INDEPENDENT AUDITOR S REPORT TO, THE MEMBERS OF CINESTAR … · CINESTAR ADVERTISING PRIVATE...

INDEPENDENT AUDITOR’S REPORT

TO, THE MEMBERS OF CINESTAR ADVERTISING PRIVATE LIMITED Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of CINESTAR ADVERTISING PRIVATE LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the 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 provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of 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. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into accounts the provisions of the Act, the accounting and auditing standards and matters which required to be included in audit report under the provision of the act and the rules made there under. We conducted our audit 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 financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. 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. In making those risk assessments, the auditor considers internal Financial control relevant to the Company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the 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 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, 2015, and its loss and its cash flow for the year ended on that date. Emphasis of Matter We draw attention to Note no. 29 which describes that the Company’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. Considering the matters set out in the said note, this financial statement is prepared on a going concern basis. Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor’s Report) Order, 2015(“the Order”), issued by Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2015, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 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 purpose 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 the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rule, 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 written representation received from the directors as on 31st March, 2015 taken on record

by the Board of Directors, none of the director is disqualified as on 31st March, 2015 from being appointed as director in terms of Section 164 (2) of the Act.

g) 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 explanation given to us:

i) The Company does not have any pending litigations which would impact the financial

position.

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 Pathak H.D. & Associates Chartered Accountants Firm Registration No. 107783W

Vishal D. Shah Partner Membership No. 119303 Place: Mumbai Date: 27 August, 2015

CINESTAR ADVERTISING PRIVATE LIMITED ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

i) The Company does not hold any fixed assets, thus paragraph 3(i) of the order is not applicable.

ii) The Company does not hold any inventories, thus paragraph 3(ii) of the order is not applicable.

iii) According to the information and explanations given to us, the Company has granted unsecured loans to its associate company covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans:

a) The loan given is interest bearing. The loan given and interest thereon is repayable on demand.

b) There is no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year end.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the sale of goods. During the year, there is no purchase of inventory, purchase of fixed assets and sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v) According to information and explanations given to us, the Company has not accepted any deposit

during the year.

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 value added tax, service tax, income tax (tax deducted at

source), cess and any other material statutory dues, as applicable, have been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of provident fund, employees’ state insurance, profession tax, sales tax,wealth tax, duty of customs and duty of excise. There were no undisputed outstanding statutory dues , including value added tax, service tax, income tax (tax deducted at source), cess and any other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of service tax or value added tax or income tax (tax deducted at source) which have not been deposited on account of any dispute other than the following:

c) There were no amounts required to be transferred to investor education and protection fund in

accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

Name of statute Nature of the dues

Period to which the amount relates

Forum where dispute is pending

Amount (in Rs.)

Income Tax Act, 1961 Tax deducted at source

2010-11 to 2013-14 Commissioner of Income Tax

34,170

viii) The accumulated losses of the Company at the end of the financial year are more than fifty per cent of its net worth. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix) The Company has not borrowed money from any financial institution or bank, thus the provision

of paragraph 3(ix) of this order does not apply to the company. The Company has not issued any debentures.

x) The company has not given any guarantee for loans taken by others from bank or financial

institutions. xi) In our opinion and according to the information and explanations given to us, the term loans have

been applied by the Company during the year for the purposes for which they were obtained.

xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Pathak H.D. & Associates Chartered Accountants Firm Registration No. 107783W

Vishal D. Shah Partner Membership No. 119303 Place: Mumbai Date: 27 August, 2015

Balance Sheet as at 31 March 2015

(Currency: Indian Rupees) - -

As at As at

31 March 2015 31 March 2014

EQUITY AND LIABILITIES

Shareholder's Funds

Share Capital 2 185,580 185,580

Reserves and Surplus 3 (487,559,378) 78,275,298

(487,373,798) 78,460,878

Non-Current Liabilities

Long-term borrowings 4 700,421,231 356,030,436

Other long term liabilities 5 80,068,678 -

Current Liabilities

Trade payables 6 1,835,474 39,693

Other current liabilities 7 52,656,182 137,860

Short-term provisions 8 - 5,785

54,491,656 183,338

Total 347,607,767 434,674,652

ASSETS

Non-current assets

Non-current investments 9 - 409,228,259

Long term Loans & advances 10 505,481 -

Current assets

Cash and cash equivalents 11 187,135 775,364

Short-term loans and advances 12 343,801,509 14,671,029

Other current assets 13 3,113,642 10,000,000

347,102,286 25,446,393

Total 347,607,767 434,674,652

The accompanying Notes are an Integral part of the financial statements 1 to 30

As per our report of even date

For Pathak H.D. & Associates For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration No.: 107783W

