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Accounting Policies of Pritish Nandy Communications Ltd. Company

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, 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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