Sun TV Network's record is built on a long, unbroken run of unqualified audit opinions and a promoter group that has held a steady 75.00% stake for years. The financial statements, however, carry a recurring pattern of profit-enhancing accounting choices, a loss-making joint venture kept off the consolidated balance sheet, and a governance structure where public institutional shareholders have repeatedly voted against promoter-family director re-appointments.
Key findings
- A 2021 amortisation change lifted FY22 profit by ₹159.80 crore, with useful-life and property-valuation choices outside Schedule II norms
Major- With effect from April 1, 2021, Sun TV changed from fully expensing film satellite rights on first telecast to amortising them over four years, which lowered amortisation expense by ₹213.55 crore and raised PAT by ₹159.80 crore for FY2021-22. Management's estimated useful lives for property, plant and equipment differ from Schedule II to the Companies Act 2013, including investment properties depreciated over 20 to 58 years and an aircraft over 10 years, a policy disclosed consistently from FY2022-23 through FY2025-26. - Sun TV impaired its South Asia FM joint-venture investment in FY2024-25 and FY2025-26
Major- Sun TV recorded impairment provisions on its South Asia FM Limited investment of ₹55.80 crore and ₹73.52 crore in FY2024-25, and ₹98.43 crore and ₹67.89 crore in FY2025-26, representing standalone and consolidated provisions for those two years. The auditor flagged this as a key audit matter in FY2022-23 and FY2023-24 because the investee had incurred losses or was operating near breakeven. The ₹4.80 crore goodwill on the 98.18% stake in Kal Radio Limited was carried with management stating no impairment risk, and the ₹1,184.99 crore franchise right for Sunrisers Leeds Limited, with a carrying amount of ₹1,248.27 crore as at March 31, 2026, was tested using a 9% discount rate that found no impairment. - Sun TV's largest off-balance-sheet vehicle, South Asia FM Limited, is held at 58.68% yet kept off the consolidated balance sheet, and swung to a ₹99.09 crore group-share loss in FY2025-26
Major- Sun TV held 58.68% of South Asia FM Limited as at March 31, 2026, but accounted for it as a joint venture using the equity method rather than consolidating it, even though it is a subsidiary under Section 2(87) of the Companies Act, 2013. The Group's share of South Asia FM Limited's net loss after exceptional items was ₹99.09 crore for the year ended March 31, 2026. The company has reported no material subsidiary in any year from FY2019-20 through FY2025-26 and has not formulated a policy on material subsidiaries in that same period. - Promoter-influenced entities are both Sun TV's largest customers and largest debtors, with no impairment ever recorded across seven years
Major- Trade receivables from four promoter-influenced entities, Sun Direct TV, Sun Distribution Services, Kal Media Services, and Gemini TV Distribution Services, totalled ₹468.79 crore as at March 31, 2021. Related-party receivables from six such entities stood at ₹200.52 crore as of March 31, 2023. The company recorded no impairment of receivables owed by related parties in any year from FY2019-20 through FY2025-26. The consolidated auditor's report for FY2022-23 carried a CARO qualification for South Asia FM Ltd, where loans granted had amounts overdue for more than 90 days, of which ₹1.40 crore was received on May 9, 2023. - Revenue quality is shadowed by a persistent expected-credit-loss allowance and customer concentration
Major- The allowance for lifetime expected credit loss on standalone trade receivables rose from ₹84.72 crore as at March 31, 2020 to ₹161.88 crore as at March 31, 2026, with the auditor identifying it as a Key Audit Matter in FY2022-23 due to the "high degree of management judgment" involved. Two major customers contributed revenue of ₹1,765.67 crore in FY2024-25, following two customers at ₹1,789.75 crore in FY2023-24, yet no major customer exceeded 10% of total income in FY2025-26. - Promoter family members hold five of eleven board seats with identical ₹87.50 crore remuneration packages, while public institutional shareholders repeatedly voted against re-appointments
Major- Mr. Kalanithi Maran (Executive Chairman) and his wife Mrs. Kavery Kalanithi (Executive Director) each received identical remuneration of ₹87.50 crore in FY2020-21 and again in FY2023-24. Public institutional shareholders voted 57.49% against the re-appointment of their daughter, Ms. Kaviya Kalanithi Maran, at a postal ballot concluded March 27, 2024, and 65.92% against the re-appointment of Mr. Shanmugasundaram Selvam at the AGM held September 20, 2024, though both resolutions passed on promoter votes. The promoter group held 75.00% of equity as of March 31, 2021, and remained at 75.00% as of the latest period. - Contingent liabilities are dominated by long-running tax disputes disclosed for over six years, with amounts declining from ₹1,049.57 crore to ₹53.73 crore
Minor- Disputed taxes not provided for totalled ₹53.73 crore as at March 31, 2023, down from ₹101.25 crore a year earlier and from ₹1,049.57 crore in FY2019-20. The company has disclosed show cause cum demand notices from Service Tax and GST departments, and contesting disallowances to taxable income, in every annual report from FY2019-20 through FY2025-26, with management believing its positions will be upheld. In FY2020-21, the company recorded ₹373.64 crore of "Taxes relating to earlier years" under the Direct Tax Vivad se Vishwas Act, 2020, "notwithstanding the fact that the Company's position have consistently been upheld in the past by Appellate Authorities". - Sun TV rotated from Deloitte to S.R. Batliboi in 2022, and non-audit fees exceeded audit fees nearly threefold in FY2024
Minor- Deloitte Haskins & Sells LLP served as auditor for five years till the 37th AGM in 2022, issuing unmodified reports, and was replaced by S.R. Batliboi & Associates LLP, proposed by the Board on August 12, 2022, for a five-year term. Total fees paid to auditors and network firms on a consolidated basis for FY ended March 31, 2024 were ₹3.25 crore, comprising ₹0.88 crore for audit-related services and ₹2.37 crore for other fees. This compares with total fees of ₹0.84 crore in FY2020-21.
What to watch
- South Asia FM impairment test. The next annual report will show whether the joint-venture investment, impaired in each of the four years through FY2025-26, requires another provision.
- Franchise right and goodwill impairment. The ₹1,248.27 crore franchise right and ₹4.80 crore Kal Radio goodwill face their next impairment test as at March 31, 2027.
Bottom line: This is a profitable, cash-generative broadcaster with a stable promoter holding and a clean audit history. The risk is not in the headline numbers but in the choices behind them: accounting policies that have consistently boosted profit, a 58.68%-owned subsidiary kept off the balance sheet that is now losing money, and related-party receivables that have never been impaired. Watch the next annual report for the South Asia FM impairment test and the franchise-right assessment, and track whether the related-party transactions stay within their approved limits.