2.15 Provisions
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows
(when the effect of the time value of money is material).
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it
is virtually certain that reimbursement will be received
and the amount of the receivable can be measured
reliably.
2.16 Insurance claims
Insurance claims are accounted for on the basis of claims
admitted / expected to be admitted and to the extent
that the amount recoverable can be measured reliably
and it is reasonable to expect ultimate collection.
2.17 Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the Company's Financial Statements
requires management to make judgement, estimates
and assumptions that affect the reported amount
of revenue, expenses, assets and liabilities and the
accompanying disclosures. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment to the carrying
amount of assets or liabilities affected in next financial
years.
Property Plant and Equipment/ Intangible Assets
Estimates are involved in determining the cost
attributable to bringing the assets to the location
and condition necessary for it to be capable of
operating in the manner intended by the management.
Property, Plant and Equipment/Intangible Assets are
depreciated/ amortised over their estimated useful
life, after taking into account estimated residual
value. Management reviews the estimated useful life
and residual values of the assets annually in order to
determine the amount of depreciation/ amortisation
to be recorded during any reporting period. The useful
life and residual values are based on the Company's
historical experience with similar assets and take into
account anticipated technological and future risks. The
depreciation/ amortisation for future periods is revised
if there are significant changes from previous estimates.
Recoverability of Trade Receivables
Judgments are required in assessing the recoverability
of overdue trade receivables and determining whether a
provision against those receivables is required. Factors
considered include the credit rating of the counterparty,
the amount and timing of anticipated future payments
and any possible actions that can be taken to mitigate
the risk of non-payment.
Provisions
The timing of recognition and quantification of the
liability (including litigations) requires the application
of judgement to existing facts and circumstances,
which can be subject to change. The carrying amounts
of provisions and liabilities are reviewed regularly
and revised to take account of changing facts and
circumstances.
Fair value measurements and valuation processes
In estimating the fair value of an asset or liability, the
Company uses market-observable data to the extent
it is available. Where level 1 inputs are not available,
the Company engages third party qualified valuers
to perform the valuation. The management works
closely with qualified external valuers to establish the
appropriate valuation techniques and inputs to the
model.
Impairment of Financial and Non-Financial Assets
The impairment provisions for Financial Assets
are based on assumptions about risk of default and
expected cash loss rates. The Company uses judgement
in making these assumptions and selecting the inputs
to the impairment calculation, based on Company's past
history, existing market conditions as well as forward
looking estimates at the end of each reporting period. In
case of non-financial assets, assessment of impairment
indicators involves consideration of future risks.
Further, the company estimates asset's recoverable
amount, which is higher of an asset's or Cash Generating
Units (CGU's) fair value less costs of disposal and its
value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs
of disposal, recent market transactions are taken into
account, if no such transactions can be identified, an
appropriate valuation model is used.
Recognition of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognised for
deductible temporary differences and unused tax losses
for which there is probability of utilisation against the
future taxable profit. The Company uses judgement
to determine the amount of deferred tax that can be
recognised, based upon the likely timing and the level of
future taxable profits and business developments.
Estimation of Defined benefit obligation
The cost of post-employment benefits is determined
using actuarial valuations. The actuarial valuation
involves making assumptions about discount rates,
future salary increases and mortality rates. Due to the
long term nature of these plans, such estimates are
subject to significant uncertainty.
Control and significant influence
Whether the Company, through voting rights and
potential voting rights attached to shares held, or by
way of shareholders' agreements or other factors,
has the ability to direct the relevant activities of the
subsidiaries, or jointly direct the relevant activities of
its joint ventures or exercise significant influence over
associates.
2.18 Operating Cycle
Based on the nature of activities of the Company and
the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company
has determined its operating cycle as 12 months for the
purpose of classification of its assets and liabilities as
current and non-current.
25. Segment information
(i) The Company is engaged mainly in the business of "distribution and promotion of television channels". The Board
of Directors of the Company, which has been identified as being the chief operating decision maker (CODM),
evaluates the Company's performance, allocates resources based on the analysis of the various performance
indicators of the Company as a single unit. Therefore there is no reportable segment for the Company, in
accordance with the requirements of Ind AS 108- 'Operating Segment Reporting', notified under the Companies
(Indian Accounting Standard) Rules, 2015.