Vishal D. Shah Gaurav Dattani Gayatri Shroff

Partner Director Director

Membership No.: 119303

Place: Mumbai

Date: 27 August, 2015

CINESTAR ADVERTISING PRIVATE LIMITED

Notes Particulars

(Currency: Indian Rupees)

For the year

ended

For the year

ended 31 March 2015 31 March 2014

Income

Income from Operations 14 15,480,000 -

Other Income 15 6,202,501 -

Total Revenue (I) 21,682,501 -

II. Expenses

Direct Cost 16 15,528,000 -

Finance Cost 17 84,089,478 33,798

Other expenses 18 13,677,225 169,821

Total Expenses 113,294,703 203,619

III. (Loss) before Exceptional Items (I-II) (91,612,202) (203,619)

IV. Exceptional Item 19 474,228,259 -

V. (Loss) before tax (I-II) (565,840,461) (203,619)

VI. Tax expense

(Excess) provision for tax relating to prior years (5,785) -

(Loss) for the year (565,834,676) (203,619)

Earning per equity share [Nominal Value per share Rs. 10]

Basic (in Rs.) 26 (30,490.07) (10.97)

Diluted (in Rs.) 26 (30,490.07) (10.97)

The accompanying Notes are an Integral part of the financial statements 1 to 30

As per our report of even date

For Pathak H.D. & Associates For and on behalf of the Board of Directors






Place: Mumbai


Notes Particulars


Statement of Profit and Loss for the year ended 31 March 2015


For the year ended For the year ended

31 March 2015 31 March 2014 CASH FLOW FROM OPERATING ACTIVITIES

Net (loss) before taxes (565,840,461) (203,619)

Adjustments for:

Interest Income (6,202,501) -

Interest Expense 84,089,478 33,798

Provision for diminution in the value of investments 474,228,259 -

Operating profit/ (loss) before working capital changes (13,725,225) (169,821)

Adjustments for changes in working capital:

Increase in Loans and Advances (319,155,480) (7,193,419)

Increase in Liabilities and Other Payables 15,185,603 25,500

Cash generated from operations (317,695,102) (7,337,740)

Taxes Paid (474,696) -

Net cash generated from / (used in) operating activities (A) (318,169,798) (7,337,740)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments (65,000,000) (108,749,995)

Interest Income 3,088,859

Net cash generated from / (used in)investing activities (B) (61,911,141) (108,749,995)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Long term borrowings 401,500,000 171,481,231

Repayment of Long term borrowings (22,000,000) (55,300,000)

Interest Paid (7,290) (33,798)

Net cash generated from / (used in) financing activities (C) 379,492,710 116,147,433

Net (decrease)/ increase in cash and cash equivalents (A + B + C) (588,229) 59,698

Cash and cash equivalents at beginning of the year 775,364 715,666

Cash and cash equivalents at end of the year 187,135 775,364

As per our report of even dateFor Pathak H.D. & Associates For and on behalf of the Board of Directors






Place: Mumbai



Cash Flow Statement for the year ended 31 March 2015

Notes to financial statements for the year ended 31 March 2015


1. Summary of significant accounting policies

i Basis of preparation

ii Use of estimates

iii Fixed assets

iv Depreciation/ Amortisation

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.

v Miscellaneous Expenditure and Preoperative Expenses

vi Impairment

vii Investments

viii Revenue recognition

Sales are recognised when significant risks and rewards of ownership of goods have passed to the

buyer which coincides with delivery.

