xvii. Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires
an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined
based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed
at each balance sheet date and adjusted to reflect the current best estimates. If the effect of time value of money
is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources embodying economic benefit. Where there is a possible obligation or
a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
xviii. Dividends
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividend is
recorded as a liability on the date of approval by the Company's Board of Directors.
xix. License Fees
As per the applicable Frequency Module (FM) broadcasting policy, license fees is recognised in statement of profit and
loss at the rate of 4% of gross revenue or minimum fixed fee for the concerned city, whichever is higher. Minimum fixed
fee is 2.5% of the Non-Refundable One Time Entry Fee (NOTEF).
However, for the first three years of operations in the States of North East (i.e. Assam and Meghalaya) and Jammu &
Kashmir the rate of License fee was 2% of Gross Revenue or 1.25% of NOTEF, whichever was higher.
Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes. Barter advertising
contracts are also included in the gross revenue on the basis of relevant billing rates. NOTEF means the successful bid
amount arrived at through an ascending e-auction process for private FM Radio Phase-III Channels conducted by the
Ministry of Information & Broadcasting (MIB).
xx. Recent accounting developments
i. Standards issued but not yet effective
The Ministry of Corporate Affairs (MCA) notifies new standard or amendments to the existing standards. As on
March 31, 2025, MCA has not notified any new standards or amendments to the existing standards applicable to
the Company.
ii. Standards issued / amended and became effective
Lease Liability in sale and leaseback - Amendments to Ind AS 116
On September 09, 2024, the MCA notified the narrow scope amendments to the requirements for sale and leaseback
transactions in Ind AS 116 which explain how an entity accounts for a sale and leaseback after the date of transaction.
The amendments specify that, in measuring the lease liability subsequent to the sale and leaseback, the seller-
lessee determines 'lease payments' and 'revised lease payments' in a way that does not result in seller-lessee
recognising any amount of the gain or loss that relates to the right of use that it retains. This could particularly
impact sale and leaseback transactions where the lease payments include variable payments that do not depend
on an index or a rate.
This amendment did not have any material impact on the amounts recognised in prior periods and do not affect
the current period or are expected to significantly affect future periods.
(a) Terms attached to equity shares
The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per
share is ' 10. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to
approval of the shareholders in the ensuing annual general meeting. In the event of liquidation of the Company, the equity
shareholders will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares
held by the shareholders.
Aggregate number of bonus shares issued, shares issued for consideration other than cash bought back during the period
of five years immediately preceeding the reporting date.
The Company has not issued any bonus shares, shares issued for consideration other than cash bought back during the
period of five years immediately preceeding the reporting date.
37. DISCLOSURES AS PER IND AS 116
The Company, at the inception of a contract, assesses the contract as, or containing, a lease if the contract conveys the right
to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the
right to control the use of an identified asset,
Ý the Company assesses whether the contract involves the use of an identified asset,
Ý the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the
period of use; and
Ý the Company has the right to direct the use of the asset.
The Company has lease contracts for office premises, transmission facilities and motor vehicles used in its operations.
Leases of transmission facilities generally have a lease term of 15 years, while offices generally have lease terms ranging
from 5 to 10 years. The Company has lease contracts for motor vehicles having lease term upto 3 years.
The Company has also applied the available practical expedients wherein it:
1. Used a single discounting rate to a portfolio of leases with reasonably same characteristics.
2. Applied short term lease exemptions to leases with lease term that ends within twelve months at the date on initial
application.
3. Excluded the initial direct cost from the measurement of the right of use of asset at the date of initial application.
Lease Liabilities
The Company recognises a lease liability measured at the present value of all the remaining lease payments, discounted
using the Company's incremental borrowing rate.
Right of use Asset
For new lease contracts, the Company recognises a right of use asset and a corresponding lease liability with respect to all
lease agreements in which it is the lessee. The lease liability and the right of use assets is initially measured at the present
value of remaining lease payments, discounted using the incremental borrowing rate at the date of recognition. Depreciation
is computed using straight-line method over the lease term. The Company's right of use assets were recognised and shown
separately in the Balance Sheet (Refer Note 4).
