Corporate Information

Next Mediaworks Limited (‘the Company’) is a public Company domiciled in India and incorporated under the provisions of Companies Act, 1956.

The company stock is listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

These financial statements were approved for issue by the Company’s Board of Directors on May 8, 2018.

a Terms / rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends 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 the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

1 SEGMENT REPORTING

In accordance with Ind AS-108 ‘Operating Segments’, the Company’s business segment is providing management consultancy in India and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liabilities, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as at and for the year ended March 31, 2018. The Company primarily caters to the domestic market and hence there are no reportable geographical segments.

2 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

(A) Contingent Liabilities

a. Corporate guarantee issued to banks for Company’s Subsidiary amounting to Rs. 9,500 lakhs (previous year Rs. 9,300 lakhs and as at April 1, 2016 Rs. 9,300 lakhs) for term loan Cash Credit limit facility availed by the subsidiary.

b. In respect of Income Tax demand under dispute Rs. 193.11 lakhs (Previous Year Rs. 193.11 lakhs, as at April 1, 2016 Rs. 265.54 lakhs) against the same the company has paid tax under protest of Rs. 40.46 lakhs (previous year Rs. 40.46 lakhs, as at April 1, 2016 Rs. 40.46 lakhs).

(B) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account is Rs. Nil (Previous Year)

3 DEFERRED TAX

In the absence of reasonable certainty, the Company has not recognised the deferred tax assets (net) amounting to Rs. 234.65 lakhs (Previous year Rs. 150.61 lakhs and as on April 1, 2016 Rs. 74.83 lakhs) arising out of tangible and intangible assets, financial assets, unabsorbed depreciation, brought forward tax losses and other items. the same shall be reassessed at subsequent balance sheet date.

4 RELATED PARTY DISCLOSURES

Names of related parties and related party relationship

a. Subsidiary Companies - Next Radio Limited

One Audio Limited

Digital One Private Limited

Next Outdoor Limited

Syngience Broadcast Ahmedabad Limited

(Subsidiary of Next Radio Limited)

b. Under control of Management - Next Publishing Services Private Limited

Mid-Day Exports Private Limited Inquilab Offset Printers Limited Ferari Investments and Trading Co Private Limited Meridian Holding & Leasing Co Private Limited

c. Key Managerial Personnel - Mr. Tarique Ansari, Managing Director

Mr. Mandar Godbole (till November 24, 2017 )

Mr. Gaurav Sharma (from February 13, 2018)

Mr. Ismail Dabhoya, CFO

d. Independent Directors - Adille Sumariwalla

Dilip Cherian I Venkat

Ms.Monisha Shah Rajbir Singh Bhandal Sunil Dalal

5. EMPLOYEE BENEFITS

The Company has classified the various benefits provided to the employees as under.

a. Defined Benefit Plans Provident Fund

The Company has recognized Rs. 5.72 lakhs in Statement of Profit and Loss towards employer’s contribution to provident fund.

b. Defined Benefit Plans

i. Contribution to Gratuity Fund (Funded Scheme)

The Company has invested in HDFC GROUP Unit Linked Plan- Option A through trust “MidDay Multimedia Ltd Employees Group Gratuity Cum Life Assurance Scheme.

ii. Leave Encashment (Non-funded Scheme)

In accordance with the Ind AS 19, actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:

The expected rate of return on plan assets is based on market expectation at the beginning of the year. The rate of return on risk free investments is taken as reference for this purpose.

The company has based on actuarial Valuations reversed an amount of ‘ 0.04 lakhs on account of leave encashment payable to the employees.

Sensitivity analysis

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.

6 EXPENDITURE IN FOREIGN CURRENCY

Expenditure in Foreign Currency - NIL (Previous Year - NIL)

Earning in Foreign Currency - NIL (Previous Year - NIL)

7 LEASES

Pursuant to Indian Accounting Standard ( Ind AS-17) - Leases, the following information is given In case of assets taken on operating lease

The lease rent and amenities charges recognized in the Statement of Profit and Loss during the year ended March 31, 2018 is Rs. 26.77 lakhs (previous year: Rs. 25.79 Lakhs)

3. Vesting schedule of the ESOP plan is as follow:

12 months from the grant date-33.33%

24 months from the grant date-33.33%

36 months from grant date -33.33%

8 FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of market risks, liquidity risks and credit 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 and deposits with banks. The company’s maximum exposure to credit risk is limited to the carrying amount of the financial assets recognised as at March 31, 2018.

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. The Company believes the concentration of risk with respect to trade receivables as low, as its customers are in several jurisdictions and industries and operate in largely independent markets. Management monitors the Company’s net liquidity position through rolling forecasts based on expected cash flows.

The Company uses the expected credit loss model as per IND AS 109 - ‘Financial Instruments’ to assess the impairment loss or gain. 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.

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. 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 and the cash flow that is generated from operations. The company has short term borrowings in the form of loan from related parties. The Company believes that the same can be paid out from internal accruals and mutual fund investments. 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 ‘51.80 lakhs (Previous year : Nil, April 1, 2016 : Nil) that are expected to readily generate cash inflows for managing liquidity risk.

Maturities of financial liabilities

The tables below analyze the Company’s Financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

c. 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.

d. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate on account of a change in market interest rates.

e. Price risk

The Company’s exposure to mutual fund securities arises from investments held by the Company and classified in the balance sheet at fair value through profit or loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the framework and policies set by the Board of Directors.

9 CAPITAL MANAGEMENT

The Company manages its capital to ensure that it will continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Company monitors capital using the gearing ratio.

10 FAIR VALUE MEASUREMENT

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 vales:

a. Fair value of cash and cash equivalents, trade and other current financial assets, trade & other payables and short term borrowings approximate their carrying amounts due to the short maturities of these instruments.

b. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

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.

11 RECONCILIATIONS BETWEEN PREVIOUS GAAP AND IND AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from Previous GAAP to Ind AS.

Reconciliation of equity as previously reported under Previous GAAP to Ind AS

The Previous GAAP figures hve been reclassified to confim to Ind-AS presentation requirement for the purpose of this note

12 Figures for Previous Year have been regrouped/rearranged wherever required to make them comparable.