FINANCIAL STATEMENTS: oF EMERGING MEDIA (PRIVATE) LIMITED FORTHE YEAR ENDED 31ST MARCH 2019,2 Off Police Park Avenue, D.H.P. MUNAWEERA & CO. Colombo 05, ‘chartered Accountants. Sri Lanka. Sonvng the Profesion Since 1882 No. 5/6, Police Park Terrace, Telephone :+94 11 2553006 494 14 2555313 Fax 149441 2556038 Exmall :munaweera@sttnet.k REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS ‘TO THE SHAREHOLDERS OF EMERGING MEDIA (PRIVATE) LIMITED. We have audited the Financial Statements of Emerging Media Pxvate) Limited, which comprise the Statement of Financial Position ap at 81 March 2019 and the Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows forthe year then endod and Note to the Financial Statements, including a Summary of Significant Accounting Policies. asisfor pinion We conic curaud in acordance with Lanka Auding Standard (6LAKS) for he Audis of Non Spend usin Snerpses (NonSHED, which requ tat we plans pro aod foci ramet aan, shout meter tee Finance Stones of tra nsnement, An Aud ice exang, on 8 te bana evidence opporing ie amounts and doar ine ald Fn Satomen, ming be Acetng rnp nd snd itt ectiate sade by te tavagement creang te evan prosatonof Ge nil Satnents dd doesn whether Ue aod Fosacl Shtement prepared and pred In tcrontance wi eS Lanka Account Sunard for Sal and Mediusnd Ente CLIN for SMEs), Weave ‘Gene ll he nations eplantons which thts of xt knowedge and ball wer seesny fore poe our aud We herlrbelave ta on oo provides somal sf or opicn ‘Qualified Opinion ‘The Financial Statements ofthe prior period was audited by another Auditor. Accounting Policies applied by the Company had not been disclosed in the Financial Statements for the prior periods. Consequently we were unable to ascertain whether the accounting policies disclosed during the year have been consistently applied from the previous years. No details were available of Prior year adjustments amounting to Rs-22, 15,882/ which had been directly credited to the Retained Eamings in the Statement of Changes in Equity. We were unable to verify this amount by alternative audit procedures. ‘The Company has not maintained a proper Fixed Assets Register in order to safe guard the assets and we were unable to verify them by alternative audit procedures. In our opinion, except for the offect on the Financial Statements of the matters referred to in the preceding paragraph ‘the accompanying Financial Slatements give a true and fair view of, or present fairly, in all material respects the Financial Position of the Company as at 31% March 2019 and of its financial performance and its Cash Flows for the yar then ended in accordance with Sti Lanka Accounting Standard for Small and Medium-sized Entities (SLFRS for SMES), Respective Responsibilities of Management and Auditors ‘The Management is responsible for maintaining proper accounting records, preparing and presenting these Financial Statements in accordance with the Sri Lanka Accounting Standard for Small and Medium-sized Entities (SLERS for ‘SMEs), Our responsibilty is to express an opinion on these Financial Statements, based on our Audit. Report on Other Legal and Regulatory Requirements As required by Soction 163 (2) of the Companies Act No, 07 of 2007, and as far as appears from our examination, proper accounting records have been kept by the Company. ‘The Company has entered into an agreement with the Colombo Municipal Council to obtain Insurance covers before ‘the erecting of nondiluminated Advertising Panels at selected locations, However the Company has not complied with this requirement. GYR vavanweerr elo [D.HLP. MUNAWEERA & COMPANY ‘CHARTERED ACCOUNTANTS Colombo 2308 January 2020 MW/er Ms. C.K. WJAYARATNA FCA, K.LALN. PERERA FCA, FMAAT, B.B. MGT(ACC) SP, R.D.M. WIJETHUNGA ACA Bsc (MGT)I | | 1 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST MARCH 2019 2018 Notes Rs. Rs. Revenue. 3 82,940,972.37 68,419,227 Cost of Sales 4 (27,259,424.49) (25,073,674) Gross Profit 35,681,547.88 43,345,553 Other Income 5 524,758.33, - Selling & Distribution Expenses 6 (10,677,602.13) (11129456) Administration & Establishment Expenses 7 (30,613,666.99) (20,189,772) Result from Operating Activities ‘14,915,032.09 12,026,323 Finance Costs 8 (113,449.86) (41668) Finance Income ° 449,415.53 310.570 ‘Net Finance Income 335,965.67 268,901 Profil/ (Loss) before Taxation 15,250,997.76 12,295,224 Income Tax Expenses. 