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Accounting Policies of Pritish Nandy Communications Ltd. Company

Mar 31, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Property, plant and equipment

All items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement of Profit and Loss.

Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment, if they are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one period.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Depreciation on property, plant and equipment

Depreciable amount for property, plant and equipment is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on property, plant and equipment is provided on the straight line method over the useful lives of assets as prescribed under para C of Schedule II of the Companies Act, 2013.

Depreciation is calculated on a pro-rata basis from the date of acquisition/ installation till the date, the assets are sold or disposed off. Depreciation on improvement to leave and license premises is calculated over the period of leave and license.

The useful life is for the whole of the asset, except where cost of the part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part (“Component”) is determined separately and the depreciable amount of the said component is allocated on systematic basis to each accounting period during the useful life of the asset.

The residual values and useful lives of property, plant and equipment are reviewed at each financial year end and adjusted if appropriate.

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognised in the statement of profit and loss.

2.2 Impairment of property, plant and equipment

The carrying amounts of the Company’s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there are indicators of impairment, an assessment is made to determine whether the asset’s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Impairment is recognised in statement of profit and loss whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of net selling price i.e. fair value less costs to sell, and value in use. 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 assessment of the time value of money and risks specific to the asset.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

The impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.

2.3 De-recognition of property, plant and equipment

The carrying amount of an item of property, plant and equipment is de-recognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de-recognition of an item of property, plant and equipment is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is de-recognised.

2.4 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance leases are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of liability.

Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with policy on the borrowing costs.

Operating Lease payments are recognised on straight line basis over the lease period in the statement of profit and loss account unless increase is on account of inflation.

2.5 Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cash in hand and shortterm deposit with original maturity upto three months, which are subject to insignificant risk of changes in value.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Company’s cash management.

2.6 a. Cinematic content

The cinematic content has been valued on the following basis

i. Incomplete cinematic content : at lower of allocated/ identified cost or net realizable value.

ii. Abandoned/ shelved cinematic content : at lower of cost or net realizable value.

iii. Completed cinematic content : at lower of unamortized allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

i. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

ii. All rights other than music and residual rights are amortised as under:

First release Second release Third release

50% 30% 20%

iii. Residual rights are amortized on an equitable basis. The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

ii. No unamortized costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

b. Television content

The television content has been valued on the following basis

i. Unexploited television content : at lower of average of allocated cost or net realizable value.

ii. Unfinished television content : at lower of average of allocated cost or net realizable value.

iii. Production property : at lower of allocated cost or net realizable value.

iv. Exploited television content is amortised at lower of unamortized cost as estimated by the management on the following basis or net realizable value

No unamortized costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecast as per the chart depicted above.

ii. The production costs are amortised as per the above referred policy followed by the Company.

iii. The Company retains one copy of its own television content for record purpose.

2.7 Financial instruments-Financial asset

a. Classification

The Company classifies its financial assets in the following measurement categories:

i. Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss)

ii. Those measured at amortised cost.

The classification depends on the business model of the Company for managing financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in Other Comprehensive Income or profit or loss. For investments in debt instruments, this will depend on the business model in which the investment is held.

For investments in equity instruments, method of recognition will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income.

b. Recognition and measurement

i. Initial recognition

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the Statement of Profit and Loss.

ii. Subsequent measurement

After initial recognition, financial assets are measured at

i. Financial assets carried at amortized cost

ii. Financial assets at fair value through other comprehensive income

iii. Financial assets at fair value through profit and loss;

c. Debt instrument Measured at amortized cost

Financial assets that are held for collection of contractual cash flow where those cash flows represent solely payment of principal and interest are measured at amortised cost. Interest income from these financial assets is included in interest income using the Effective Interest Rate (EIR) method the amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

Measured at Fair Value Through Other Comprehensive Income (FVTOCI)

Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income (FVTOCI).

Fair value movements are recognised in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss.

On de-recognition, cumulative gain/ (loss) previously recognised in OCI is reclassified from the equity to other income in the Statement of Profit and Loss.

Measured at Fair Value Through Profit or Loss (FVTPL).

