreciation had revised The Company Act,of an amount the of II saidthe in AsSchedule prescribed on the remaining based had been calculated depreciation assets on that date, other April, 2014. In respect of as on 1 life useful no remaining was there which of the for charge Act, 1956, the depreciation Companies as per XIV rates Schedule applicable with the previously continued assets. those Had the Company of life useful by been higher have 2015 would 31 March, ended year amounts. the was given Company 1, 2015 the April III), effective (Phase Agencies Private Services through Radio Broadcasting FM expansion of for policy the modified As per each for NOTMF (‘NOTMF’). Fees Migration Time One Non Refundable of on payment III regime Phase to II regime Phase from its licenses existing all migrate option to for III to Phase II Phase from its 44 out of 45 stations to migrate the option exercised had Company The 24, 2015. by the MIB on September notified was station was fees migration the gross which years. amortization has a remaining fourteen period of NOTMF lakhs. paid The Company III auctions. in the Phase licenses 14 new won The Company such licenses. of operationalization of the date from 15 years of a tenure have III licenses the Phase All of cost borrowing Includes 12. Fixed Assets 12. Fixed Particulars Assets Tangible & MachineryPlant Equipments Office & Fixtures Furniture Machines Processing Data Improvements Leasehold Vehicles Total Year Previous Assets Intangible generated) than internally (other license broadcasting Radio 1) note v (b) of Note (Refer Software Computer Copyrights Goodwill Branding Website Total Year Previous Advances)* Capital (Including In Progress Work Capital 1) 2) 3) 4)
71 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
13. Non-current Investments As At As At 31 March 2016 31 March 2015 Investment in Preference Shares (Non-trade, unquoted and at cost) Reliance Big Broadcasting Private Limited Nil (Previous year: 3,000,000) 8% Cumulative Redeemable Preference shares of - 3,000.00 ` 1 each, fully paid up
Reliance Big Broadcasting Private Limited 3,000.00 - 300,000,000 (Previous year: Nil) 8% Cumulative Redeemable Preference shares of ` 1 each, fully paid up
Reliance Capital Asset Management Limited - - 3,000,000 (Previous year: NIL), 6% Non-cumulative Redeemable Preference Shares of `100/- each (Refer note 41) 3,000.00 3,000.00
Aggregate value of unquoted investments 3,000.00 3,000.00 Aggregate Provision for Diminution in the value of Investments - -
14. Long Term Loans and Advances As At As At 31 March 2016 31 March 2015 Unsecured and considered good unless otherwise stated Capital Advances 1,230.00 -
Security Deposit Considered good 3,770.34 2,270.41 Considered doubtful 1,475.51 661.62 5,245.85 2,932.03 Less: Provision for doubtful security deposit 1,475.51 661.62 3,770.34 2,270.41 Loans and advances to Others 2,300.00 2,653.68
Other loans and advances Advance Tax (net of provision for tax) 1,632.42 1,694.55 Prepaid Expenses 3,370.28 2,695.85 Cenvat credit receivable 775.78 612.48 5,778.48 5,002.88 13,078.82 9,926.97
72 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
15. Other Non-Current Assets As At As At 31 March 2016 31 March 2015 Unsecured, considered good unless stated otherwise Interest accrued on Fixed Deposits - 0.47 Margin Deposits* 1,171.40 30.45 1,171.40 30.92
* Balances in margin money accounts represent fixed deposits with banks with maturity of more than twelve months.
