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Notes to Accounts of Pritish Nandy Communications Ltd.

Mar 31, 2015

NOTE 1.

The Company is engaged in the production/ making of cinematic and television content, which requires various types, qualities and quantities of raw materials and inputs in different denominations. Due to the multiplicity and complexity of the items it is not practicable to maintain the quantitative record/ continuous stock register, as the process of making content is not amenable to the same. Hence quantitative details are not maintained. Physical stock of fnished content is taken at the end of year.

NOTE 2.

Arbitration proceedings initiated by the Company against Prasar Bharati on account of wrongful encashment of bank guarantees of R 75,050,000 were ongoing before former Chief Justice YV Chandrachud. The parties completed the pleadings before the Arbitrator but unfortunately he passed away in July 2008 while the cross examinations were on. The Company had fled a petition before the Hon. High Court at Bombay for appointment of a sole Arbitrator in place and stead of Justice Chandrachud in January 2009. The Bombay High Court appointed Justice BN Srikrishna, former Judge of Supreme Court of India as Sole Arbitrator vide order dated November 27, 2009 and the arbitration proceedings are ongoing. Opinion obtained by the Company from Justice AM Ahmadi, former Chief Justice of the Supreme Court of India, supports the Company's stand that the amount is fully recoverable. In view of this, the management of the Company does not consider it necessary to make a provision there against in the accounts. The Company is showing amount withheld by Prasar Bharti as "Long Term Loans and Advances".

NOTE 3.

Accounting Standard (AS) 26 on "Intangible Assets" states that in the absence of persuasive evidence, there is presumption that intangible assets have a useful life of 10 years. In respect of cinematic content, the Company has persuasive evidence that the useful life of cinematic content is over 20 years.

The management has considered the following factors viz. the expected usage of the asset by the enterprise, typical product life cycles, technical, technological or other types of obsolescence, expected actions by competitors or potential competitors, the level of maintenance expenditure required to obtain the expected future economic benefts from the asset, the period of control over the asset, the useful life of the asset and for reasons viz. shelf lives of movies have substantially increased since 2000, getting better value for longer lease in excess of ten years, emergence of channels dedicated only for featuring content more than ten years old, growth in the number of distribution channels, rapid multiplication of remaking, animation and other new The total cost of content as at March 31, 2015 is R 537,125,897. Based on a review of estimates of future realisations taken as a whole, the management is of the view that future recoverable amount from content rights to be more than its carrying unamortised cost of content. Hence, no impairment/ write down is considered necessary on this account.

There is no individual content that is material to the fnancial statements of the Company as a whole. There is no content whose title is restricted. The content was pledged to Ye s Bank Ltd as security for overdraft facility of R 50,000,000.

NOTE 4.

As per Accounting Standard (AS) 28 on "Impairment of Assets", the Company has assessed whether there is any indications that any assets has impaired. Since the carrying amount is less than the recoverable amount, there is no necessity for making any provision for impairment.

NOTE 5.

SEGMENT INFORMATION

During the year, the Company operated in only one business segment viz content segment.

NOTE 6.

RELATED PARTY DISCLOSURE

In accordance with Accounting Standard (AS) 18 "Related Party Disclosure", the disclosure in respect of transactions with the companies related parties are as given below:

1. Subsidiaries of the Company a. PNC Digital Ltd

b. PNC Wellness Ltd (wholly owned subsidiary)

2. Key managerial personnel a. Pallab Bhattacharya – Wholetime Director and CEO

b. Rangita Pritish Nandy – Wholetime and Creative Director

c. Rupali Vaidya – Erstwhile Company Secretary

3. Non executive Directors a. Pritish Nandy – Non Executive Chairman and their relationships b. Rina Pritish Nandy – Non Executive Director

c. Udayan Bose – Non Executive, Independent Director

d. Nabankur Gupta – Non Executive, Independent Director

e. Vishnu Kanhere – Non Executive, Independent Director

f. Hema Malini – Non Executive, Independent Director

g. Ishita Pritish Nandy – daughter of Non Executive Chairman

Related Party relationship is as identifed by the Company and relied upon by the Auditors.