Short-term leases and leases of low-value assets
The Company has elected not to recognise right of use assets and lease liabilities for short term leases that have a lease
term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
For the year:
a. Depreciation expense during the year ' 1,846.30 lakhs (previous year: ' 1,881.82 lakhs) on account of depreciation on
right of use assets recognised.
b. Rent expense included in 'Operating and other expenses', decreased by ' 3,270.32 lakhs (previous year: ' 3,101.00 lakhs)
on account of operating leases recognised previously.
c. Finance costs during the year ' 1,323.74 lakhs (previous year: ' 1,439.20 lakhs) on account of interest expense on lease
liabilities recognised.
d. Cash outflow from operating activities decreased by ' 3,270.32 lakhs (previous year: ' 3,101.00 lakhs on account of
decrease in operating lease payments.
e. Cash outflow from financing activities during the year ' 3,346.04 lakhs (previous year: ' 3,157.08 lakhs) on account of
increase in principal and interest payments of lease liabilities.
44. Gross amount required to be spent by the Company during the year for Corporate Social Responsibility (CSR) activities was Nil
(March 31, 2024 - Nil).
45. PENDING LITIGATIONS, CLAIMS AND CONTINGENT LIABILITY:
a. Pending litigations and claims
The Company is involved in various litigations, the outcome of which are considered probable and in respect of which
the Company has aggregate provisions of ' 6,453.00 lakhs as at March 31, 2025 (March 31, 2024 - ' 5,652.40 lakhs).
b. Contingent liability - taxation
The Company is contesting certain disallowances to the taxable income and demands raised by the Income tax
authorities, the estimated tax liability of which is ' 7.00 lakhs as at March 31, 2025 (March 31, 2024 - ' 19.00 lakhs). The
management does not expect the liability from these claims to crystallize and accordingly, no provision has been
recognised in the financial statements for the same.
c. Other Litigation
The litigation between Phonographic Performance Limited (PPL) and the Company stems from PPL's challenge to the
Copyright Board's order passed in 2010, fixing 2% Net Advertisement Revenue (NAR) as royalty. In April 2023, Hon'ble
Madras High Court partly allowed PPL's appeal, setting a higher rate of 2% NAR or ' 660 per needle hour (whichever is
higher) for year 2010-2020. The Company filed a Special Leave Petition in the Hon'ble Supreme Court, to appeal against
this order, which has been accepted and is pending for hearing. Meanwhile, PPL filed contempt proceedings for alleged
non-compliance of the order regarding the payment of disputed royalties. In July 2024, Hon'ble Madras High Court
directed the Company to deposit 50% of projected liability as an interim measure. The Company appealed this order
before the Division Bench of the same Court. The Division Bench was pleased to grant an interim stay on the order of
the single judge and is in operation as of date. The Company's appeal was last listed in October 2024. Next hearing date
is yet to be fixed, however stay granted by Hon'ble Division Bench in favour of the Company is in force.
46. CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued equity capital and other equity reserves
attributable to the equity holders of the Company. The Company's objective is to maintain a strong capital base to ensure a
sustainable future growth, maintain a strong credit rating, and to provide adequate returns to the shareholders. The funding
requirements of the Company are not large and are generally met through internal accruals.
The net debt of the Company as at March 31, 2025 is Nil (March 31, 2024 - Nil).
Refer Note 50 for information on ratios.
47. FAIR VALUE
The fair values of financial assets and liabilities are included at the amount at which the instrument can be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
a. Fair value of cash and cash equivalents, other bank balances, trade and other current financial assets, trade and other
payables approximate their carrying amounts due to the short maturities of these instruments. The fair value of the
financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
b. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities - Investment in Mutual funds
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on
observable market data.
48. FINANCIAL RISK MANAGEMENT
The Company's principal financial liabilities comprise lease liabilities, trade and other payables. The main purpose of these
financial liabilities is to finance and support the Company's operations. The Company's principal financial assets include
security deposits, investment in mutual funds, non convertible debentures, bonds, corporate fixed deposits, zero coupon
bond, commercial paper, market linked debentures, trade and other receivables, and cash and cash equivalents that derive
directly from its operations.