16. Inventories (valued at lower of cost and net realisable value) As At As At 31 March 2016 31 March 2015 Events / Contents 171.13 1.75 Television Programmes and movie rights Under Production 1,451.01 - Unamortised 1,953.44 5,972.07
Merchandise 38.94 38.94 Less: Provision for obsolence 3,575.58 5,973.82
17. Trade Receivables As At As At 31 March 2016 31 March 2015 Unsecured, considered good Outstanding for a period exceeding six months from the date they are due for payment 1,033.42 1,526.25 Other Debts 8,763.20 8,129.36 9,796.62 9,655.61 Unsecured, considered doubtful Outstanding for a period exceeding six months from the date they are due for payment 445.77 1,340.45 Other Debts - - 445.77 1,340.45 Less: Provision for doubtful receivables 445.77 1,340.45 - -
9,796.62 9,655.61
18. Cash and Bank Balances As At As At 31 March 2016 31 March 2015 Cash and Cash Equivalents Balances with banks: In Current Accounts 2,543.46 1,940.72 In Fixed Deposits with original maturity of less than three months - 723.39
Cash on hand 7.16 5.23 2,550.62 2,669.34 Other Bank Balances In Fixed Deposits with original maturity of more than three months and less than - 307.26 twelve months Margin Deposits with maturity of less than twelve months 1,588.80 195.07
4,139.42 3,171.67
73 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 19. Short Term Loans and Advances As At As At 31 March 2016 31 March 2015 Unsecured and considered good unless otherwise stated Security Deposit 131.30 13.72 Loans and Advances to Others 3,653.68 5,296.32 Loan to Unpronounceable productions - 336.14 Loans and advances to employees 85.97 82.31 Other Advances 9.83 - 95.80 82.31 Other loans and advances Prepaid Expenses 3,121.91 3,487.54 Advance to Vendors 1,539.86 1,832.05 Claims/Other receivable 1,970.03 2,978.44 Deposit with Service Tax Authorities 32.11 52.75 Other Advances 14.20 17.39 Cenvat Credit Receivable 4,731.61 3,417.78 11,409.72 11,785.95
Less: Provision for doubtful advances 1,094.97 873.18
14,195.53 16,641.26
20. Other Current Assets As At As At 31 March 2016 31 March 2015 Interest accrued but not due on Loans and Advances to Others 56.14 53.81 Interest accrued on Fixed Deposits 99.94 46.81 156.08 100.62
21. Revenue from Operations For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Sale of Services 36,957.48 28,600.94 Sale of Goods 457.00 154.80 Other Operating Revenue Management Fees 306.43 153.09 Excess Accruals Written Back 555.05 247.73 Sundry Credit Balances Written Back 423.51 48.95 Syndication Income 24.95 29.39 Other Revenue 77.13 270.29 1,387.07 749.45
Revenue from Operations 38,801.55 29,505.19
Details of services rendered
Sale of radio airtime 30,467.58 22,546.37 Television Programme Production Income 2,128.76 2,040.07 Out of Home Media Income - 2.81 Income from Television media operations 4,361.14 4,011.69 36,957.48 28,600.94
74 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
22. Other Income For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Interest Income on Bank Deposits 164.13 54.03 Others 1,136.73 244.27 Income Tax Refund 115.82 135.50 Dividend on Investments 31.07 -
Other non operating income Income from facility sharing 132.87 158.83 Profit on sale of current investments 601.11 - Foreign Exchange gain (Net) - 17.67 Miscellaneous Income 22.23 0.11 2,203.96 610.41
23. Direct Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Purchases of stock-in-trade (traded goods) 458.60 155.28 Royalty 433.16 386.15 Transmission Expenses - Power & Fuel 676.13 675.40 - License Fees 176.06 137.13 - Other transmission cost 46.72 49.70 Out of Home Media Expenses 502.24 24.41 Revenue Sharing License Fees 2,168.05 1,421.29 Placement Fees 146.70 4,410.17 Television Programme, Content and Other Production Expenses: Opening Inventory 6,004.93 3,434.98 Add: Commissioned / acquisition 9,770.41 5,305.43 Add: Production Expenses - - - Equipment Hire Charges 167.33 263.22 - Location Hire Charges 62.40 132.44 - Professional Fees 3,214.97 2,505.80 - Other production cost 260.59 1,003.76 Less: Closing Inventory (3,575.58) (6,004.93) 20,512.71 13,900.24
75 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
24. Employee Benefit Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Salaries, wages and bonus 7,731.82 7,018.30 Contribution to Provident and other funds 304.10 254.33 Gratuity Expense 97.96 66.47 Leave Encashment 2.28 2.00 Staff Welfare Expenses 292.85 244.96 8,429.01 7,586.06 25. Finance Costs For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Interest 10,725.43 4,484.08 Other Borrowing Costs 1,204.58 264.86 11,930.01 4,748.94