A financial asset not classified as either amortised cost or FVTOCI, is classified as Fair Value through Profit or Loss (FVTPL). Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as other income in the Statement of Profit and Loss.

d. Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses (ECL) associated with its financial assets carried at amortised cost and FVTOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade and lease receivable only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of such receivables.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an Company is required to consider all contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument.

e. De-recognition of financial assets

A financial asset is de-recognised only when the Company

i. has transferred the rights to receive cash flows from the financial asset or

ii. retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised.

Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

f. Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL.

Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.

g. Other financial liabilities

i. Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

ii. Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value.

iii. Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.

iv. De-recognition

A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expires.

h. Off-setting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

i. Equity instruments

The Company subsequently measures all investments in equity instruments other than those in subsidiary companies, at fair value. The management of the Company has elected to present fair value gains and losses on such equity investments in other comprehensive income, and there is no subsequent reclassification of these fair value gains and losses to the Statement of Profit and Loss.

Dividends from such investments continue to be recognized in profit or loss as other income when the right to receive payment is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in the Statement of Profit and Loss.

Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.

Investment in subsidiaries are carried at cost less impairment loss in accordance with Ind AS 27 on “Separate Financial Statements”.

2.8 Borrowings and borrowing costs

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortsed cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit and loss over the period of borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and consideration paid, including non cash asset transferred or liabilities assumed, is recognised as profit or loss as other income/ (expense).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

2.9 Revenue recognition

Revenue is the gross inflows of economic benefits received/ receivable by the Company on its own account.

Revenue is recognised to the extent, it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. It is measured at the fair value of the consideration received or receivable.

Amounts disclosed as revenue are net of returns, trade allowances, value added taxes and amount collected on behalf of third party.

The following criteria apply in respect of various revenue

2.10 Income tax

Tax expense comprises of current and deferred tax.

a. Current tax

Current tax is the amount of income tax payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current tax is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity.

b. Deferred tax

Deferred tax assets and liabilities are recognized using the balance sheet approach for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised 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 losses can be utilized.

Unrecognized deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

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.

c. Minimum alternate tax (MAT)

MAT paid in a year is charged to the Statement of profit and loss as current tax. MAT credit entitlement is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, which is the period for which MAT credit is allowed to be carried forward. Such asset is reviewed at each balance sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

2.11 Earnings per share

Earnings per share (EPS) is calculated by dividing the net profit or loss (excluding other comprehensive income) for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders is adjusted for after income tax effect of interest and other finance costs associated with dilutive potential equity shares and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

2.12 Foreign currency transactions

Functional and presentation currency

Items included in the Financial Statements of the Company are measured using the currency of the primary economic environment in which the Company operates (‘functional currency’). The Financial Statements of the Company are presented in Indian currency (INR), which is also the functional and presentation currency of the Company.

Transactions and translation

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at closing rates.

Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain/ (loss).

Foreign exchange gain/ (loss) resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gain/ (loss) are presented in the Statement of Profit and Loss on a net basis within other income/ (expense).

2.13 Employee benefits: Retirement and other employee benefits

a. Short-term employee benefits

All employee benefits are payable within 12 months of service such as salaries, wages, bonus, medical benefits etc. are recognised in the year in which the employees render the related service and are presented as current employee benefit obligations. Termination benefits are recognised as and when expense incurred.

Short term employee benefits are provided at undiscounted amount during the accounting period based on service rendered by the employees. Compensation payable under voluntary retirement scheme is being charged to the statement of profit and loss in the year of settlement.

b. Defined contribution plan

The Company’s contributions paid or payable during the year to the provident fund are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services.

c. Defined benefit plans

The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity. The expense is recognised at the present value of the amount payable determined using actuarial gratuity report.

Gratuity liability is a defined benefit obligation and is computed on the basis of present value of amount payable determined using actuarial valuation techniques as per projected unit credit method at the end of each financial year.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

It is recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services.

Re-measurement cost of net defined benefit liability, which comprises of actuarial gain and losses, return on plan assets(excluding interest), and the effect of the asset ceiling (if any, excluding interest) are recognized in other comprehensive income in the period in which they occur. The Company does not have any policy for leave encashment.