The Company's senior management oversees the management of these risks through appropriate policies and procedures in
accordance with Company's policies and risk objectives. The Company's activities expose it to a variety of credit risks, market
risks and liquidity risks. This note explains the sources of risk which the entity is exposed to and how the entity manages the
risk in the financial statements.
a. Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company
is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities,
including investments in debt mutual funds, investment in Corporate fixed deposits, security deposits, investment
in mutual funds, non convertible debentures, bonds, corporate fixed deposits, zero coupon bond, commercial paper,
market linked debentures, balances with banks and foreign exchange transactions.
Trade Receivables
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures
and control relating to customer credit risk management. The Company undertakes a detailed review of the credit
worthiness of clients before extending credit. Outstanding customer receivables are regularly monitored.
Trade receivables consists of a large number of customers. The Company has a credit evaluation policy for each
customer and based on the evaluation, credit limit of each customer is defined.
Total Trade receivables (net of provisions) as on March 31, 2025, is ' 16,318.27 lakhs (March 31, 2024: ' 17,809.40 lakhs).
The Company believes the concentration of risk with respect to trade receivables is low, as its customers are located in
several jurisdictions and industries and operate in largely independent markets.
The Company uses the expected credit loss model as per Ind AS 109 - 'Financial Instruments' to assess the impairment
loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The
provision matrix considers available external and internal credit risk factors and the Company's historical experience
in respect of customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class
of financial assets disclosed in Note 14.
Investments in debt mutual funds, Corporate fixed deposit, balances with banks non convertible debentures, bonds,
zero coupon bond, commercial paper, market linked debentures
Credit risk from balances with banks and investments in debt mutual funds Corporate fixed deposit, balances with banks
non convertible debentures, bonds, zero coupon bond, commercial paper, market linked debentures is managed by the
Company's treasury department in accordance with the Company's policy The Company believes the concentration of
risk with respect to Investment in debt mutual funds, balances with banks and investment in Corporate fixed deposits
is low, as the investments of surplus funds are made only with approved counterparties.
b. Liquidity Risk
Liquidity risk is defined as a risk that the Company will not be able to settle or meet its obligations on time. The
Company's treasury department is responsible for liquidity, funding as well as settlement management. Management
monitors the Company's net liquidity position through rolling forecasts based on expected cash flows. In addition,
processes and policies related to such risks are overseen by the Senior Management.
The Company's principal sources of liquidity are cash and cash equivalents, Investments in mutual funds and the
cash flow generated from operations. The Company believes that the working capital is sufficient to meet its current
requirements. Accordingly, no liquidity risk is perceived.
At the end of the reporting period, the Company held Mutual fund investments of ' 15,166.71 lakhs (March 31,2024
' 26,547.20 lakhs) Corporate fixed deposits ' 1,802.94 lakhs, Non convertible debentures ' 7,738.00 lakhs, Bonds '
2,608.85 lakhs, Zero coupon bonds ' 6,093.26 lakhs, Commercial paper ' 980.72 lakhs, Market linked debentures ' 387.49
lakhs that are expected to readily generate cash inflows for managing liquidity risk
C. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk viz. Currency risk, Interest rate risk and other Price risk such
as equity Price risk and commodity risk.
The Financial instruments affected by market risk include investments in mutual fund. The analysis excludes the impact
of movements in market variables on: the carrying values of gratuity and other post retirement obligations, provisions.
Foreign Currency risk
Foreign currency risk arises due to the fluctuations in foreign currency exchange rates. The Company does not have any
material transactions in foreign currencies. Accordingly, its exposure to the foreign currency risk is limited.
49. Exceptional items consist of the following:
During the previous year ended March 31, 2024, the Ministry of Information and Affairs (MOIA) declared the results of the
frequency bidding and the Company was awarded the license to operate the Entertainment Radio Channel Frequency for
a period of five years. Also, in the previous year, the Company had advanced an interest bearing loan to M.B.W amounting
to ' 154.00 lakhs (given for payments in relation to license fees for erstwhile contract with MOIA). Basis the recoverability
assessment of the loan and its investment in M.B.W, the Company recognised an impairment provision of ' 22.43 lakhs and
recorded a reversal of excess provision for onerous liabilities (net) of ' 76.95 lakhs. On a net basis, recording a write back of
' 54.52 lakhs as an exceptional item.
d. The decrease in Net profit ratio is mainly on account of reduction in profit as compared to the previous year.
e. The decrease in Return on capital employed is mainly on account of reduction in profit before tax and finance cost as
compared to the previous year.