26. Depreciation, amortisation and impairment expense For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Depreciation/ impairment of tangible assets 915.65 1,378.71 Amortisation/impairment of intangible assets 1,965.94 2,923.78 2,881.59 4,302.49 27. Other Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015
Advertisements 3,666.86 2,828.39 Distribution and advertisements rights expenses 5,956.23 585.27 Management and distribution service fees - 40.19 Bank Charges 216.03 124.23 Bad Debts 934.51 19.00 Business Promotion 196.71 140.68 Rent, Rates and Taxes 2,569.86 2,484.07 Travelling and Conveyance 644.13 572.31 Payment to Auditor 48.40 60.00 Electricity Charges 466.25 457.23 Insurance Charges 17.80 230.01 Legal and Professional Fees 1,706.93 2,063.93 Director's Sitting Fees 4.10 4.50 Loss on Sale/Disposal of Assets (net) 85.46 4.96 Communication Expenses 211.54 233.18 Printing and Stationery 58.64 46.52 Provision for Doubtful Debts (Net of Doubtful debts written off ` 845.31 Lakhs 120.91 947.07 (Previous year: ` 772.50 Lakhs)
76 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs)
27. Other Expenses For The Year Ended For The Year Ended 31 March 2016 31 March 2015 Provision for Doubtful Deposits/Advances (Net of Doubtful debts written off 1,035.72 728.80 ` 449.97 Lakhs (Previous year: ` 264.78 Lakhs) Advances/Deposits Written Off 625.25 84.08 Repairs and Maintenance - Repairs to Machinery 285.89 248.71 - Repairs to Others 580.21 575.18 Security Charges 222.54 168.31 Housekeeping Charges 218.28 185.54 Foreign Exchange Loss (Net) 102.14 - Computer / Internet / Intranet 273.54 258.29 Conference Expense 72.29 120.07 Telecast and uplinking fees 238.42 234.61 Sales Incentive 1,159.42 354.84 Other Miscellaneous Expenses 142.27 204.79 21,860.33 14,033.95
28 Contingent Liabilities Particulars 31 March, 2016 31 March, 2015 Bank Guarantees 2,750.61 6,065.61 Claims against the company not acknowledged as debt 779.20 653.81 Disputed Service tax demand (excluding penal interest) 1,376.21 1,396.85 Disputed Income tax demand 29.00 75.92 Disputed Stamp duty 6.70 6.70 Disputed Property Tax 2,465.30 2,465.30 Disputed Sales tax 68.04 68.04 7,475.06 10,732.23
The company is a party to various legal proceedings in the normal course of business and does not expect the outcome of these proceedings to have any adverse effect on its financial conditions, results of operations or cash flows. 29 The Company is into litigations and arbitrations with various Statutory Corporations, Copyright Society and private parties for the claims made on or by the Company. These matters are subjudice and pending before various courts/ arbitrators. Pending the outcome of the said litigations and arbitrations, the Company has not made any provisions/adjustment for the Security deposits and Advances paid to them aggregating to ` 2,123.70 Lakhs (Previous year: ` 3,164.53 Lakhs). The Company is hopeful of recovering the said deposits and advances.
77 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 2015 11.01 363.63 297.58 388.86 31 March 31 March 4,748.94 2,857.98 4,302.49 33,412.27 47,176.13 77,232.84 (3,685.53) (9,343.51) 29,726.74 30,115.60 (14,467.09) 2.09 2016 31 March 31 March 2,203.96 2,430.54 2,881.59 Total 41,261.89 38,801.55 41,005.51 11,930.01 81,785.24 37,431.36 (2,460.34) (6,291.60) 138,216.28 (18,969.72) (24,610.23) ------2015 31 March 31 March (924.86) 3,242.39 7,286.59 6,962.10 2,317.53 2,317.53 (2,755.90) ------Others 2016 31 March 31 March (144.80) 2,273.56 2,128.75 2,128.75 3,987.56 8,355.57 (5,085.12) ------2015 (21.31) 31 March 31 March 4,779.04 4,757.73 4,757.73 17,334.68 66,313.80 (14,164.12) ------Television 2016 (97.85) 31 March 31 March 5,569.89 5,472.04 5,472.04 18,278.33 81,998.03 (26,575.40) ------2015 31 March 31 March 7,576.50 3,956.94 25,390.84 22,554.86 (2,739.36) 22,651.48 22,651.48 ------2016 Radio Broadcasting Radio 31 March 31 March 33,418.45 31,200.76 31,200.76 12,690.79 59,519.36 47,862.68 (2,217.69) Disclosure of Segment Reporting under AS 17 Segment Reporting under of Disclosure Particulars Segment Revenue Segment Revenue Inter Income Total Revenue Others/ (Unallocated) Revenue Total Result Segment Result Income) Unallocated (Net of Expenses Corporate Unallocated Income) (Net of Expenses Interest Taxes Income Tax Net Profit After Information Other Segment Assets Segment Liabilities Corporate Unallocated Liabilities (Net of Corporate Unallocated Assets) Expenditure Capital and amortisationDepreciation 30 necessary. wherever regrouped/rearranged been have Television Business, segments three – Radio into divided is primarily the Group The business of Segment as primary the Business segment. has