10 (6A89A71.00) 397,639) ‘Net Profit / (Loss) for the year 9,761,526.76 11,397,585 Other Comprehensive Income - - ‘Total Comprehensive Income/ (Loss) for the year 9,761,52676 11,397,585 Earning per Share n 9,761.53 11,398 EMERGING MEDIA (PRIVATE) LIMITED Figures in brackets indicate deductions. ‘The Accounting Policies and Notes on Pages 6 through 25 form an integral part of these Financial Statements,ASAT SIST MARCH Property, Plant & Equipment Total Non-Current Assets (CURRENT ASSETS Inventory ‘Trade & Other Recelvables ‘Other Current Assets Pixed Deposits Amounts due from Related Parties ‘Cash & Cash Equivalents ‘Total Current Assets TOTAL ASSETS H LITIES EQUITY Stared Capa Retained Earnings Total Equity NON. CURRENT LIABILITIES, Retirement Benefit Obligations Deferred Tax Liability ‘Total Non - Current Liabilities NT ES ‘Trade & Other Payables Other Current Liabilities Income Tax Payable Amounts due to Related Parties Bank Overdrafts ‘Total Current Liabilities ‘TOTAL EQUITY & LIABILITIES 2 B u B 16 ” 8 » RB BREEB 60,418, 059.05 908,150.00 3,317,621.00 4,225,71.00 2019 2018 Rs. Rs. 28,994,319.16, 22694207 28,994,519:16 22,698,227 1,906,827:50 - 20.891,386.93, 12,986,703, 499,795.84 338,059 7,000,000.00 420,619 14,434,863.39 - 13,081,604 4,996,592.79 2.665,711 9,721A6645. 33,360,736 78655,705.51 56,054,953, 110,000.00 60408,059.05, 632,908.58 24,162,310 3,826,91250 : 871,322.08, (484,166) - 3,000,000 3,180,816.40 86,158 14,011 955.56 26,764,302 78,585,785.61 56,054,953 ‘These Financial Statements are prepared in compliance with the requirements of the Companies Act No. 7 of 2007. 30th January 2020 Figures in brackets indicate deductions, ‘The Accounting Policies and Notes on Pages 6 through 25 form an integral part ofthese Financial responsible for the preparation and presentation of these Financial Statements. -and on behalf of the Board by,Balance as at Olst April 2017 Profit/ (Loss) for the year Dividend Declared Balance as at 31st March 2018, Prior Year Adjustments Dividend Declared Profit/ (Loss) for the year Balance as at 31st March 2019 {GING MI \TE) LIMITED, ‘STATEMENT OF CHANGES IN EQUITY Stated Rs. 110,000.00 Figures in brackets indicate deductions. The Accounting Policies and Notes on Pages 6 through 25 form an integral part of these Financial Statements. Retained Earnings Rs, 118,733,065.00 11,397,585.42 (850,000.00) 129,280,650.42 22,215 ,881.87 (850,000.00) 9,761,526.76 {60,408,059.05 18,743,065.00 11,397,585.42 (850,000.00) 29,290,650.42 22,215 881.87 (850,000.00) 9761,526.76 60,418,059.05RGIN PVT LIMITED FOR THE YEAR ENDED 31ST MARCH 2019 Ts. (CASH FLOWS FROM OPERATING ACTIVITIES [Net Operating Profit/(Loss) before Taxation 15,250,958, ADIUSTEMENTS FOR Interest Income i916) Finance Cost 113.450 Provision for Gratuity 906,150 Depreciation 192023 ‘Operating Profi (Loss) before Working Capital Changes 2015,205 Adjustment for Movement in Working Capital (Increase)/Decrease in Inventory 4,906,828) {Gnereas)/Decroaso in Trade & Other Receivables (7.504.588) {Unezense)/Decreese in Other Current Asse's 036.737) {Incxense)/Decreese in Amounts dis from Related Parties 1,353,225) Inerease/(Decrense) in Amounts due to Related Parties (6,000,000) Increase/ (Decrease) in Trade & Other Payable @8.029,405) Increase/ (Decrease) in Other Current Liabilities 3826913 ‘Net Cash Generated from Operations (6.508.766) Fiance Expenses Paid (13,450) "Tax & ESC Paid 816369) Net Cash flow/ (Outflow) from Operating Activities (7,838,578) (CASH FLOWS FROM INVESTING ACTIVITIES : Interest Received 449,416 Acquisition of Property, Plant & Equipment (012432115) Investment in Fixed Depostt 2.706 38 Net Cash Flow from (used in) Investing Activities (14,599,080) cas FROM {ANCING AC 8 Prior Year Adjustanents 215,862 Dividend Declared aac, Net Cash used in Financing Activities 21,365,882 [Net increase /(Decrease) in Cash & Cash Equivalents (701,776) (Cash & Cash Equivalents atthe beginning ofthe year 2579553 (Cash & Cash Equivalents at the end ofthe year -Note aen77 NOTE Cash is hand 42509 Cash at Bank 44952307 DECC o1sr15002943 3776 Bank Overdeafts 6.180.816) 3807777 Figures in brackets indicate deductions. ‘The Accounting Policies and Notes on Pages 6 through 25 form an integral patt ofthese Financial Statements, 2018 12295226 12,295,206 7075s) 2212850 Bans (850,000) 2,695,591 2579/59.1a 12 13 2a 22 23 RGING MEDIA (PRIVATE) LIMITED NOTES TO THE FINANCIAL STATEMENTS. CORPORATE INFORMATION Reporting Entity Emerging Media Limited is a Limited Liability Company incorporated and domiciled in Sri Lanka. The Registered Office and Principal Place of Business is located at 25% Floor, East Tower, World Trade Center, Colombo 01. Principal Activities & Nature of Operations During the Period, the principal activities of the Company were providing Advertising Services. Approval of Financial Statements ‘The Financial Statements forthe year ended 31+ March 2019, were authorized for issue by the Board of Directors on 30! january 2020, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation ‘The Financial Statements have been prepared on an accrual basis and-under the historical cost convention except for derivative financial instruments, fair value through profit or loss financial assets, financial assets at amortized cost