2.14 Provisions, contingent liabilities and contingent assets

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. Provisions are not recognized for future operating losses.

If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

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 embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial statements, however they are disclosed where the inflow of economic benefits is probable. When the realization of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.


Mar 31, 2015

1.1 General

a. The fnancial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting principles in India.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with signifcant uncertainties and exgratia which are accounted on cash basis.

1.2 Revenue recognition

a. In respect of commissioned content/ content produced/ acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/ content produced/ acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/ acquired, income is recognised on the following basis:

i. In respect of cinematic content, which is not complete i.e. under production, no income is recognised.

ii. In respect of cinematic content, which is complete but not released, income is recognised as – so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/ realisations/ confrmed contracts bears to the total expected realisations.

iii. In respect of cinematic content completed and released during the year income is recognised on release/ delivery of release prints except income, if any, already recognised as per clause c (ii)

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/ deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract.

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend on investments is accounted as and when received. Interest income is recognised on accrual basis.

1.3 Cinematic content

The cinematic content has been valued on the following basis:

a. Incomplete cinematic content : at lower of allocated/ identifed cost or net realisable value.

b. Abandoned/ shelved cinematic content : at lower of cost or net realisable value.

c. Completed cinematic content : at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under:

First release Second release Third release 50% 30% 20%

c. Residual rights are amortised on an equitable basis. The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

1.4 Television content

The television content has been valued on the following basis Unexploited television content : at lower of average of allocated cost or net realizable value.

Unfnished television content : at lower of average of allocated cost or net realizable value.

Production property : at lower of allocated cost or net realisable value.

Exploited television content is amortised as under Exploited television content : at lower of unamortised cost as estimated by the management on the following basis or net realizable value:

No unamortised costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above.

ii. The production costs are amortised as per the above referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

1.5 Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

1.6 Depreciation

a. Depreciation on tangible fxed assets is provided on the straight line method over the useful life of assets as prescribed under paret C of/ Schedule II of the Companies Act, 2013.

b. In case of assets whose useful life is already exhausted as on April 1, 2014, the carrying value, net of residual value and deferred tax has been adjusted in retained earning in accrodance with the requirements of Schedule II of the Companies Act, 2013.

c. No depreciation has been charged on the assets, which have not been put to use during the period.

d. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of addition and till month of deletion.

e. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

1.7 Taxation

Current tax: Provision for current tax for the year has been made after considering deduction/ allowances/ claims admissible to the Company under the Income Tax Act, 1961.

Deferred tax: Deferred tax is recognised, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be suffcient future taxable income available to realise such losses.

1.8 Investments

Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

1.9 Contingent liabilities

No provision has been made for liabilities, which are contingent in nature.

1.10 Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the balance sheet date; gains/ losses are refected in the statement of proft and loss.

c. Exchange difference on account of acquisition of fxed assets is adjusted to carrying cost of fxed assets.

1.11 Retirement benefts

a. Contributions are made to Provident Fund and charged to revenue wherever applicable.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity. The expense is recognised at the present value of the amount payable determined using actuarial gratuity report.

c. The Company does not have any policy for leave encashment.

1.12 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13 Impairment of assets

At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

1.14 Provisions and contingencies

The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outfow of resources and a reliable estimate can be made of the amount of the obligation. 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 outfow of resources. Where there is a possible obligation or a present obligation that the likelihood of outfow of resources is remote, no provision or disclosure is made.


Mar 31, 2014

1.1 General

a. The financial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting principles in India.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with significant uncertainties and ex-gratia which are accounted on cash basis.

1.2 Revenue recognition

a. In respect of commissioned content/content produced/acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/content produced/acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/acquired, income is recognised on the following basis

i. In respect of cinematic content, which is not complete i e under production, no income is recognised.

ii. In respect of cinematic content, which is complete but not released, income is recognised as-so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/realisations/confirmed contracts bears to the total expected realisations.

iii. In respect of cinematic content completed and released during the year, income is recognised on release/delivery of release prints except income, if any, already recognised as per clause (ii) above.

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract.

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend on investments is accounted as and when received. Interest income is recognised on accrual basis.