disclosed The Group reporting system. and internal structure taking int the organization been identified The segments have and Others. Business operations Television licenses. broadcasting radio allotted been have Group the services where cities the in broadcasting radio FM of consist primarily operations Radio under been grouped have not reportable during the year segment were which The businesses, Channels. figures Television service of and broadcasting operating consists of Services. and Other Outdoor, Production, of comprises This mainly “Others” segment. segment as alsoeach the amountsto amounts allocable Assets the respective Segment identifiable Segment Results, and Segment Liabilities include Segment Revenues, Assets / expenses. income corporate as unallocated shown are segment Business any to year attributable not are directly which and Expenses basis. Income on a reasonable are operations The Group’s assets and liabilities respectively. corporate as part the segments shown unallocated are between of be allocated and Liabilities that cannot segments. geographical reportable outside no are earnings As such there India. material does not have The Group within India. confined mainly Previous
78 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 31 Employee Benefits Defined Contribution Plan Contribution to Defined Contribution Plan, recognised as expense for the year are as under :
Particulars 31 March, 2016 31 March, 2015 Employers contribution to Provident fund and other funds 303.74 250.34
Other long term employee benefits comprises encashment of leave and deferred compensation plan. The obligation for leave encashment and deferred compensation plan are recognised based on actuarial valuation carried out using the Projected Unit Credit Method. Expense recognised in the Statement of Profit and Loss during the current year is ` 2.44 Lakhs (Previous year: ` 2.00 Lakhs) and ` 111.60 Lakhs (Previous year ` Nil) respectively. Defined Benefit Plan Gratuity The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each year 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 leave encashment is recognised in the same manner as gratuity. I. Reconciliation of opening and closing balances of Defined Benefit obligation Particulars 31 March, 2016 31 March, 2015 Gratuity (Unfunded) Defined Benefit obligation at beginning of the year 201.05 161.91 Current Service Cost 39.21 33.42 Interest Cost 15.70 13.99 Actuarial (gain)/loss 43.04 19.06 Past Service Cost - - Liabilities assumed on Acquisition / (Settled on Divestiture) - 0.05 Benefits Paid (39.32) (26.82) Liability transferred on demerger of an undertaking - (0.56) Defined Benefit obligation at the end of the year 259.69 201.05
II. Reconciliation of fair value of assets and obligations Particulars 31 March, 2016 31 March, 2015 Gratuity (Unfunded)
Fair value of plan assets at the end of the year - - Present value of obligation at the end of the year 259.69 201.05 Liability recognised in the Balance Sheet 259.69 201.05
III. Expense/(Income) recognised during the year Particulars 31 March, 2016 31 March, 2015 Gratuity Current Service Cost 39.21 33.42 Interest Cost 15.70 13.99 Expected return on plan assets (0.81) (0.80) Actuarial (gain) / loss 43.85 19.86 Past Service Cost - - Expense/(Income) recognised during the year 97.95 66.47
IV. Experience Adjustments Particulars 31 March, 31 March, 31 March, 31 March, 31 March, 2016 2015 2014 2013 2012 Defined Benefit Obligation 259.69 201.05 161.59 161.04 132.27 Plan Assets - - - - - Surplus / (Deficit) (259.69) (200.54) (160.70) (160.33) (120.82) Experience Adjustments on Plan Liabilities 42.41 15.51 9.52 (23.01) (16.00) Experience Adjustments on Plan Assets - - (1.74) - -
79 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) V. Actuarial assumptions Particulars 31 March, 2016 31 March, 2015 Gratuity Leave Gratuity Leave (Unfunded) Encashment (Unfunded) Encashment (Unfunded) (Unfunded) Mortality Table (LIC) 2006-08 2006-08 2006-08 2006-08 (Ultimate) (Ultimate) (Ultimate) (Ultimate) Discount rate (per annum) 7.35% 7.35% 7.95% 7.95% Expected rate of return on plan assets (per annum) - - - - Rate of escalation in salary (per annum) 7% 7% 7% 7%
The estimates for rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
32 Disclosure of Related Party under AS 18 Holding Company Reliance Land Private Limited (w.e.f. 20 March, 2015) Parties where control exists Related parties with whom transactions have taken place during the year Significant Shareholders, Key Management Personnel and their relatives Relationship Name of the Related party Remarks Key Managerial Personnel Tarun Katial Chief Executive Officer Key Managerial Personnel Asheesh Chatterjee Chief Financial Officer Key Managerial Personnel Shikha Kapadia Company Secretary (w.e.f. 22 August, 2014) Key Managerial Personnel Gururaja Rao Company Secretary and Manager (upto 21 July, 2014)