51. BUSINESS TRANSFER AGREEMENT (BTA) WITH GAMMA GAANA LIMITED:
Gamma Gaana Limited (GGL), a fellow subsidiary of the Company was engaged in the business of licensing music audio
content and hosting and streaming such music audio content in different languages through applications dedicated to
online music streaming under the name 'Gaana'.
The Board of Directors of the Company on October 20. 2023, approved the execution of the Business Transfer Agreement
('BTA') with GGL (a party under common control) for acquisition of the business undertaking of GGL relating to the business
of licensing music audio content and hosting and streaming services under the name -'Gaana', on a going concern basis
through a slump sale.
The Company completed execution of the above BTA on December 1, 2023, at a purchase consideration of ' 25 lakhs. Further,
as per Appendix C to Ind AS 103, Business Combinations, the financial information for the comparative period, was restated
to include the financial information from the earliest period for the acquired business and presented.
The financial information of the acquired business for the comparative period upto November 30, 2023, was incorporated in
the financial statements and is presented below:
52. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM
During the year ended March 31, 2025 and previous year ended March 31, 2024, the Company has not advanced or loaned or
invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that
the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or
(ii) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
53. DISCLOSURE OF TRANSACTIONS WITH STRUCK OFF COMPANIES.
The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act,
2013 or Section 560 of Companies Act, 1956 during the year ended March 31, 2025 and previous year ended March 31, 2024.
54. The Company did not have any transactions to report against the following disclosure requirements as notified by MCA
pursuant to amended Schedule III:
(a) Crypto currency or virtual currency
(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
(c) Relating to borrowed funds:
i. Willful defaulter
ii. Utilisation of borrowed funds & share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in Utilisation of borrowings
55. DISCLOSURE IN RELATION TO UNDISCLOSED INCOME
During the year ended March 31,2025 and previous year ended March 31, 2024, the Company has not surrendered or disclosed
any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions
of the Income Tax Act, 1961). Accordingly, there are no transaction which are not recorded in the books of accounts.
56. There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory
period.
57. The Company has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companie
(Restriction on number of layers) Rules, 2017.
58. The Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets or both
during the current or previous year.
59. The Company has not entered into any scheme or arrangement which has an accounting impact on current or previous
financial year.
60. The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in the favour of the lessee), are held in the name of the Company.
61. Audit trail reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended)
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which
uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature
of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along
with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses the accounting software SAP for maintaining books of account. During the year ended 31 March 2025
and 31 March 2024, the Company had not enabled the feature of recording audit trail (edit log) at the database level for
the said accounting software to log any direct data changes on account of recommendation in the accounting software
administration guide which states that enabling the same all the time consume storage space on the disk and can impact
database performance significantly. The users of the Company do not have any access to database Ids with DML (Data
Manipulation Language) authority which can make direct data changes (create, change, delete) at database level. Audit trail
(edit log) is enabled at the application level as part of standard SAP framework and the Company's users have access to
perform transactions only from the application level.
62. Figures of the previous year (other than impact explained in Note 51) have been regrouped and/or reclassified wherever
considered necessary. The impact, if any, are not material to the financial statement.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants Entertainment Network (India) Limited
Firm Registration No.: 001076N/N500013
Ashish Gupta Vineet Jain N. Subramanian
Partner Chairman Non-Executive Director
Membership No. 504662 [DIN: 00003962] [DIN: 03083775]
Yatish Mehrishi Sanjay Ballabh Mehul Shah
Manager and Chief Executive Officer Chief Financial Officer EVP Compliance and Company Secretary
[Membership No. FCS: 5839]
Place : Mumbai Place : Mumbai
Dated : May 16, 2025 Dated : May 16, 2025
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