On Television Eighteen India Limited, which runs the popular private television channel ‘CNBC India’. We reproduce the profit and loss account of Television Eighteen India Limited for two consecutive years (financial years 2009 and 2010) with specific learning agenda. Based on the same comment, please answer the following:

I. Please note that the income statement format of reporting uses the earlier Schedule VI of the Companies Act 1956. It has significant differences from the presentation prescribed by the new Companies Act 2013, and followed by all the recent financial statements. What are the significantly visible differences? Please list them down. Discuss the possible reasons behind the same.

II. If the investments have increased significantly compared to previous years (as seen in the balance sheet), how can the “other income” be less than half of the previous year’s amount?

III. What is Prior Period Adjustment? Give examples of the same.

IV. What is the important reason for the company seeing a decrease in its financial profits in the year 2010, as compared to the year 2009? Discuss the other big changes that had happened in the companies’ income statement during the financial year 2010?

V. Would you change your previous opinion on the financial health of the company? Discuss.

Data from Mini Case 2.5 of Chapter 2

Raghav Bahl was the founding/Controlling Shareholder & Managing Director of the Network18 group until it was taken over by the Reliance group in 2014. Thus, his baby, Television Eighteen India Limited (TV18) used to run the popular private television channel ‘CNBC India’ during early days. The channel had its focus on business news and related events. We reproduce its balance sheet during Bahl’s time for two consecutive financial years (below) with specific learning agenda.

Please note that the format of reporting uses the earlier Schedule VI of the Companies Act, 1956. It has significant differences from the presentation prescribed by the new Companies Act 2013 – and followed by all the recent financial statements. What are the significantly visible differences? Please list them down. Discuss the possible reasons behind the same.

In the next balance sheet, losses are recorded as assets i.e., as part of application of funds. What could be the reasoning behind the same?

Was TV18 in good financial health? What are the other factors we need to take into account while commenting on the financial health of the company?

Discuss the significant changes that had happened in the companies’ financial position during the recent year.

Transcribed Image Text:

Television Eighteen India Limited Consolidated Profit and Loss Account for the Year ended 31 March, 2010 Year ended 31.3.2010 million) INCOME Income from operations Other income EXPENDITURE Materials consumed Production, administrative and other costs 5198.09 767.36 5965.45 263.64 3396.53 Year ended 31.3.2009 million) 4848.96 1112.46 5961.42 305.68 3904.47