and fair value through other comprehensive income financial assets that have been measured at fair value. Statement of Compliance The Financial Statements of the Company have been prepared in accordance with Sri Lanka Accounting Standards for Small and Medium-sized Entities ("SLERS" for SMEs) as issued by the Insitute of Chartered Accountants of Sri Lanka. The preparation and presentation of these Financial Statements are in compliance with the requirements of the Companies Act No.07 of 2007. Significant Accounting Judgements, Estimates and Assumptions In the process of applying the Company's accounting polices, management has exercised judgement and estimates in determining the amounts recognized in the Financial Statements. Use of available information, estimates and assumptions and application of judgement is inherent in the preparation of the Financial Statements as they affect the application of accounting policies and the recorded amounts in the Financial Statements, ‘The Company believes its estimates including the valuation of assets and Liabilities are appropriate! Estimates and underlying assumptions are reviewed on a continuous basis. However the actual results may differ from those estimates. The most significant uses of judgements and estimates are as follows:232 24 254 2544 ERGING MEDIA (PRIV, ITED NOTES TO THE FINANCIAL STATEMENTS. Judgements Taxation ‘The Company is subject to income tax and other taxes. The liability to Taxation has been computed int accordance with the provisions of the Inland Revenue Act No.24 of 2017 and the amendments thereto, Income Tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case itis recognized either in equity or other comprehensive income respectively. ‘The Company recognized assets and Liabilities for Current, deferred and other Taxes based on estimates of whether additional taxes will be due. Where the final Tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the Income and Deferred Tax amounts in the petiod in which the determination is made, ' Estimates & Assumptions Going Concern ‘The Board of Directors has made an assessment on the Company's ability to continue as a going concern and is satisfied that it has the resources to continue in operation for the foreseeable future. Further more, management is not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Therefore, the Financial Statements continue to bé prepared on the going concern basis. Value of Financial Instruments : Where the fair values of financial assets and financial liabilities recorded in the Statement of Financial Position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The inputs to these models are derived from observable market data where possible, but if this is not available, judgement is required establishing fait values, Foreign Currency Translation 1 The Financial Statements are presented in Sri Lankan Rupees (Rs.) which is. the Company's functional and presentation currency. ‘ ‘Transactions in foreign currencies are initially recorded at the spot middie rate of exchange ruling at the date of the transaction monetary assets and liabilities denominated in foreign currencies are retranslated at the spot middle rate of exchange at the reporting date. All differences arising on non-trading activities are taken to ‘Other Operating Income’ in the Income Statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the spot exchange rates as at the date of recognition, : Financial Instruments Financial Ass Initial Recognition and Measurement Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fait value through other comprehensive income and fair value through Profit or Loss.2.51.2 @ (b) EMERGING MEDIA (PRIVATE) Li NOTES TO THE FINANCIAL STATEME] j A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVPL, transaction costs that are directly attributable to its acquisition or issue. A trade Receivable without a significant financing component is initially measured at the transaction price. Subsequent Measurement For purposes of subsequent measurement, financial assets are classified in four categories + Financial assets at amortized cost (debt instruments) 5 * Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) * Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon de-recognition (equity instruments) i ' * Financial assets at fair value through profit or Loss, : Financial Assets at Amortized cost (Debt Instruments) ‘The Company measures financial assets at amortized cost if both of the following conditions are met: * The financial asset is held within a business model with the objective to hold financial assets in, order to collect Contractual Cash Flows and i * The contractual terms of the financial asset give rise on specified dates to Cash Flows that are solely payments of principal and interest on the principal amount outstanding \ Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to Impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, Modified or impaired. Financial Assets at Fair Value through OCI (Debt Instruments) ‘The Company measures debt instruments at fair value through OCI if both of the following conditions are met, * The financial asset is held within a business model with the objective of both holding to collect contractual cash lows and selling. \ * ‘The contractual terms of the financial asset give rise on specified dates to Cash Flows that are solely payments of principal and interest on the principal amount outstanding, ' ‘ For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or Reversals are recognized in the Statement of Profit or Loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes aré recognized in OCI. Upon de-recognition, the cumulative fair value change recognized in OCI is recycled to Profit or Loss.© @ 251.3 @ &) EMERGING MEDIA (PRIVATE) LIMITED 4 NOTES TO THE FINANCIAL STATEMENTS, f Financial Assets Designated at Fair Value through OCI (Equity Instruments) Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity Instruments designated at fair value through OCI when they meet the definition of equity under LKAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on ant Instrument-by instrument basis. Gains and losses on these financial assets are never recycled to Statement of Profit or Loss. Dividends are recognized as other income in the Statement of Profit or Loss when the right of payment has been established, from such proceeds as a recovery of part of the cost of the financial asset, in which case, suck, gains are recorded in OCL Equity Instruments designated at fair value through OCI are not subject to to impairment assessment, : Financial Assets at Fair Value through Profit or Lost Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon Initial recognition at fair value through profit ot loss, or financial asseté mandatorily required to be measured at fair value, Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term, Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments, Financial assets with Cash Flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business ‘model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCL as described above, deb instruments may be designated at far value though profit or loss, (on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the Statement of Financial Position at fait value with net changes in fair value recognized in the Statement of Profit ot Loss. 1 De-recognition : A financial asset is derecognized when: 1 ‘The rights to receive Cash Flows from the asset have expired, i * The Company has transferred its rights to receive Cash Flows from the asset or has assumed an obligation to pay the received Cash Flows in full without material delay toa third party under a pass-through’ arrangement; and either ‘The Company has transferred substantially all the risks and rewards of the asset, The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive Cash Flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognized to the extent of the Company’ continuing involvement in it.2514 252 25.24 25.22 a) 253 GING MEDIA \TE) LIMITED i NOTES TO THE FINANCIAL STATEMENTS, Impairment of Financial Assets ‘The Company recognizes an allowance for Expected Credit Losses (ECLs) for all debt instruments not held at fair value through Profit or loss. ECLs are based on the difference between the contractual Cash Flows due in accordance with the contract and all the Cash Flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected Cash Flows will include Cash Flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms, ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12 month ECL). For: those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance ig required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). i For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLst ‘Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. Financial Liabilities 1 Initial Recognition & Measurement ‘ Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit ot loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge as appropriate, All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, carried at amortized cost. This includes directly attributable transaction costs. Subsequent Measurement \ ‘The measurement of financial liabilities depends on their classification as follows: Loans & Borrowings After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the liabilities axe derecognized as well as through the effective interest rate method (EIR) amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the Income Statement. 