Relative of Key Managerial Personnel: Spouse of Gururaja Rao Mrs. Akshata Rao (upto 21 July, 2014)
Others: RTL Group Beheer B.V., Netherlands (upto 11th June, 2014) RTL Group Licensing Asia GmbH, Germany (upto 11th June, 2014) RTL Group Cable & Satellite GmbH, Germany (upto 11th June, 2014) Fremantle Media Limited, Australia (upto 11th June, 2014)
Transactions with Related Parties Particulars 31 March, 2016 31 March, 2015 Key Managerial Personnel Remuneration to Tarun Katial 236.08 476.74 Remuneration to Asheesh Chatterjee 111.43 116.23 Remuneration to Gururaja Rao (upto 21 July, 2014) - 22.58 Remuneration to Shikha Kapadia (w.e.f. 22 August, 2014) 27.04 12.88
Receiving of Car Hire Services from Relative of Key Managerial Personnel Mrs. Akshata Rao - 0.55 Transactions with Related Parties Particulars 31 March, 2016 31 March, 2015 Others RTL Group Beheer B.V., Netherlands Purchase of Assets - 15.82 Management fees - 2.32
Fremantle Media Ltd, Australia Purchase of Programs - 29.19
80 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 33 Lease disclosure under AS 19 The Company has taken various office premises, towers and other licenses on cancelable operating lease, where the lease agreements are normally renewed on expiry. The company is obligated under non-cancellable leases primarily for equipments taken for out of home division, which are renewable thereafter as per the term of the respective agreements. The future minimum lease payments in respect of non-cancellable operating lease are as follows: Particulars Minimum Lease Payments 31 March, 2016 31 March, 2015 Amounts due within one year from the balance sheet date 305.39 420.91 Amounts due in the period between one year and five years 232.97 126.78 Amounts due after five years - 16.99 538.36 564.68
The Lease rentals recognised in the profit and loss account is amounting to` 1,794.39 Lakhs (Previous Year ` 2,349.05 Lakhs).
34 Earnings Per Share (‘EPS’) Particulars 31 March, 2016 31 March, 2015 Net (loss) available for equity shareholders (24,610.23) (14,467.09) Weighted average number of equity shares outstanding during the year 7,94,51,170 7,94,51,170 Basic/ Diluted Earnings Per Share (30.98) (18.21) Nominal value per share 5 5
35 Interest in Joint Venture The Company's interest in jointly controlled entity (incorporated joint venture) Name of Joint Venture Country of Ownership Interest Ownership Interest Incorporation 31 March 2016 31 March 2015 Azalia Broadcast Private Limited (Formerly known as Big RTL India NIL NIL* Broadcast Private Limited) Details of Joint Venture Particulars 31 March 2016 31 March 2015 I Assets 1 Non-current assets i Fixed assets v Tangible assets - - Intangible assets - - ii Long-term loans and advances - - 2 Current assets Inventories - - Trade receivables - - Cash and bank balances - - Short-term loans and advances - - II Liabilities 1 Shareholder's fund - reserves and surplus - - 2 Share application money pending allotment - - 3 Non-current liabilities - - Long-term provisions - - Current liabilities - - Short-term borrowings - - Trade payables - - Other current liabilities - - Short-term provisions - - 81 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) Details of Joint Venture Particulars 31 March 2016 31 March 2015 III Income 1 Income from Media Operations - 16.92 2 Other Income - 2.39 IV Expenses 1 Employee benefits expense - 12.78 2 Depreciation and amortization expense - 0.35 3 Other expenses - 206.81 Loss before Taxation - (200.63) Provision for Tax (including deferred tax) - - Loss After Tax - (200.63) V Other Matters 1 Contingent Liabilities NIL NIL 2 Capital and other commitments NIL NIL
* - Ceased to be Joint Venture w.e.f. 11 June, 2014 36 Goodwill on consolidation During the year, the Group has acquired 50% equity stake in one of its jointly controlled entity through its subsidiary company (Previous year acquired 19% stake in one company) through its subsidiary company. On Consolidation, the Company has recognised the following goodwill: Particulars 31 March, 2016 31 March, 2015 Opening balance of Goodwill on consolidation 1,173.03 2,509.63 Goodwill on acquisition of subsidiaries (net) - - Capital Reserve on acquisition of a jointly controlled entity - (268.69) Goodwill impaired during the year - (1,067.91) Closing balance of Goodwill on consolidation 1,173.03 1,173.03