1.3 Cinematic content

The cinematic content has been valued on the following basis:

a. Incomplete cinematic content : at lower of allocated/identified cost or net realizable value.

b. Abandoned/shelved cinematic : at lower of cost or net realisable content value. c. Completed cinematic content : at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under:

First release Second release Third release

50% 30% 20%

c. Residual rights are amortised on an equitable basis.

The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

1.4 Television Content

The television content has been valued on the following basis:

Unexploited television content : at lower of average of allocated cost or net realizable value.

Unfinished television content : at lower of average of allocated cost or net realizable value.

Production property : at lower of allocated cost or net Exploited television content realisable value. is amortised as under

Exploited television content : at lower of unamortised cost as estimated by the management on the following basis or net realizable value:

Particulars 1st Telecast 2nd Telecast 3rd Telecast Residual value Entertainment 50% 30% 15% 5% content

Current affairs and

news based 95% - - 5% content

Commissioned 100% - - - content

No unamortised costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above.

ii. The production costs are amortised as per the above-referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

1.5 Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifiable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

1.6 Depreciation

Depreciation has been provided on Straight Line Method at the rates specified in schedule XIV of the Companies Act, 1956 as under

a. No depreciation has been charged on the assets, which have not been put to use during the period.

b. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of such addition/ deletion.

c. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

1.7 Taxation

Current tax: Provision for current tax for the year has been made after considering deduction/ allowances/ claims admissible to the Company under the Income Tax Act, 1961.

Deferred tax: Deferred tax is recognised on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

1.8 Investments

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

1.9 Contingent liabilities

No provision has been made for liabilities, which are contingent in nature.

1.10 Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the Balance Sheet date; gains/ losses are reflected in the Statement of Profit and Loss.

c. Exchange difference on account of acquisition of fixed assets is adjusted to carrying cost of fixed assets.

1.11 Retirement benefits

a. Contributions are made to Provident Fund and charged to revenue, wherever applicable.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity. The expense is recognised at the present value of the amount payable determined using actuarial gratuity report.

c. The Company does not have any policy for leave encashment.

1.12 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13 Impairment of Assets

At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

1.14 Provisions and contingencies

The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2013

1.1 General

a. The financial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting principles in India.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with significant uncertainties and ex-gratia which are accounted on cash basis.

1.2 Revenue recognition

a. In respect of commissioned content/ content produced/ acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/ content produced/ acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/ acquired, income is recognised on the following basis i. hi respect of cinematic content, which is not complete i e under production, no income is recognised ii. In respect of cinematic content, which is complete but not released, income is recognised as so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/ realisations/ confirmed contracts bears to the total expected realisations. iii. In respect of cinematic content completed and released during the year, income is recognised on release/ delivery of release prints except income, if any, already recognised as per clause (ii) above.

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/ deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend on investments is accounted as and when received. Interest income is recognised on accrual basis.

1.3 Cinematic content

The cinematic content has been valued on the following basis

a. Incomplete cinematic content : at lower of allocated/ identified cost or net realizable value.

b. Abandoned/ shelved cinematic content : at lower of cost or net realisable value.

c. Completed cinematic content : at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under First release Second release Third release 50% 30% 20%

c. Residual rights are amortised on an equitable basis.

The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation. ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

1.4 Television content

The television content has been valued on the following basis

Unexploited television content : at lower of average of allocated cost or net realizable value. Unfinished television content : at lower of average of allocated cost or net realizable value, Production properly : at lower of allocated cost or net realisable value. Exploited television content is amortised as under Exploited television content : at lower of unamortised cost as estimated by the management on the following basis or net realizable value

No unamortised costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above. ii. The production costs are amortised as per the above referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

1.5 Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifiable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

1.6 Depreciation

Depreciation has been provided on Straight Line Method at the rates specified in schedule XTV of the Companies Act, 1956 as under

a. No depreciation has been charged on the assets, which have not been put to use during the period.

b. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of such addition/ deletion.

c. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

1.7 Taxation

Current tax: Provision for current tax for the year has been made after considering deduction/ allowances/ claims admissible to the Company under the Income Tax Act, 1961. Deferred tax: Deferred tax is recognised on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

1.8 Investments

Long term investments are stated at cost Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

1.9 Writing off deferred revenue expenditures

Deferred revenue expenditure has been written off at 20% of die total cost.