4 Fair value of Financial Instruments The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs, For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted Cash Flow analysis or other valuation models. \ 10IRGING MEDIA (PRIVATE) LIMITE] EMERGING MEDIA (PRIVATE) LIMITED NOTES TO THE FINANCIAL STATEMENTS, \ Impairment of Non-Financial Assets ‘The carrying amounts of the Company's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there js any indication of impairment, If any such indication exists then the asset's recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each yeat at the same time: ‘The recoverable amount of an asset or cash-generating unit is the greater of its value in use and ils fair value less costs to sell. In assessing value in use, the estimated future Cash Flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates Cash Inflows from continuing use that are largely independent of the Cash Inflows of other assets or groups of assets (the ‘cash generating unit’ or ‘CGU’). An impairment loss is recognized if the carrying amount of an asset ot a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists, An impairment loss is reversed, if there had been a change in the estimates used to determine the recoverable amount, An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impaisment loss had been recognized. Property, Plant & Equipment } Property, Plant & Equipment are stated at cost excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Changes in the expected useful life are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. 4 1 ‘The Company reviews its assets’ residual values, useful lives and method of depreciation at eack reporting date. Judgement by the management is exercised in the estimation of these values, rates) methods and hence they are subject to uncertainty i Depreciation on other Property, Plant & Equipment has been provided on the straight tine basis aa follows: Assets Rate Furniture é Fittings 20% i Motor Vehicle 20% LED Screens 20% ‘Telephone 25% Office Equipment 25% : Computers 25% ' Property, Plant & Equipment are derecognized on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in ‘Other Operating Income’ or ‘Other Operating Expenses’ as appropriate in the Income Statement in the year the asset is de-recognized, n | |a7 28 284 29 210 EMERGING MEDIA (PRIVATE) NOTES TO THE FINANCIAI MENTS Leases f ‘The determination of whether an arrangement is, or contains, a lease is based on the substance of thé arrangement at inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement, Finance leases that transfer to the Company substantially all the risks and benefits incidental to ‘ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or ,if lower, at the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset, Lease payments are apportioned between finance charges and reduction of the lease liability s0 as té achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in profit or loss, A leased asset is depreciated over the useful life of the asset, However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the Jeasé term, Operating lease payments are not recognized in the Company's statement of financial position and recognized as an operating expense in the income statement on a straight-line basis over the lease term. Employee Benefit Liabilities Defined Benefit Plan - Gratuity ‘The Company pays gratuity according to the payment of gratuity Act No. 12 of 1983, the liability for gratuity to an employee arises only on completion of 5 years of continued service with the Company. ‘The Liability is not externally funded or it is actually valued. Defined Contribution Plans - Employees’ Provident Fund and Employees’ Trust Fund ! Employees are eligible for Employees’ Provident Fund and Employees’ Trust Fund contributions in line with respective statutes and regulations. i Provisions Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the Income Statement net of any reimbursement. t Trade & Other Payables Trade Payables are recognized initially at the transaction price and subsequently measured at amortized cost using the effective interest method. 122a 2add 2a 242 EMERGING MEDIA (PRIVATE) LIMITED ; NOTES | iE FINANCIAL STATEMENTS Taxes 1 Current Tax ‘Current tax assets and liabilities for the current and prior years are measured at the amount expected té be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Deferred Tax Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences, except where deferred tax ligbility arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit or loss In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax Iosses can be utilized except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction. affects neither the accounting profit nor taxable profit or loss; or in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse irl the foreseeable future and taxable profit will be available against which the temporary