The Company has incurred loss during the year. In view of the loss and based on effective capital of the Company, managerial remuneration as prescribed by Schedule V read with Section 197 of the Companies Act 2013 is restricted to R 4,200,000 for the year. The company has paid managerial remuneration of R 5,754,000 which is in excess of the limits prescribed by R 1,554,000. The excess remuneration paid is subject to approval of the shareholders of the Company by a special resolution in the forthcoming annual general meeting. Alternatively the same shall be recoverable from the managerial personnel.

NOTE 7.

The company has an investment of R 29,100,000 (L Y R 29,100,000) in equity shares of wholly owned subsidiary viz PNC Wellness Limited and of R 7,019,700 (L Y R 7,019,700) in equity shares of subsidiary viz PNC Digital Limited as at March 31, 2015. Further temporary advances of R 21,843,002 given to wholly owned subsidiary viz PNC Wellness Limited towards operating expenses were waived and written off during the year to support the revival of the subsidiary.

NOTE 8.

Loans and Advances of R 46,753,181 includes: i) R 15,000,000 advanced against the Music, Asian and Indian Satellite rights of a flm, where the Company has lien over the exploitation of the said rights and ii) R 31,753,181 being balance amount advanced towards joint production of a flm where the Company has joint re-exploitation rights. The Company has initiated recovery proceedings in respect of the aforesaid advances. i) The Company has fled a Summary Suit with the Hon. High Court at Bombay which is pending hearing and disposal and ii) The Company has initiated arbitration proceedings which are ongoing before Justice Smt KK Baam (Retired). The management considers the same are good and fully recoverable. Legal opinion obtained by the Company from SF Rego, Judge (Retired), City Civil and Sessions Court, Mumbai, supports this and consequently no provision has been made in the accounts at this stage. The Company is showing these amounts as "Long Term Loans and Advances".

NOTE 9.

In the opinion of the management investments, current assets and loans and advances are of the value stated in the fnancial statements are realisable in the ordinary course of business. The provisions for all known liabilities and depreciation are adequate and are not in excess of the amounts considered, reasonably necessary.

NOTE 10.

There are no dues payable to the Investor Education and Protection Fund as at March 31, 2015.

NOTE 11.

All known liabilities have been provided in the books of accounts.

NOTE 12.

The previous year fgures have been regrouped/ reclassifed, wherever necessary to bring conformity to the current year's presentation.


Mar 31, 2014

1. SHORT TERM BORROWINGS

The Company has not received any intimation from suppliers regarding the status under The Micro, Small And Medium Enterprises Development Act, 2006. Accordingly, disclosure as required by the said Act is made on that basis.

2. CINEMATIC AND TELEVISION CONTENT

Trade receivables over six months includes an amount aggregating to R 1,185,000 (L Y R 2,985,000) in respect of which legal proceedings have been initiated by the company. The management considers the same are good and fully recoverable; hence no provision has been made in the accounts at this stage.

3. The Company is engaged in the production/ making of cinematic and television content, which requires various types, qualities and quantities of raw materials and inputs in different denominations. Due to the multiplicity and complexity of the items it is not practicable to maintain the quantitative record/ continuous stock register, as the process of making content is not amenable to the same. Hence quantitative details are not maintained. Physical stock of finished content is taken at the end of the year.