1.10 Contingent liabilities

No provision has been made for liabilities, which are contingent in nature.

1.11 Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the balance sheet date; gains/ losses are reflected in the statement of profit and loss.

c. Exchange difference on account of acquisition of fixed assets is adjusted to carrying cost of fixed assets.

1.12 Retirement benefits

a. Regular contributions are made to Provident Fund and charged to revenue.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity. The expense is recognised at the present value of the amount payable determined using actuarial gratuity report

c. The Company does not have any policy for leave encashment

1.13 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.14 Impairment of Assets

At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount

1.15 Provisions and contingencies

The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outflow of resources and a reliable estimate can be made of die amount of the obligation. 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the financial statements.


Mar 31, 2012

1.1 General

a. The financial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting policies.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with significant uncertainties and ex-gratia which are accounted on cash basis.

1.2 Revenue recognition

a. In respect of commissioned content/ content produced/ acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/ content produced/ acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/ acquired, income is recognised on the following basis

i. In respect of cinematic content, which is not complete i.e. under production, no income is recognised.

ii. In respect of cinematic content, which is complete but not released, income is recognised as - so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/ realisations/ confirmed contracts bears to the total expected realisations.

iii. In respect of cinematic content completed and released during the year, income is recognised on release/ delivery of release prints except income, if any, already recognised as per clause (ii) above.

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/ deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract.

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend from investments is recognised when the right to receive the payment is established and when no significant uncertainty as to measurability or collectability exists. Interest income is recognised on accrual basis.

1.3 Cinematic content

The cinematic content has been valued on the following basis

a. Incomplete cinematic content : at lower of allocated/ identified cost or net realizable value.

b. Abandoned/ shelved cinematic content : at lower of cost or net realisable value.

c. Completed cinematic content : at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under First release Second release Third release 50% 30% 20%

c. Residual rights are amortised on an equitable basis.

The Company estimates useful life of the cinematic content over 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

1.4 Television content

The television content has been valued on the following basis

Unexploited television content : at lower of average of allocated cost or net realizable value.

Unfinished television content : at lower of average of allocated cost or net realizable value.

Production property : at lower of allocated cost or net realisable value.

Exploited television content is amortised as under

Exploited television content : at lower of unamortised cost as estimated by the management on the following basis or net realizable value

No unamortised costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above.

ii. The production costs are amortised as per the above-referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

1.5 Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifiable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

1.6 Depreciation

Depreciation has been provided on Straight Line Method at the rates specified in schedule XIV of the Companies Act, 1956 as under

a. No depreciation has been charged on the assets, which have not been put to use during the period.

b. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of such addition/ deletion.

c. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

1.7 Taxation

Current tax: Provision for current tax for the year has been made after considering deductions/ allowances/ claims admissible to the Company under the Income Tax Act, 1961.

Deferred tax: Deferred tax is recognised, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

1.8 Investments

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

1.9 Writing off deferred revenue expenditures

Deferred revenue expenditure has been written off at 20% of the total cost.

1.10 Contingent liabilities

No provision has been made for liabilities, which are contingent in nature.

1.11 Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the balance sheet date; gains/ losses are reflected in the statement of profit and loss.

c. Exchange difference on account of acquisition of fixed assets is adjusted to carrying cost of fixed assets.

1.12 Retirement benefits

a. Regular contributions are made to Provident Fund and charged to revenue.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity. The expense is recognised at the present value of the amount payable determined using gratuity report provided by LIC of India.

c. The Company does not have any policy for leave encashment.

1.13 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.14 Impairment of Assets

At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

1.15 Provisions and contingencies

The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2011

1. General

a. The financial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting policies.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with significant uncertainties and ex-gratia which are accounted on cash basis.