(ii) Geographical information
a. The Company is domiciled in India. The amount of its revenue from external customers broken down by
location of customers in stated below:
*Non-current assets exclude non-current financial assets, Deferred tax assets (net) and non-current tax assets
(net).
c. Information about major customers:
A single customer contributed 10.37% to the Company's revenue during the years ended 31st March, 2025
(31st March, 2024 : 8.32%)
26. Employee benefit plans
(i) Defined contribution plans
The Company operates defined contribution retirement benefit plans for all its qualifying employees. Where
employees leave the plans prior to full vesting of the contributions, the contributions payable by the Company
are reduced by the amount of forfeited contributions.
The total expense recognised in profit and loss of Rs. 27.02 million (for the year ended 31st March, 2024: Rs.
26.84 million) for provident fund contributions and Rs. 0.09 million (for the year ended 31st March, 2024: Rs.
0.09 million) for Employee State Insurance Scheme contributions represents contributions payable to these
plans by the Company at rates specified in the rules of the plans. As at 31st March, 2025, contributions of Rs. 4.40
million (as at 31st March, 2024: Rs. 4.51 million) due in respect of year 2024-2025 (year 2023-2024) reporting
period had not been paid over to the plans. The amounts were paid subsequent to the end of the respective
reporting periods.
(ii) Defined benefit plans
Gratuity plan
Gratuity liability arises on retirement, withdrawal, resignation, and death of an employee. The aforesaid liability
is calculated on the basis of 15 days salary (i.e. last drawn salary plus dearness allowance) for each completed
year of service or part thereof in excess of 6 months. Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the
Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.
The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and
salary risk.
f) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary
increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of
the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
i) If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs. 2.88
million (increase by Rs. 3.05 million) [as at 31st March, 2024: decrease by Rs. 2.53 million (increase by Rs. 2.67
million)].
ii) If the expected salary growth increases (decreases) by 0.50%, the defined benefit obligation would increase by Rs.
3.06 million (decrease by Rs. 2.92 million) [as at 31st March, 2024: increase by Rs. 2.69 million (decrease by Rs.
2.57 million)].
29. Financial Instruments
a) Capital Management
The Company's management reviews the capital structure of the Company on periodical basis. As part of this review,
the management considers the cost of capital and the risks associated with each class of capital. The Company
monitors the capital structure using gearing ratio which is determined as the proportion of net debt to total equity.
The capital structure of the Company consists of NIL debt (borrowings - NIL, and offset by cash and bank balances and
current investments in notes 10,8 and 11) and total equity of the Company.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans.
The funding requirements are met through a mixture of equity, internal fund generation, non-current and current
borrowings. The Company's policy is to use non-current and current borrowings to meet anticipated funding
requirements.
(c) Risk management framework
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk
and liquidity risk.
The objective of the Company's risk management framework is to manage the above risks and aims to :
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- provide management with reliable information on the Company's risk exposure
- improve financial returns
(i) Market risk
Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price.
Market risk comprises of three types of risks - interest risk, foreign currency risk, and other price risk such as equity
price risk.
The Company's activities expose it primarily to interest rate risk, currency risk and other price risk such as equity price
risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and
other current financial liabilities.
(ii) Liquidity risk
The Company requires funds both for short-term operational needs as well as for long-term investment needs.
The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening
the balance sheet. The maturity profile of the Company's financial liabilities based on the remaining period from the
date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual
undiscounted cash obligation of the Company.
(iii) Foreign currency risk
Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency
exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and
Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables
denominated in foreign currency.
The carrying amounts of the Company foreign currency denominated monetary assets and monetary liabilities at the
end of the reporting period are as follows :
The results of Company's operations may be affected by fluctuations in the exchange rates between the Indian Rupee
against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange
rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 1% against the functional
currency of the Company.
For the year ended 31st March, 2025 and 31st March, 2024, every 100 basis points depreciation/ appreciation in the
exchange rate between the Indian rupee and U.S. dollar will increase /decrease the Company’s profit before tax by Rs.
0.22 million (31st March, 2024 : Rs. Nil).
(iv) Interest rate risk
The Company is exposed to interest rate risk on fixed deposits outstanding as at the year end. The Company is not
exposed to interest rate risk on current borrowings outstanding at the year end. These exposures are reviewed by
appropriate levels of management on a monthly basis. The Company invests in fixed deposits to achieve the Company's
goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.
The exposure of the Company's financial liabilities as at 31st March, 2025 to interest rate risk is as follows:
(v) Other price risk
The Company is exposed to price risks arising from fair valuation of Company's investment in debt mutual funds.
These investments are held for short term purposes. The sensitivity analysis below have been determined based on
the exposure to debt funds at the end of the reporting year.
If prices had been 100 basis points higher/lower, profit before tax for the year ended 31st March, 2025 would increase/
decrease by Rs. 143.20 million (for the year ended 31st March, 2024: Rs. 160.98 million) as a result of the changes in
fair value of these investments which have been designated as at FVTPL.