37 Capital reserve on consolidation During the previous year the company had acquired 50% equity stake in one company through its subsidiary company. On consolidation, the Company has recognised the following capital reserve: Particulars 31 March, 2016 31 March, 2015 Opening balance of Capital Reserve on consolidation - 993.48 Capital reserve on acquisition of subsidiaries (net) - - Adjustment on demerger of Digital marketing undertaking (Refer note 41) - (993.48) Closing balance of Capital Reserve on consolidation - -
38 Foreign currency exposures (other than investments) not covered by forward contracts Particulars 31 March, 2016 31 March, 2015 Currency Foreign Amount Currency Foreign Amount Currency - Indian Currency - Indian Amount Rupees Amount (In Rupees (In Lakhs) Lakhs) Trade Receivables USD 12.55 832.42 USD 1.61 100.51 CAD - - CAD 2.20 108.86 Trade Payables USD 1.92 116.02 USD 1.23 75.38 GBP 0.07 5.64 EURO 0.00 0.00 Security Deposit from Customers USD - - USD 0.22 14.07 39 Termination of Joint Venture Agreement with Co-venturer The Company has investments in equity and loans and advances into its wholly owned subsidiary Cinestar Advertising Private Limited (‘CAPL’). CAPL has further investments in a step down entity viz. Azalia Broadcast Private Limited (‘Azalia Broadcast’) (formerly known as ‘Big RTL Broadcast Private Limited’), which was earlier a Joint Venture entity. During the Previous Year, the joint venture agreement was mutually terminated and Big Magic Limited (‘BML’) (a wholly owned subsidiary of the Company) acquired the remaining 50% stake of the co-venturer on 12 June, 2014. Consequent upon this acquisition Azalia Broadcast had become a subsidiary of the Company on and from the said date.
82 Reliance Broadcast Network Limited
Notes to the Consolidated financial statements for the year ended 31 March 2016
(` in Lakhs) 40 The group’s net worth has been eroded, however, having regard to financial support from its promoter company, the financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. 41 The subsidiary company had filed a Scheme of Arrangement (the Scheme) under section 391 to section 394 of the Companies Act, 1956 with the Honorable High Court of Judicature at Bombay for the demerger of the Digital Marketing Undertaking (the Undertaking), a division of the Company, in to Reliance Capital Asset Management Limited (the Acquirer). The said scheme had been approved vide High Court order dated November 7, 2014. As per the High Court order, all related assets, liabilities, rights and licenses, employees, deposits and balances with Government authorities, all books, records, files, papers, directly or indirectly relating to the Demerged Undertaking as of the appointed date of April 1, 2013 had been transferred to the Acquirer for a total consideration of ` 3,000 Lakhs by way of 3,000,000 6% redeemable preference shares of ` 100 each to be issued to the shareholders of the Company. All Income and expenses pertaining to the Undertaking, post the appointed date, had also been transferred to the Acquirer. (` in lakhs) The following assets and liabilities of the undertaking were transferred pursuant to the Scheme. EQUITY AND LIABILITIES Non-current liabilities Long-term provisions 0.65 Current liabilities Trade payables 122.32 Other current liabilities 8.53 Short-term provisions 0.08 Total (A) 131.58 ASSETS Non-current assets Fixed assets Tangible assets 8.71 Long-term loans and advances 2,142.88 Current assets Trade receivables 60.91 Cash and bank balances 10.22 Short-term loans and advances 0.54 Total (B) 2,223.24 Net Balance (B-A) 2,091.66
As per the provision of the scheme, Net assets of ` 2,091.66 Lakhs which were included as a part of the consolidated financial statements for the previous year ended 31 March, 2014, had been transferred under the scheme. Out of which, ` 993.48 Lakhs was debited to the Capital Reserve on Consolidation, which was created at the time of acquisition of the remaining 50% stake in Azalia Distribution Private Limited. Balance of `. 1,098.17 Lakhs was debited to the carried forward balance of the statement of profit & loss in the previous year. 42 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure. As per our report of even date For Chaturvedi & Shah For and on behalf of the Board of Directors Chartered Accountants Firm Registration No.: 101720W Anil Sekhri Darius Jehangir Kakalia Shubhadarshini Ghosh Director Director Director Parag D. Mehta Partner Tarun Katial Asheesh Chatterjee Shikha Kapadia Membership No.: 113904 Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai Mumbai August 24, 2016 August 24, 2016
