| 1 Contingent Liabilities
Particulars 31 March 2013 31 March 2012
Bank Guarantees 1,109.93 1,466.44
Claims against the company
not acknowledged as debt 115.45 44.26
Disputed Service tax demand
(excluding penal interest) 1,396.85 1,413.31
Disputed Income tax demand 31.66 11.65
Disputed VAT 2.57
Disputed Stamp duty 6.70 6.70
Disputed Sales tax 68.04
2,728.63 2,944.94
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 fnancial conditions, results of
operations or cash fows.
2 In the previous year, based on the judgments of the Hon'ble Bombay
High Court in the case of IPRS v/s Music Broadcast Private Limited and
Delhi High Court in the case of IPRS v/s Aditya Pandey, whereby it was
held that performance royalty is not payable on a mere broadcast of
original sound recordings by FM Radio Broadcasters, the company has not
provided performance royalty for the period April 2011 to March 2012
amounting to Rs. 346.60 lakh (Rs. 104.97 lakh for quarter ended 31 March
2012) Further the company for earlier years, has written back
performance royalty of Rs. 2113.18 lakh during the period 1 April, 2011
to 31 March 2012 (Rs. 20.68 lakh for the quarter ended 31 March 2012).
Divisional Bench of Delhi High Court also upheld the judgement of
single bench in the matter of IPRS v/s Aditya Pandey. The Company was
paying performance royalties under mistaken belief of law and has
obtained a legal opinion whichbacks the judgment.
The Company has fled Declaratory Suits in the High Courts at Mumbai and
Delhi and also Applications for refund of performance royalty before
the Copyright Board for the respective Rightholders/Copyright
Societies. The matter is subjudice.
3 Other Commitment
Company has issued letter of fnancial support to some of its wholly
owned subsidiaries.
In view of loss during the year, the Company has not created Debenture
Redemption Reserve in terms of Section 117 (C) of the Companies Act,
1956. The Company shall create such reserve out of proft, if any in
future years.
4 Employee Stock Option Scheme (ESOS)
During the period ended September 30, 2010 the Company had introduced
Employee Stock Option Plan, under which it had granted 2,018,000
options under Plan A to the eligible employees of the Company on the
basis of their performance and other eligibility criteria. ESOS Plans
are administered through an ESOS Trust. The vesting of the Options is
on the expiry of one year and so on from the date of grant as per Plan.
In respect of Options granted the accounting value of Options (based on
market price of the share on the date of the grant of option) is
accounted as deferred employee compensation, which is amortised on a
straight line basis over the vesting period. Each Option entitles the
holder thereof to apply for and be allotted/transferred one Equity
Share of the Company of Rs. 5 each upon payment of the exercise price
during the exercise period. The Company has established a Trust for the
implementation and management of ESOS for the beneft of its present and
future employees. Advance of Rs. 1,659.04 lakh (Previous year Rs. 1,659.17
lakh) has been granted to the Trust. Rs. 1,661.38 lakh (Previous year Rs.
1,661.38 lakh) has been utilised by the trust for purchasing 2,017,997
(Previous year: 2,017,997) Equity Shares upto March 31, 2013. The fair
value of the options granted was estimated on the date of grant using
the Black Scholes Model valued by a valuer with the following
assumptions:
5 Disclosure of Segment Reporting under AS 17
As per Accounting Standard on Segment Reporting, Segment information
has been provided in the notes to consolidated fnancial statements.
6 Disclosure of Related Party under AS 18 Parties where control exists
Subsidiary Companies
Reliance Television Private Limited Cinestar Advertising Private
Limited Big Magic Limited (w.e.f. 19 April, 2011) RBN US LLC (w.e.f. 18
June, 2012)
Step down Subsidiary Company
BIG RTL Broadcast Private Limited (upto 30 July, 2012) Reliance TV US
LLC (w.e.f. 18 June, 2012 upto 28 March, 2013) Georgeville Television
LLC (w.e.f. 24 August, 2012 upto 28 March, 2013)
Joint Venture of the Subsidiary Company
BIG CBS Networks Private Limited
BIG RTL Broadcast Private Limited (w.e.f. 31 July, 2012)
Associate of Subsidiary Company
Reliance TV US LLC (w.e.f. 29 March, 2013)
7 Lease disclosure under AS 19
The Company has taken various offce 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.
8 Acquisition of Out of Home division of Reliance Big Entertainment
Private Limited
The Company has acquired Out-of-Home division of Reliance Big
Entertainment Private Limited on 31 August, 2012 with effect from 01
April, 2012 and goodwill of Rs. 577.64 lakh has been recognised as an
intangible assets and amortised over a period of fve years as per
Accounting Standard (AS) 14 - "Accounting for Amalgamations".
9 Incorporation of wholly owned subsidiary
RBN US LLC was incorporated as a wholly owned subsidiary of the Company
on 18 June, 2012. Reliance TV US LLC was incorporated as a subsidiary
of RBN US LLC with 65% holding on 18 June, 2012. Reliance TV US LLC has
acquired 81% of Georgeville Television LLC on 24 August 2012 .
Subsequently 19% of holding in Reliance TV US LLC was sold by RBN US
LLC on 29 March, 2013.
10 During the year RTL Group Beheer B.V., Netherlands has subscribed
15,523,810 numbers of equity shares representing 50% holding in the
step down subsidiary Big RTL Broadcast Private Limited on 31st July,
2012. Consequent upon this acquisition Big RTL Broadcast Private
Limited has become a Joint Venture entity of Wholly owned subsidiary
Cinestar Advertising Private Limited on and from the said date.
11 Asset held for sale
During the year, the company has obtained ownership of one fat from one
of the customer as a consideration against outstanding receivables.
Thus, on 31 March 2013 the Company now holds two fats from two
customers and these fats have been held for sale.
12 The Company has equity investments aggregating to Rs. 5,630.96 lakh
(Previous year Rs. 5,351.26 lakh) in four wholly owned subsidiaries, and
an amount of Rs. 18,768.31 lakh (Previous Year Rs. 7,197.71 lakh) advanced
as interest free loan as on March 31, 2013. One of the said
subsidiaries ( Big Magic Limited) continues to show a negative
net-worth as on 31 March 2013. The Company as a test of other than
temporary diminution in its investment and impairment of loans advanced
to the said subsidiary, had appointed a valuer to assess the position
of its exposure in the said subsidiary company. The equity interest in
the said subsidiary, as assessed by a valuer, based on business plans,
supports the carrying value of such investment and loan outstanding.
The Company continues to provide fnancial support to subsidiary's
operations to further such business plans.
Accordingly, the fnancial statements of the subsidiary company have
been prepared on "Going Concern" basis and no provision is considered
necessary at this stage in respect of its investments and loans
outstanding from the said subsidiaries of the company at the year end.
13 Pursuant to the approval of the Shareholders in the Extraordinary
General Meeting held on September 25, 2010, the Company on September
30, 2010, has allotted 12,950,000 equity shares of Rs. 5/- each fully
paid up to various investors and 20,375,000 equity shares of Rs. 5/- each
fully paid up to the Promoter Group, at a price of Rs. 85/- (including a
premium of Rs. 80/-) per equity share. The details of funds raised
through Preferential Allotment (PA) and utilisation of said funds are
as follows:
14 Previous year's fgures have been regrouped / reclassifed wherever
necessary to correspond with the current year's classifcation /
disclosure.
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