2. Revenue recognition

a. In respect of commissioned content/ content produced/ acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/ content produced/ acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/ acquired, income is recognised on the following basis

i. In respect of cinematic content, which is not complete ie under production, no income is recognised.

ii. In respect of cinematic content, which is complete but not released, income is recognised as – so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/ realisations/ confirmed contracts bears to the total expected realisations.

iii. In respect of cinematic content completed and released during the year, income is recognised on release/ delivery of release prints except income, if any, already recognised as per clause c (ii).

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/ deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract.

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend on investments is accounted as and when received.

3. Cinematic content

The cinematic content has been valued on the following basis

a. Incomplete cinematic content at lower of allocated/ identified cost or net realizable value.

b. Abandoned/ shelved cinematic at lower of cost or net content realisable value.

c. Completed cinematic content at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under

First release Second release Third release

50% 30% 20%

c. Residual rights are amortised on an equitable basis

The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The

production costs are revenue costs and are treated as such for the purposes of taxation. ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

4. Television content

The television content has been valued on the following basis

a. Unexploited television at lower of average of allocated content cost or net realizable value.

b. Unfinished television at lower of average of allocated content cost or net realizable value.

c. Production property at lower of allocated cost or net realisable value.

d. Exploited television content is amortised as under

Exploited television at lower of unamortised cost as content estimated by the management on the following basis or net realizable value

Particulars 1st 2nd 3rd Residual Telecast Telecast Telecast value

Entertainment 50% 30% 15% 5% content

Current affairs and news based content 95% - - 5%

Commissioned content 100% - - -

No unamortised costs shall be carried forward beyond a period of 10 years.

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above.

ii. The production costs are amortised as per the above-referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

5. Fixed Assets Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifiable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

6. Depreciation Depreciation has been provided on Straight Line Method at the rates specified in schedule XIV of the Companies Act, 1956 as under

a. No depreciation has been charged on the assets, which have not been put to use during the period.

b. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of such addition/ deletion.

c. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

7. Taxation Current tax: Provision for current tax for the year has been made after considering deduction/ allowances claims admissible to the Company under the Income Tax Act, 1961. Deferred tax: Deferred tax is recognised, on timing differences, being difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

8. Investments Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

Investments in subsidiaries being of strategic importance, the Company does not consider it necessary to provide for diminution in the book value of investments, till such relationship continues with the investee company.

9. Writing off preliminary expenses and share issue expenses Preliminary expenses have been written off at 10% of the total cost. Share issue expenses shall be adjusted/ written off against share premium account.

10. Writing off deferred revenue expenditures Deferred revenue expenditure has been written off at 20% of the total cost.

11. Contingent liabilities No provision has been made for liabilities, which are contingent in nature.

12. Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the balance sheet date; gains/ losses are reflected in the profit and loss account.

c. Exchange difference on account of acquisition of fixed assets is adjusted to carrying cost of fixed assets.

13. Retirement benefits

a. Regular contributions are made to Provident Fund and charged to revenue.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity.

c. The Company does not have any policy for leave encashment.

14. Borrowing costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

15. Impairment of Assets At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

16. Provisions and contingencies The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the financial statement.


Mar 31, 2010

1. General

a. The financial statements have been prepared as per historical cost convention and in accordance with generally accepted accounting policies.

b. Expenses and revenue are generally accounted for on accrual basis, except those associated with significant uncertainties and ex-gratia which are accounted on cash basis.

2. Revenue recognition

a. In respect of commissioned content/ content produced/ acquired, income is recognised as on date of delivery of Digi Betas.

b. In respect of sponsored content/ content produced/ acquired, income is recognised as and when the relevant content is telecast.

c. In respect of cinematic content produced/ acquired, income is recognised on the following basis

i. In respect of cinematic content, which is not complete i.e. under production, no income is recognised.

ii. In respect of cinematic content, which is complete but not released, income is recognised as - so much of the estimated income on release as bears to the whole of the estimated income the same proportion as the actual recoveries/ realisations/ confirmed contracts bears to the total expected realisations.

iii. In respect of cinematic content completed and released during the year, income is recognised on release/ delivery of release prints except income, if any, already recognised as per clause c (ii).

iv. In respect of cinematic content, which is complete but not released, income from streams other than theatrical release is recognised on the basis of contracts/ deal memo and delivery of Digi Betas.

v. In respect of music rights, income is recognised on its release or exploitation contract.

d. In respect of consultancy services, income is recognised as and when services are actually rendered resulting in enforceable claim.

e. Dividend on investments is accounted as and when received.