83 Reliance Broadcast Network Limited
- - Nil Nil Nil Nil N.A. 1.58 0.52 100% (1.58) (0.59) (1.11) in Lakhs) LLC ` ( 02.10.2014 GVTV DevCo DevCo GVTV USD/66.3329 Nil Nil Nil N.A. 81% 0.54 0.52 1,087.17 6,329.51 1,171.75 (5,242.89) (2,435.86) (2,436.38) 25.03.2014 Georgeville Georgeville Television LLC Television USD/66.3329 Nil Nil Nil N.A. 65% 0.54 9.91 0.52 16.90 27.35 92.62 (2.61) (3.13) US LLC US LLC 25.03.2014 Reliance TV TV Reliance USD/66.3329 Nil Nil Nil N.A. 0.52 100% 271.95 842.01 108.88 (38.59) (79.29) (79.81) 1,075.37 18.06.2012 RBN US LLC USD/66.3329 Nil Nil Nil Nil N.A. N.A. 6.26 100% 925.27 Azalia (633.06) (633.06) Private Private 6,414.29 1,194.72 Limited Broadcast Broadcast (6,683.74) 12.06.2014 Nil Nil Nil Nil N.A. N.A. 100% 62.83 40.77 18.80 (19.42) (19.42) Azalia Private Private Limited
14,356.15 20.12.2013 Distribution (14,334.09) Nil Nil Nil N.A. N.A. 5.00 100% 3,000.00 5,894.41 Limited 17,547.45 77,762.95 Big Magic Big Magic 19.04.2011 (60,220.50) (31,572.07) (31,572.07) Nil Nil Nil Nil N.A. N.A. 1.86 100% 28.60 896.98 Private Private 6,399.98 Limited Limited Cinestar Cinestar (6,373.23) (1,497.64) (1,497.64) 13.02.2011 Advertising Advertising Nil Nil Nil Nil N.A. N.A. 100% 41.09 80.37 187.37 (436.00) (436.00) Private Private Limited Reliance Reliance Television Television 10,003.51 (9,964.23) 16.08.2010 Name of the subsidiary of Name The date since when when since The date acquired/ subsidiary was incorporated the Reporting period for if subsidiary concerned, the holding from different reporting period company's Reporting currency and as on the rate Exchange the relevant of date last in the case year Financial subsdiaries foreign of capital Share & Surplus Reserves Assets Total Liabilities Total Investments Turnover before Profit/(Loss) taxation taxation for Provision taxation after Profit/(Loss) Dividend Proposed (in shareholding of Extent percentage)
The Financial Year for Subsidiaries is for 12 months from April 1, 2015 to March 31, 2016. March 1, 2015 to April 12 months from is for Subsidiaries for Year The Financial in Subsidiaries investment exclude Investment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Sr. Sr. No. Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures companies/joint subsidiaries/associate of statement the financial of salient features containing Statement [Pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of Companies (Accounts) Rules, 2014] Rules, Companies (Accounts) 5 of with rule Act,read 2013 Companies the section 129 of to sub-section (3) of first proviso to [Pursuant Subsidiaries “A”: Part Notes: 1 2 LLC DevCO operation-GVTV commence to yet are which Subsidiaries of Name sold during the year-NIL or been liquidated have which Subsidiaries of Name
84 Reliance Broadcast Network Limited N.A. N.A. N.A. N.A. N.A. N.A. N.A. None in Lakhs) ` ( Shikha Kapadia Secretary Company Shubhadarshini Ghosh Shubhadarshini Director Asheesh Chatterjee Asheesh Chatterjee Officer Financial Chief Darius Jehangir Kakalia Darius Jehangir Director Chief Executive Officer Officer Executive Chief Director Director Katial Tarun Anil Sekhri Anil Mumbai 24, 2016 August For and on behalf of the Board of Directors Directors of the Board of and on behalf For - NIL - N.A.
Name of Associates/Joint Ventures Name Associates/Joint of Sheet Date Balance audited Latest acquired or associated was Venture Joint or Associate the on which Date end on the year the company held by Ventures Joint or Associate of Shares No. Venture Joint or Associates in Investment Amount of Holding (in percentage) of Extent influence is significant there how Description of is not consolidated venture the associate/joint why Reason Sheet Balance audited latest as per shareholding to Networth attributable year the for Loss or Profit in Consolidation Considered in Consolidation Not considered Name of Associates or Joint Ventures which are yet to commence operations operations commence to yet are which Ventures Joint or Associates of Name sold during the year or been liquidated have which Ventures Joint or Associates of Name Note:- during the year Venture/Associates Joint any have doesn’t The Company 1 2 3 4 5 6 7 Sr. No. Sr. Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures Joint and Companies Associate to Act, 2013 related the Companies Section 129 (3) of to pursuant Statement Part B: Associates & Joint Ventures Joint & Associates B: Part
85 Reliance Broadcast Network Limited
Route Map to the AGM Venue
Venue: Auditorium, Reliance Energy Management Institute, 19 Aarey Colony, Jogeshwari Vikhroli Link Road (‘JVLR’), Opp. SEEPZ, Mumbai 400 065.