differences can bé utilized, ‘The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profit will allow thé deferred tax asset to be recovered. ‘ Deferred Tax Assets and Liabilities are measured at the Tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and Tax Laws) that have beert enacted or substantively enacted at the reporting date. ‘ 4 Deferred Tax assets and deferred Tax Liabilities are offset if a legally enforceable right exists to set-off Current Tax Assets against Current Tax Liabilities and the Deferred Taxes relate to the same Taxable ‘Company and the same Taxation authority. Borrowing Costs : All borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. f 13213 214 245 245.1 215.2 216 ‘EMERGING MEDIA (PRIVATE) LIMITED N THE FINANCIAL STATEMENT! Capital Commitments & Contingent Liabilities Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events or present obligations where the transfer of economic benefits is not probable or cannot be reliably ‘measured. Capital commitments and contingent liabilities of the Company are disclosed in the respective notes to the Financial Statements, Cash & Cash Equivalents Cash and Cash equivalents include cash on hand, demand deposits and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within ‘borrowings in current liabilities on the statement of Financial Position. : Statement of Comprehensive Income Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to Company and the revenue and associated costs incurred or to be incurred can be reliably measured, Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and Value ‘Added Taxes. The following specific criteria are used for recognition of revenue. (a) Rendering of Services Revenue from the rendering of services is recognized in the accounting period in which the services are rendered or performed. i (b) Interest Income Interest income is recognized on accrual basis using effective interest rate method (FIR). ‘ (©) Others Gains and losses of a revere nature on the disposal of Property, Plant & Equipment and other non-current assets including investments are recognized by comparing the net sales proceeds with the carrying amount of the corresponding asset and are recognized net within ‘other income! in Profit and Loss. Expenditure Recognition Expenses are recognized in profit or loss on the basis of a direct association between the costs incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the Property, Plant & Equipment in a state of efficiency has been charged to income in arriving at the profit for the year. For the purpose of presentation of Statement of Comprehensive Income the Directors are of the opinion that ‘function of expenses method! presents fairly the elements of the ‘Company's performance, and hence such presentation method is adopted. Related Party Transactions ' Disclosure is made in respect of transactions is which one party has the ability to control or exercise significant influence over the financial and operating policies, decision of the other irrespective of whether a price is being charged. 14EMERGING MEDIA (PRIVATE) LIMITED t NOTES TO THE FINANCIAL STATEMENTS i Events after the Reporting Date b All material events occurring after the reporting date have been considered and where neces! adjustments have been made to the Financial Statements. 218 Segmental ‘The Company does not distinguish its products into significant components for identifying segments. 219 Earnings per Share ‘The Company presents basic Earnings per Share (EPS) for its ordinary shares, Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted number of ordinary shares outstanding during the period. ¥ 220 Cash Flow Statement ‘The Cash Flow Statement has been prepared using the indirect method. 15IRGING MEDIA (PRIVATE) LI NOTES: HINANCIAL STATEMENT: FOR THE YEAR ENDED 31ST MARCH 2019 2018 : Rs, Re 3. REVENUE Advertising Income 82,940,97237 68,419,227 82,940,972.37 68,419,227 — _sew 4 sT OF SALES. LED Outdoor Advertising 464,675.00 2,558,386 Commercial Production 130,896.25 994,200 Salon Repair & Maintenance Cost 4671,101.92 2,698,607 Salon Rent 1A17513.16 1,967,000 Depreciation, 692,022.53 - MC Screen Expenses 51,700.00 - Hoarding Site Installation Cost 397,000.00 440,757 Cinnamon Project 70,170.00 - ‘Cost of Sales - UNITV 488232 - Cost of Sales - Health Guard 106,480.00 - Cost of sale - Gym TV 366,175.00 - Cost of Sales - Keels Project “2,750.00 - Cost of Sales - Bread Talk 61,200.00 . Hoarding Expenses 4,232,930.34 6,986,200 Sumatti Screen 4,067,547 82 - Kikos Repair Cost 29,265.00 - CCC Jewellery 16,770.00 : (OH Digital - Cooking TV 182,000.00 OOH Digital - Nokia 85,000.00 : Shopping Mall TV Maintenance Cost 8,780,249.15 5,707,602 Cinema Advertising (Movie & Theater Expenses) 596,037.00 30922 Import of Spare Parts, 335,059.00 : 27,259,424.49 25,073,674 16MEDIA (PRIVATE) ‘THE