3. Cinematic content

The cinematic content has been valued on the following basis

a. Incomplete cinematic content : at lower of allocated/ identified cost or net realizable value.

b. Abandoned/ shelved cinematic content : at lower of cost or net realisable value.

c. Completed cinematic content : at lower of unamortised allocated cost as estimated by the management depending on the genre, nature and contents of the cinematic content or net realizable value.

The Company allocates cost of production amongst music rights, exhibition rights, other rights and residual rights on an equitable basis.

Basis of amortisation of allocated costs

a. Music rights are amortised at 100% on the basis of release of music/ exploitation contract.

b. All rights other than music and residual rights are amortised as under

First release Second release Third release 50% 30% 20%

c. Residual rights are amortised on an equitable basis.

The Company estimates useful life of the cinematic content at 20 years.

Notes

i. The production/ acquiring costs are amortised on the above basis by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

ii. No unamortised costs are retained once the entire rights in respect of the cinematic content are sold out on an outright basis.

4. Television content

The television content has been valued on the following basis

a. Unexploited television content : at lower of average of allocated cost or net realizable value.

b. Unfinished television content : at lower of average of allocated cost or net realizable value.

c. Production property : at lower of allocated cost or net realisable value.

d. Exploited television content is amortised as under

Exploited television content : at lower of unamortised cost as estimated by the management on the following basis or net realizable value

Notes

i. The Company amortises production costs in respect of television content once telecast and further retelecastable on the basis of the nature and contents of the television content and the expected number of telecasts as per the chart depicted above.

ii. The production costs are amortised as per the above-referred policy followed by the Company. The production costs are revenue costs and are treated as such for the purposes of taxation.

iii. The Company retains one copy of its own television content for record purpose.

5. Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises purchase price including any attributable cost of bringing the asset to its working condition for its intended use and any other identifiable direct expenses.

All expenditure incurred prior to commencement of project is carried forward as pre-operative expenditure which would be capitalised/ written off on commencement of business.

6. Depreciation Depreciation has been provided on Straight Line Method at the rates specified in schedule XIV of the Companies Act, 1956 as under

a. No depreciation has been charged on the assets, which have not been put to use during the period.

b. Depreciation on addition/ deletion to assets is calculated on a pro-rata basis from the month of such addition/ deletion.

c. Depreciation on improvement to leave and licence premises is calculated over the period of leave and licence.

7. Taxation Current tax: Provision for current tax for the year has been made after considering deduction/ allowances claims admissible to the Company under the Income Tax Act, 1961. Deferred tax: Deferred tax is recognised, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

8. Investments Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost or market value.

Investments in subsidiaries being of strategic importance, the Company does not consider it necessary to provide for diminution in the book value of investments, till such relationship continues with the investee company.

9. Writing off preliminary expenses and share issue expenses Preliminary expenses have been written off at 10% of the total cost. Share issue expenses shall be adjusted/ written off against share premium account.

10. Writing off deferred revenue expenditures Deferred revenue expenditure has been written off at 20% of the total cost.

11. Contingent liabilities No provision has been made for liabilities, which are contingent in nature.

12. Foreign currency transactions

a. Transactions in foreign currency are recorded at the rate prevailing on the date when the amount is received or remitted.

b. Foreign currency assets and liabilities are converted into rupee at the exchange rate prevailing on the balance sheet date; gains/ losses are reflected in the profit and loss account.

c. Exchange difference on account of acquisition of fixed assets is adjusted to carrying cost of fixed assets.

13. Retirement benefits

a. Regular contributions are made to Provident Fund and charged to revenue.

b. The Company contributes to Employees Group Saving Linked Insurance Scheme with Life Insurance Corporation of India to cover its liability towards employee gratuity.

c. The Company does not have any policy for leave encashment.

14. Borrowing costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. The qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

15. Impairment of assets At Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

16. Provisions and contingencies The Company recognises a provision when there is a present obligation as a result of past events, that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the financial statement.

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