JVLR Reliance Energy Management Institute Eastern Express Seepz Highway
Landmark: Opposite to SEEPZ Distance from JVLR : 3.5 km Distance from Eastern Express Highway : 7.5 km
86 Reliance Broadcast Network Limited Registered Office: 401, th4 Floor, INFINITI, Oshiwara, Link Road, Andheri (West), Mumbai 400 053 Broadcast Network CIN: U64200MH2005PLC158355, Tel: + 91 22 3068 9444 Fax: + 91 22 3988 8927 " WEBSITE: www.reliancebroadcast.com, E-mail:[email protected] ATTENDANCE SLIP ANNUAL GENERAL MEETING *DP Id / Client Id Name and Address of the registered Shareholder Regd. Folio No. No. of Share(s) held (* Applicable for Members holding share(s) in electronic form) I/ We hereby record my/our presence at the 12th Annual General Meeting of the Members of Reliance Broadcast Network Limited held on Thursday, September 29, 2016 at 10:00 A.M, at Auditorium, Reliance Energy Management Institute, 19 Aarey Colony, Jogeshwari Vikhroli Link Road, Opp. SEEPZ, Mumbai 400 065.
Member’s / Proxy Signature
Note: Please complete this and hand it over at the entrance of the hall. "
" TEAR HERE
Reliance Broadcast Network Limited PROXY FORM Registered Office: 401, th4 Floor, INFINITI, Link Road, Oshiwara,Andheri (West), Mumbai 400 053 Broadcast Network CIN: U64200MH2005PLC158355, Tel: + 91 22 3068 9444 Fax: + 91 22 3988 8927 Website: www.reliancebroadcast.com, E-mail: [email protected]
FORM NO. MGT-11 [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules 2014]
Name of the Member(s) Registered Address
E mail Id: *DP Id / Client Id. Regd. Folio No. (* Applicable for Members holding share(s) in electronic form) I / We, being the member(s) of ……………………………...... shares of the above named company, hereby appoint: (1) Name: ……………………………...... Address: ……………………………………...... E-mail Id: ………………………...... Signature……………………...... or failing him (2) Name: ……………………………...... Address: ……………………………………...... E-mail Id: ………………………...... Signature……………………...... or failing him (3) Name: ……………………………...... Address: ……………………………………...... E-mail Id: ………………………...... Signature……………………...... as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 12th Annual General Meeting of the Company, to be held on Thursday, September 29, 2016, at 10:00 A.M, at Auditorium, Reliance Energy Management Institute, 19 Aarey Colony, Jogeshwari Vikhroli Link Road, Opp. SEEPZ, Mumbai 400 065, and at any adjournment thereof in respect of such resolutions as are indicated below:
Resolution no. and Matter of Resolution For Against 1. To consider and adopt: a) the audited financial statement of the Company for the financial year ended March 31, 2016 and the reports of the Board of Directors and Auditors thereon, and b) the audited consolidated financial statement of the Company for the financial year ended March 31, 2016 and the report of the Auditors thereon. 2. To appoint a Director in place of Ms. Shubhdarshini Ghosh (DIN: 07191985), who retires by rotation and being eligible, offers herself for re-appointment. 3. To appoint Auditors and to fix their remuneration. 4. To approve Private Placement of Non-Convertible Debentures and/or other Debt Securities.
" Affix Signed this ______day of ______, 2016. Revenue Stamp Signature of the Shareholder (s) Signature of Proxy holder(s)
Note: This form of Proxy in order to be effective, should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting. If undelivered please return to: Karvy Computershare Private Limited (Unit: Reliance Broadcast Network Limited) Karvy Selenium, Tower - B Plot No. 31 & 32 Survey No. 116/22, 115/24, 115/25 Financial District, Nanakramguda Hyderabad 500 032. Website : www.karvy.com Tel. : +91 40 6716 1500 Fax : +91 40 6716 1791 Email : [email protected]