(vi) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. The Company's exposure to credit risk primarily arises from trade receivables, balances with banks
and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good
credit ratings. Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on
the financial condition of accounts receivable. The Company's policies on assessing expected credit losses is detailed
in notes to accounting policies.
30. During the year ended 31st March 2019, the Company had allotted on preferential basis 28,14,48,000 equity shares
of Rs.72.66 each at a premium of Rs.62.66 per share aggregating to Rs.20,450.00 million. The proceeds of preferential
allotment amounting to Rs. 20,450.00 million have been invested in mutual funds and fixed deposits, pending
utilisation for the same.
31. The Company has investments of Rs. 5,282.39 million in subsidiaries and associates as on 31st March, 2025. The
Company has made provision for impairment amounting to Rs. 196.06 million till 31st March, 2025 against these
investments in subsidiaries and associates. Management is of the view that this provision is adequate and based on the
projections, the management of the Company expects that these companies will have positive cash flows to adequately
sustain its operations in the foreseeable future and therefore no further provision for impairment is considered
necessary at this stage.
e. Description of the valuation processes used by the Company for fair value measurement categorised within level 3
At each reporting date, the Company analyses the movement in the value of financial assets and liabilities which are
required to be remeasured or reassessed as per the accounting policies. For this analysis, the Company verifies the
major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts
and other relevant documents.
The Company has also compares the changes in the fair value of each financial asset and liability with relevant external
sources to determine whether the changes is reasonable. The Company also discusses of the major assumptions used
in the valuations.
For the purpose of fair value disclosures, the Company has determined classes of financial assets and liabilities
on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
36. There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company.
37. Details of Loan given, Investment made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013
(a) No Loan given by the Company to body corporate as at 31st March, 2025 and 31st March 2024.
(b) Investment made by the Company as at 31st March, 2025 and 31st March 2024 - Refer Note no. 4 & 8.
(c) No Guarantee has been given by the Company as at 31st March, 2025 and 31st March, 2024.
38. The Company has received demand of Rs. 6,278.90 million from the Department of Telecom (DOT) during provisional
assessment towards the license fees for the years 2010-11 to 2015-16 considering revenue from the cable business
and other income for the purpose of calculating AGR or license fees. Demand was initially raised on the Company;
however, revised demand of Rs. 21,565.09 million including interest and penalty calculated up till date has been
raised on Den Broadband Limited (wholly owned subsidiary of the Company) for the years 2011-2012 to 2015¬
2016. In view of management and based on legal opinion obtained, these demands are unenforceable.
The Company has filed various petitions before the Hon'ble TDSAT challenging these demands. In all the petitions,
the Hon'ble TDSAT has restrained DOT from taking any coercive measure for realisation of the demands.
(iv) Lease liabilities carry an effective interest rate of 8.50%. The lease term is of 8 years.
41. Other Statutory Information
(i) There are no balance outstanding on account of any transaction with companies struck off under section 248
of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
(ii) The Company has not advanced or loaned or invested fund to any other persons or entities including foreign
entities (intermediary) with the understanding that intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Company (ultimate beneficiary) or
(b) provided any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(iii) The Company has not received any fund from any person or entities including foreign entities (funding party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(iv) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income tax Act, 1961.
(v) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(vi) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender (as
defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.
(vii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the
Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
42. Previous year figures have been regrouped / rearranged wherever necessary to make them comparable.
43. The standalone financial statements were approved for issue by the Board of Directors on 23rd April, 2025.
In terms of our report attached
For Chaturvedi & Shah LLP For and on behalf of the Board of Directors of
Chartered Accountants DEN NETWORKS LIMITED
Firm Registration Number : 101720W/W100355
Vijay Napawaliya Sameer Manchanda Saurabh Sancheti Naina Krishna Murthy Anuj Jain
Partner Chairman and Non-Executive Director Non-Executive Director Independent Director Non-Executive Director
Membership No. 109859 DIN : 00015459 DIN : 08349457 DIN : 01216114 DIN : 08351295
Geeta Kalyandas Fulwadaya Rahul Yogendra Dutt S.N. Sharma Satyendra Jindal
Non-Executive Director Independent Director Chief Executive Officer Chief Financial Officer
DIN : 03341926 DIN : 08872616
Rajendra Dwarkadas Hingwala Achuthan Siddharth Hema Kumari
Independent Director Independent Director Company Secretary
Date : 23rd April, 2025 DIN : 00160602 DIN : 00016278 M.No. : F8087
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