Interest income is recognised on a time proportion basis.

ix Foreign currency transactions


Expense relating to incorporation of the Company and preoperative expenses are charged off in the year of

expenses.

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.

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.

The gross block of fixed assets is stated at cost of acquisition or construction, including any cost attributable in

bringing the assets to their working condition for their intended use.

The preparation and presentation of financial statements requires estimates and assumptions to be made that

affect the reported amount of assets and liabilities and disclosures of contingent liabilities as on date of the

financial statements and reported amount of revenue and expenses during the reporting period. Difference

between the actual results and estimates is recognised in the period in which the results are known /

materialized.

The Company assesses at each balance sheet date whether there is any indication that an asset may be

impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such

recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is

less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is

treated as an impairment loss and is recognised in the Statement of Profit and Loss.

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.

Revenue from services provided are recognized when persuasive evidence of an arrangement exists, the

consideration is fixed or determinable and it is reasonable to expect ultimate collection. Such revenues are

recognized as the services are provided.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at

the closing exchange rates on that date; the resultant exchange differences are recognised in the Statement of

profit and loss.




x 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.

xi Earning Per Share

xii Taxation

xiii Provisions and contingencies

Income 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.

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 period. 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 period, unless issued at a later date.

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.

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.

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.

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.

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.


2. Share Capital

As at As at

31 March 2015 31 March 2014

Authorised Share Capital

1,00,000 (Previous Year: 100,000) Equity Shares of Rs. 10/- each 1,000,000 1,000,000

4,50,000 (Previous Year: 4,50,000) Preference Shares of Rs. 10/- each 4,500,000 4,500,000

5,500,000 5,500,000

Issued, Subscribed and Paid Up Share Capital

Equity Share Capital

18,558 (Previous Year: 18,558) Equity Shares of Rs. 10/- each, fully

paid up 185,580 185,580

185,580 185,580

a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

Equity Shares

No. of Shares Rs. No. of Shares Rs.

At the beginning of the year 18,558 185,580 18,558 185,580

Issued during the year - - - -

Outstanding at the end of the year 18,558 185,580 18,558 185,580

b. Terms/rights attached to equity shares

c. Details of shareholders holding more than 5% shares of the Company and shares held by the holding Company

No. of Shares Percentage of

holding No. of Shares

Percentage of

holding

Equity shares of Rs. 10 each fully paid

Reliance Broadcast Network Limited and its nominee 18,558 100% 18,558 100%

(Holding Company)

3. Reserves and Surplus

As at As at

31 March 2015 31 March 2014

Securities Premium Account

As per last Balance Sheet 85,495,420 85,495,420

(Deficit) in the statement of Profit and Loss

As per last Balance Sheet (7,220,122) (7,016,503)

Add: (Loss) for the year (565,834,676) (203,619)

(573,054,798) (7,220,122)

Total Reserves and Surplus (487,559,378) 78,275,298

As at

31 March 2014 31 March 2015

As at

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. 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 the 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.

31 March 2015

As at



31 March 2014

As at




4. Long Term Borrowings

Current Non-Current Current Non-Current

Unsecured

Loan from related party (Refer Note below, note 7 & 22) 35,109,205 700,421,231 - 356,030,436

35,109,205 700,421,231 - 356,030,436

Nature and other terms:

Loan from related party is from the Holding Company. It shall be repayable after the end of the term of 4 years from the date of signing of the term

sheet and supplemental term sheet i.e. 30 May, 2011; 1 June,2011; 1 October, 2012 and 10 September, 2014 respectively or the date of

disbursement of loan whichever is later. Interest is charged @19% p.a. w.e.f. April, 2014.