FINANCIAL STA‘ FOR THE YEAR ENDED 31ST MARCH OTHER INCOME Other Income 494,508.53 Discount Received 30,244.80 528,753.33 ELLING & DISTRIBUTIC ES Staff Commission 6,063,683.00 Business Promotion 1,362,216.62 Travelling, : Commission Agency 446,600.00 Charity, Gift & Donation 200,000.96 ‘Compliments for client 83,258.69 NBT Expenses 1,598,962.40 Parking i Provisfon for Bad & Doubifull Debts 882,658.50 Bad Debtors 40,221.96 10,677,602.13, 7 5,151,284 227,265 232,318 3,797,619 85494 252,594 1,368,384 14,500 11129458™ -DIA (PRIVATE) LIMITED, ES TO THE FIN, OR THE YEAR ENDED 31ST MARCH ADMINISTRATION & ESTABLISHMENT EXPENSES Directors Remuneration Staff Salary & Wages Allowances EPF-12% EIF-3% Provision for Gratuity Staff Welfare Printing &Stationery Accountancy Fee Audit Fess Casual Wages Office Maintenance & Repairs Fuel Allowance & Upkeep IT Related Expenses Telephone Charges Internet Bil Dialog TV Bills Telecom -PEOTY Water ‘Toner Caruidge Expenses Compliments Vehicle Repairs & Maintenance Registration Charges Advertsing Expenses Web Domain Expensas Traveling & Transport Equipment Malntenance Structure Sets Sundry Exponses Stamp Duty Stat Bonus Mobital TV Box Feo-RMV Legal Expenses ‘Traveling & Transports Ceylino Seren ‘Tender & Documentation Charges 2019 1,200,000.00 987107262 551042335 11979789 284,299.45 335,15000, 361,049.27 213,098.00, 525,000 150,000.00 32,500.00 596,740.92 42,000.00 45149068, 5497113, 3,231.96 1086 368.64 143851602 2,585,973.42, 2,982,087 27 691057 120,750.00 16845295 106,073.70 70,037.00 100,000.00, 90,489.00, 603,20035 32,575.00 38,605.80, 10,000.00 2200.00 15,000.00 66,250.00 30613 666.99 HINANCE COSTS Bank Charges Bank Interest charges 89,545.96 113 A09.86IN VATE) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 51ST MARCH 2019 Rs, 9 EINANCE INCOME Interest Income 449,415.53 449,415.53, 30 INCOME, ENS) Current Income Tax 2,171,850.00 Provision, (Reversal) for Deferred Tax 3,317,621.00 5,89471.00 ee 31 EARNING PER SHARE pet share computation. FOR THE YEAR ENDED 31ST MARCH 2019 Rs. Amount used as the Numerator Net Profit Attributable to Ordinary ‘Shareholders of the Company 9,761,526.76 Amount used as the Denominator Weighted Number of Ordinary Shares 1000) Earning per Share 9,761.53 — es 19amr = OL eIE'be6'sz_ (eszz0'z6r'9) COPILTEHTL 00 Lzz'b69'cz IS#lO'rOr'e ce IS PLOPOrz a LB LEL'9 (tes) sTose’se0's, ro08 ar cowy see : OsreSS aa costo ‘SO'8t0'ss. 0000s'FL O0'F9T'IS Oster rest 5 00'909'¢c9'¢ OO'LIg’esT’s. 00'8rL'1Z8'9 oosis‘ze (oo'sos’z1) = ovozros SS RCr'6INT (vortse’60z) on'o00'oss'z onusr'see 98°10’ L6e 00°008’SIT 0046757 LEVIN LL ooroso'Ze O0'8bL'EL 00'F08'z0s'¢ = OO ZLO'LEEL ovosse couvot Os'oor'szs'T 00°928'896'L "ar ™ = = CLoeROTE Syesodsiq TT SIOHIPPV ‘Broo peourre anyaopepeedsa aeons nTeA 100g PN, vwe1og 125015 ™22D§ CHI Sd sam 43 ono}09 AL GET] a AL suowdinbg 39 Asounpey, Ayaqr] - wang aam>, ALSupucis sre) SPAPA 1HOPy jquawdmbg 2 sxayndwioa uot 55 AL sedea aaa Sunny 2 aamnimy RV PRET WOW TZ INIAGNOA PING ATWIIOW zr &EMERGING MEDIA (PRIVATE) LIMITED NOTES TO THE FINAI STATEMENTS AS AT 31ST MARCH INVI ES Value of LED Sereen- Ceylinco 1 & RECEIVABLES ‘Trade Debtors ‘Less: Provision for Bad & Doubiful Debts Staff Loans Deposits & Other Receivables Deposits & Other Receivables Refundable Deposit- Rent SLT Peo TV Bank Guarantee OTHER CURRENT ASSETS Advance Payments 141 2 1,906,827.50 1,906827.50 —_—_ae 22,362,911.89 (297,551.00) 254,022.08 azz 00400_ 20,891,386.93 ———_ 382,204.00 489,300.00 380,000.00 4.252,008,00 489,795.84 489,795.84 14,083,351 (2,094,898) 198,000 800,245 12,986,703 310,485, 489,800 | 333,059 333,059AS ATSIST MARCH 16 SHORT TERM INVESTMENTS Fixed Deposit - NB - 300110036207 Fixed Deposit - N78 - 300110096280 Fixed Deposit - NTB - 300110052129 Fixed Deposit -300110058435 MOUNTS DUE FROM RELATED PARTH Medi TV (Pvt) Led Out of Home Digital (Pvt) Lad Bus TV (Pvi) Lid Out of Home Media (Pvt) Ltd Director Current A/C Mr: Sanjeewa Director Current A/C-Mr. Tyner Director Current A/C-Mr. Lahirw 5H VALENTS, Cash in Hand PCC 015115002943 Savings Account -NTB - 200110035088 > STATED CAPITAL, Ordinary Shares Number of Shares : 117,639 : 3,175,980 5,000,000.00 - 2,000,000.00 - 7,000,000.00 4293619 —_—aae 2,985,308.72 1,377,786 8,073,075.00 8334,075 1,284,189.39 1271399 314,583.77 2,098,384 805,859.25 - 364,097.28 : 241,735.98 : ee 14,434 865.39 13,081,634 SSS 034 4,952,307.21 2,699,074 498,592.79 2,665,711 — 2671 2019 Rs, 2018 Rs, 42,509.45 26,637 By 3,776.13 th 10,000.00 10,000 ——_10,000_ 10,000.00 40,000» 221 RGING MEDIA (Per, an NC THE FINANCIAL STAT} F i AS ATSIST MARCH 2019 2018 i Notes > uy RETIREM EIT OBLIGATIONS At the begioning of the year Uader Provision of Gratuity as at 31/03/2018 Provision made during the year Payznents during the year DEFERRED TAX UABiLrTy Balance atthe oF the your a - i ‘Charge/(Reversal) for ‘the year 3317,621.00 = {| talance at the enc car 7621.00 - ig Balance at the end ofthe ye sou, ‘ i ‘TRADE & OTHER PAYABLES 4 A Trade Creditors 2138503 1830855 ‘Accrued Expense Other Payables na 3.975055 353,957 i 63290458 24102310 & ‘ a Payables ‘ Other Payabies - 3,609,354 H Dividend 14520,000.00 765,000 u WHT on Dividend Declared - 85000 Hl Ades 13900100 7150 i Accountancy Charges 250,000.00 - 4 Salary 336,017.17 181,893 i BC 4.56856 235.08 VAT 906,414.60 222,296 \ Nor 7627636 49361 BF 27435099 102890 EF 40049 15253 Pave - 3,084 Telephone 7 246258 wet an26176 : Hlctcty 1850182 : Legal Fees 1@00000 : Salon Rent 2080950 : ee 750.55 3.999, 5,593,957 Advance Recelved - Caylinco 23GING MEDIA (PRIV, NTE NOTES TO THE FINAN "ATEMI AS AT 31ST MARCH INCOME TAX PAYABLE At the beginning of the year ‘Less: Income Tax Payments & ESC Seto in 2017/2018 Provision made during the year ‘Taxes paid during the year WHT claimed during the year ESC claimed during the year Balance At the End of the Year AM DUE TO RELATED PAR’ Directors Current Account BANK OVERDRAFT Bank Overdraft - NTB S 2019 (484,165.55) (484,165.55) 2,171,850.00 (688.897:19) (6,565.10) (42050008) 871,322.08 i 380,816.40 3,180,816.40 2018 Rs. 897,639 (342,096) 555,542 (1.039708) (484,166) 3,000,000 3,000,000, 86,158 86,158AS AT31ST MARCH 2019 2018 Rs. Rs NANG STRUMENTS Financial Assets & Liabilities by Categories a Financial Assets by Categories Financial Instruments in Current Assets Trade & Other Receivables 20 891,386.93 12,986,703 Amounts due from Related Parties 14,434,863,39 13,081,634 (Cash & Cash Equivalents 4,998,592.79 2,665,711 SR 2 005,711 Total 40,326,943. 28,794,018 SSS BOB For Financial Assets, the carrying amount and falrvalue, are equal, Financial Liabilities by Categories Financial Instruments in Current Liabilities ‘Trade & Other Payables 6,132,904.58 24,162,310 Amounts due to Related Parties : 3,000,000 Bank Overdrafts 318081640 85,158 eto 86158 9,313,720.98 27,248,058 —SSS AS‘ATE OF ADJUSTED PRO! Net Profit/(Loss) - As per Accounts Depreciation Provision for. Impairment of Debtors Provision for Gratuity Finance Cost Bad Debtors Write Off Donation Less: Amounts Claimed Capital Allowance on assets acquited prior Olst April 2018 Capital Allowance on assets acquired on or after Olst. April 2018 Finance Cost Interest Income = As per Accounts Income from Business Anvestment Income Interest Income Tnvestment Income Total Assessable Income Total Taxable Income Tax @ 4% Total Tax Liability 6,192,023, 882,659 395,150 23,908 40,222 209,001 4773912 2613,923, 23,904 449,416 Rs. 15,250,998 7.673,958 22,928,956 (761,155) 15,063,801 449416 439,416 15513.216 15513,216 5513.21 2,171,850, 2,171,850 (Contd...)Balance Tax Payable/ (Refund) ERC 15/08/2018 14/11/2019 20/07/2018 19/10/2018, 14/01/2019 04/03/2019 658126 681447 710087 730968 Rs, Rs, Re 952411 1,316,308, 105,967 79118 151,147 84,668 420,900 6,565 1,743,774 428,07,EMERGING MEDIA (PRIVATE) LIMITED COMPUTATION OF INCOME TAX ROF AS 9 NOTE 01 ~ CAPITAL ALLOWANCE ON ASSETS ACQUIRED PRIOR TO O1ST APRIL 2018 Depreciation Year Allowance Claimed Assets: Cost Rate % Claimed, for the year Rs. Re. ‘MACHINERY & EQUIPEMENT Machinery & Equipment 5,250 5% 2 1313 Machinery & Equipment 5,500 25% 3 1375 Machinery & Equipment 1st 25% 4 5291 7979 EFI UTURE Furniture & Fittings 1,772,056 20% 2 354,411 Furniture & Fittings 149,583 20% 3 29917 389,328 MOTOR VEHICLE Motor Bike 344,950 25% 2 86,238 96238 COMPUTER & OTHER ASSETS Computer Equipment 45700 25% 2 1425 ‘Computer Equipment 54,309 25% 3 13,600 Computer Equipment 84798 25% 4 21,200 TVSels 550646 5% 2 137,662 TV Sets 3,218,573, 25% 3 804,643, ‘TVSets 1659281 25% 4 424810 ‘Standing TV 130,116 25% 2 32,529 Standing TV 5719496 25% 4 1429874 ‘Curve Screen - Liberty 1,712,986 25% 2 428,234 Curve Screen - Liberty 3,942,670 25% 3 985,668, Camera 14350 25% 3 3,588 ‘Mobile Phones 8519 5% 3 2137 £235,369 Grand TotalEMERGING MEDIA (PRIVATE) LIMITED COMPUTATION OF INCOME TAX ‘YEAR OF ASSESSMENT 2018/2019 NOTE_02~ CAPITAL ALLOW: ASSETS AC FTER 01ST. 8 Capital Allowance ‘Acquisition Year Claimed during the Class of Assets Cost Rate Claimed year Re Re, 2018/2019- 1st year inery & Equipment Machinery & Equipment 14500 20% 1 2,900 Motor Vehicles euzu Truck - WPLN 5724 2350000 25% 1 637500 ‘Computers & Led Screens Phone 77050 20% ft 15A10 ‘Computers & Equipment 115800 20% 1 2160 LED TV - Colombo City Center 535,400, 20% 1 107,080 PSLEDScreen 7085350 20% 2 1407070 Crescat Screen 2,104,015, 20% 3 420,803 2613923 NOTE 03 ~ DEDI ]OUNT.ON FINANCE ‘Total Finance Cost - As per Accounts 23,904 23,904 Az ‘Total of the issued share capital 60,418,059 and reserves of the entity Be 4 AXB ‘ 241,672,236 Allowed B94 Not Allowable (C/F) 7 NOTE {INCOME Interest Income on local Currency Savings Accounts Total Interest Income Liable to Income Tax