As at As at

31 March 2015 31 March 2014

5. Other Long term liabilities

Interest accrued but not due on borrowings 80,068,678 -

80,068,678 -

6. Trade Payables As at As at

31 March 2015 31 March 2014

Micro, Small and Medium Enterprises (Refer Note 6.1) - -

Others 1,835,474 39,693

1,835,474 39,693

6.1 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:

As at As at

31 March 2015 31 March 2014

- -

- -

- -

- -

- -

- -

- -

7. Other Current Liabilities

As at As at

31 March 2015 31 March 2014

Current Maturitries of Long Term Debt (Refer Note 4) 35,109,205 -

Interest accrued but not due on borrowings 4,013,510 -

Statutory Dues Payable 152,648 10,000

Provision for expenses 149,000 127,860

Other payables (refer note 22) 13,231,819 -

52,656,182 137,860

8. Short term Provisions

As at As at

31 March 2015 31 March 2014

Provision for Tax [Net of Advance Tax Rs. Nil; Previous year: Rs. 59,215/-] - 5,785

- 5,785

As at

31 March 2015

As at

31 March 2014

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.

Particulars

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




9. Non-current Investments

As at As at

31 March 2015 31 March 2014

Investment in Equity Instruments (non-trade, unquoted and at cost)

In Joint Venture Company

Azalia Broadcast Private Limited

Nil (Previous year: 25,880,952) Equity Shares of Rs. 10 each, fully

paid up - 409,228,259

In Associate Company

Azalia Broadcast Private Limited

32,071,427 (Previous year: Nil) Equity Shares of Rs. 10 each, fully

paid up 474,228,259 -

Less: Provision for diminution in the value of investment 474,228,259 -

- -

- 409,228,259

Aggregate amount of unquoted investments 474,228,259 409,228,259

Aggregate provision for diminution in the value of investments 474,228,259 -

10. Long term Loans & advances As at As at

31 March 2015 31 March 2014

Advance tax / Tax deducted at source 480,481 -

Deposit with VAT authorities 25,000 -

505,481 -

11. Cash and Cash Equivalents

As at As at

31 March 2015 31 March 2014

Bank Balance

In Current Accounts 186,757 775,364

Cash on hand 378 -

187,135 775,364

12. Short-term loans and advances

As at As at

31 March 2015 31 March 2014

Unsecured and Considered good

Loans and advances to related party (Refer note 22) 48,801,029 14,671,029

Loans and advances to others 295,000,000 -

VAT Credit receivable 480 -

343,801,509 14,671,029

13. Other Current Assets

As at As at

31 March 2015 31 March 2014

Advance towards share application money - 10,000,000

Interest accrued but not due on loans to related parties 1,816,884 -

Interest accrued but not due on loans to others 1,296,758 -

3,113,642 10,000,000




14. Income from operations

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Sale of goods 15,480,000 -

15,480,000 -

15. Other Income

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Interest income on loans and advances 6,202,501 -

6,202,501 -

16. Direct Cost

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Purchases of stock-in-trade (traded goods) 15,528,000 -

15,528,000 -

17. Finance Cost

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Interest 84,089,478 33,798

84,089,478 33,798

18. Other Expenses

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Bank Charges 2,390 -

Payment to Auditor (Refer note below) 114,000 112,360

Legal and Professional Fees 13,550,228 57,461

Other Miscellaneous Expenses 10,607 -

13,677,225 169,821

Payment to auditor (including service tax)

For the year

ended

For the year

ended

31 March 2015 31 March 2014

As auditor:

Audit fee 114,000 112,360

114,000 112,360

19. Exceptional item

For the year

ended

For the year

ended

31 March 2015 31 March 2014

Provision for diminution in the value of investments 474,228,259 -

474,228,259 -

Note:

The company has equity investment of Rs. 474,228,259/- in Azalia Broadcast Private Limited (ABPL). During the year, the company has terminated

the joint venture agreement with RTL Group Beheer B.V., Netherlands. Consequent upon this termination, ABPL has become an associate of the

company. ABPL has scaled down its operations significantly. The company on a prudent basis, has made a provision of Rs. 474,228,259/- for the

said invesment in the current year.




20 Contingent Liabilties

Particulars 31 March 2015 31 March 2014

Income Tax demand (Tax deducted at source) 34,170 -

34,170 -

21 Disclosure of Segment Reporting under AS 17

As per requirement of Accounting Standard 17 (AS - 17) 'Segment Reporting' notified in the Companies (Accounting)

Standard Rules, 2006, the company operates in Single business segment of Trading of goods. It also operates in a single

reportable geographical segment viz. India, since all its customers are located in India.

22 Disclosure of Related Party under AS 18

Ultimate Holding Company

Reliance land Private Limited (w.e.f. 20 March, 2015)

Holding Company

Reliance Broadcast Network Limited

Associate Company

Azalia Broadcast Private Limited (formerly known as BIG RTL Broadcast Pvt. Ltd.) (W.e.f 12th June 2014)

Joint Venture Company

Azalia Broadcast Private Limited (formerly known as BIG RTL Broadcast Pvt. Ltd.) (Upto 11th June 2014)

Fellow Subsidiary Companies

Reliance Television Private Limited

Big Magic Limited

RBN US LLC (w.e.f 18 June, 2012)

Subsidiary/Step Down Subsidiary Companies of Fellow Subsidiary Companies

Reliance TV US LLC (w.e.f 25 March, 2014)

Georgeville Television LLC (w.e.f 25 March, 2014)

Azalia Distribution Private Limited (w.e.f 21 December, 2013)

GVTV DevCo LLC (w.e.f. 2 October, 2014)

Joint Venture of Fellow Subsidiary Company

Azalia Distribution Private Limited (upto 20 December, 2013)

Associate of Fellow Subsidiary Company

Reliance TV US LLC ( Upto 24 March, 2014)

Significant Shareholders, Key Management Personnel and their relatives

Relationship Name of the Related party Remarks

Key Managerial Personnel Asheesh Chatterjee Director up to 4 February, 2015

Key Managerial Personnel Tarun Katial Director up to 4 February, 2015

Key Managerial Personnel Gaurav Dattani Director w.e.f. 5 February, 2015

Key Managerial Personnel Gayatri Shroff Director w.e.f. 5 February, 2015

Entities over which Key Managerial Personnel has control:

BIG Magic Limited

Entities on which relatives of Key Managerial Personnel has Control: Nil




Transactions with Related Parties:

31 March 2015 31 March 2014

Holding Company

Reliance Broadcast Network Limited

Loan Taken

Opening Balance 356,030,436 239,849,205

Taken during the year 401,500,000 171,481,231

Repaid during the year 22,000,000 55,300,000

Closing Balance 735,530,436 356,030,436

Reimbursement of Expenses paid 1,573,288 -

Interest Expense 84,082,188 -

Closing Balance

Interest payable 84,082,188 -

Other Payables 1,767,747 -

Associate Company

Azalia Broadcast Private Limited (formerly known as BIG RTL Broadcast Private Limited)

Subscription of Equity Shares 65,000,000 -

Loan Given

Opening Balance 14,671,029 -

Given during the year 35,930,000 -

Received back during the year 1,800,000 -

Closing Balance 48,801,029 -

Interest Income 1,795,162

Interest Receivable 1,816,884 -

Provision for dimunition in value of Investments 474,228,259 -

Closing Balance

Investment in Equity Shares (net of Provision of Rs 474,228,259; previous year Rs Nil) - -

Joint Venture

Azalia Broadcast Private Limited (formerly known as BIG RTL Broadcast Private Limited)

Subscription of Equity Shares - 108,749,995

Advance towards share application money - 10,000,000

Loan Given

Opening Balance - 17,477,610

Given during the year - -

Received back during the year - 2,806,581

Closing Balance - 14,671,029

Interest Income 21,722 -

Closing Balance

Investment in Equity Shares - 409,228,259

Fellow Subsidiary

Reliance Television Private Limited

Reimbursement of Expenses paid 11,776,272 -

Closing Balance

Other Payables 13,231,819

Particulars




23 Deferred Tax

Deferred Tax Assets on account of brought forward losses has not been recognised as a matter of prudence.

24 Loans and advances in the nature of loans given to Associate/ Joint Venture:

Particulars Maximum

Balance during

the year

31 March 2015 31 March 2014

Azalia Broadcast Private Limited Loan 17,477,610 - 14,671,029

Azalia Broadcast Private Limited Loan 50,601,029 48,801,029 -

(a) Loans and advances shown above, to joint venture/ associate fall under the category of unsecured loans and advances,

repayable on demand.

(b) Loans to employees as per Company's policy are not considered.

(c ) The above loans given to Companies are for "General Business Purpose".

25 Details of loans given, Invetsment made and guarantees given covered under section 186(4) of The Companies Act, 2013.

Loans and advances in the nature of loan:

Particulars

Given

during the

year

Maximum

Balance during

the year

31 March 2015 31 March 2014

Azalia Broadcast Private Limited Loan 35,930,000 50,601,029 48,801,029 -

Business Broadcast News Private Limited Loan 295,000,000 295,000,000 295,000,000 -

a).The above loans given to Companies are for "General Business Purpose".

b) Refer note no. 22 & 23 for the loans given during the year to associate/ joint venture companies.

26 Earnings Per Share (‘EPS’)

31 March 2015 31 March 2014

Net (loss) available for equity shareholders (565,834,676) (203,619)

Weighted average number of equity shares outstanding during the year 18,558 18,558

Basic/ Diluted Earnings Per Share (30,490.07) (10.97)

Nominal value per share 10 10

Particulars

Name of the Company

Loans and advances in the nature of loans

given to Joint Venture:

Loans and advances in the nature of loans

given to Associate:

Name of the Company




27 Interest in Joint Venture

The Company's interest in jointly controlled entity:

Name of Joint Venture Country of Ownership Interest Ownership Interest

Incorporation 31 March 2015 31 March 2014

Azalia Broadcast Private Limited India 50% * 50%

Details of Joint Venture

Particulars 31 March 2015 * 31 March 2014

I Assets

1 Non-current assets

i Fixed assets

Tangible assets - 1,212,812

Intangible assets - 75,899

ii Long-term loans and advances - 3,493,270

2 Current assets - -

Inventories - 25,672,596

Trade receivables - 7,077,538

Cash and bank balances - 10,621,732

Short-term loans and advances - 41,484,250

II Liabilities - -

1 Shareholder's fund - reserves and surplus - (235,360,781)

2 Non-current liabilities -

Long-term provisions - 45,278

Current liabilities - -

Short-term borrowings - 7,335,514

Trade payables - 46,562,951

Other current liabilities - 2,232,977

Short-term provisions - 12,639

III Income

1 Income from Media Operations 1,692,232 10,908,860

2 Other Income 238,715 765,807

IV Expenses

1 Employee benefits expense 1,278,165 10,459,974

2 Depreciation and amortization expense 35,129 3,900,312

3 Finance Costs 10,861 -

4 Other Expenses 20,669,693 145,744,091

4 Loss before Taxation (20,062,900) (148,429,710)

Provision for Tax (including deferred tax) - -

Loss After Tax (20,062,900) (148,429,710)

V Other Matters

1 Contingent Liabilities

2 Capital and other commitments Nil Nil

Nil Nil

* During the current year, the joint venture compay ceased to be a joint venture of the Company on 11 June, 2014

and became an associate of the company w.e.f. 12 June, 2014.

28

29 The Company’s net worth has eroded. The Company continues to get financial support from the ultimate holding Company and has

also been assured of such assistance in future. In view of the fact that the ultimate holding Company has also incurred losses, the

going concern assumption for the Company is dependent on the ability of the ultimate holding Company to raise adequate funds. As

the management of the ultimate holding Company is hopeful of being able to raise necessary funds, the Company has prepared its

accounts on going concern basis.

30 Previous year's figures have been regrouped / reclassified wherever necessary to conform with the current year’s

classification / disclosure.

As per our report of even dateFor Pathak H.D. & Associates For and on behalf of the Board of Directors






Place: Mumbai


The Company has given loans & advances to Azalia Broadcast Private Limited (ABPL) amounting to 48,801,029/- bearing interest @

19% p.a.(previous year-interest free loan amounting to Rs. 14,671,029/-).The associate continues to incur losses and net worth has

been substantially eroded as on 31 March 2015. Having regard to financial support from the ultimate holding company of ABPL, no

provision for recoverabiliy of the said advances is considered necessary by the Company.

INDEPENDENT AUDITOR S REPORT TO, THE MEMBERS OF CINESTAR … · CINESTAR ADVERTISING PRIVATE...

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