4. Arbitration proceedings initiated by the Company against Prasar Bharati on account of wrongful encashment of bank guarantees of Rs. 75,050,000 were ongoing before former Chief Justice YV Chandrachud. The parties completed the pleadings before the Arbitrator but unfortunately he passed away in July 2008 while the cross examinations were on. The Company had filed a petition before the Hon. High Court at Bombay for appointment of a sole Arbitrator in place and stead of Justice Chandrachud in January 2009. The Bombay High Court appointed Justice BN Srikrishna, former Judge of Supreme Court of India as sole Arbitrator vide order dated November 27, 2009 and the arbitration proceedings are ongoing. Opinion obtained by the Company from Justice AM Ahmadi, former Chief Justice of the Supreme Court of India, supports the Company''s stand that the amount is fully recoverable. In view of this, the management of the Company does not consider it necessary to make a provision there against in the accounts. The Company is showing amount withheld by Prasar Bharti as "Long Term Loans and Advances".

5. Accounting Standard (AS) 26 on "Intangible Assets" states that in the absence of persuasive evidence, there is presumption that intangible assets have a useful life of 10 years. In respect of cinematic content, the Company has persuasive evidence that the useful life of cinematic content is over 20 years.

The management has considered the following factors viz the expected usage of the asset by the enterprise, typical product life cycles, technical, technological or other types of obsolescence, expected actions by competitors or potential competitors, the level of maintenance expenditure required to obtain the expected future economic benefits from the asset, the period of control over the asset, the useful life of the asset and for reasons viz shelf lives of movies have substantially increased since 2000, getting better value for longer lease in excess of ten years, emergence of channels dedicated only for featuring content more than ten years old, growth in the number of distribution channels, rapid multiplication of remaking, animation and other new versions etc, and hence is of the view that the useful life of the cinematic content is 20 years. Hence, amortisation of Rs. 103,457,552 in respect of cinematic content having life of more than 10 years, is not required to be made. The Company is in line with International Accounting Practices and is a step towards complying with IFRS norms.

The total cost of content as at March 31, 2014 is Rs. 403,812,765. Based on a review of estimates of future realisations taken as a whole, the management is of the view that future recoverable amount from content rights to be more than its carrying unamortised cost of content. Hence, no impairment/ write down is considered necessary on this account.

There is no individual content that is material to the financial statements of the Company as a whole. There is no content whose title is restricted. The content was pledged to yes bank Ltd as security for working capital loan of Rs. 50,000,000 which has been squared-off during the year.

6. As per Accounting Standard (AS) 28 on "Impairment of Assets", the Company has assessed whether there is any indications that any assets has impaired. Since the carrying amount is less than the recoverable amount, there is no necessity for making any provision for impairment.

7. Segment information:

During the year, the Company operated in only one business segment viz content segment.

8. Related Party Disclosure

In accordance with Accounting Standard (AS) 18 "Related Party Disclosure", the disclosure in respect of transactions with the companies related parties are as given below:

9. The company has an investment of Rs. 29,100,000 (L Y Rs. 29,100,000) in wholly owned subsidiary viz PNC Wellness Limited as at March 31, 2014. Further temporary advances of Rs. 18,868,870 were receivable as at March 31, 2014.

10. Loans and Advances of Rs. 46,753,181 includes: i) Rs. 15,000,000 advanced against the Music, Asian and Indian Satellite rights of a film, where the Company has lien over the exploitation of the said rights and ii) Rs. 31,753,181 being balance amount advanced towards joint production of a film where the Company has joint re-exploitation rights. The Company has initiated recovery proceedings in respect of the aforesaid advances. i) The Company has filed a Summary Suit with the Hon. High Court at Bombay which is pending hearing and disposal and ii) The Company has initiated arbitration proceedings which are ongoing before Justice Smt KK Baam (Retired). The management considers the same are good and fully recoverable. Legal opinion obtained by the Company from SF Rego, Judge (Retired), City Civil and Sessions Court, Mumbai, supports this and consequently no provision has been made in the accounts at this stage. The Company is showing these amounts as "Long Term Loans and Advances".

11. In the opinion of the management investments, current assets and loans and advances are of the value stated in the financial statements are realisable in the ordinary course of business. The provisions for all known liabilities and depreciation are adequate and are not in excess of the amounts considered, reasonably necessary. NOTE 40

There are no dues payable to the Investor Education and Protection Fund as at March 31, 2014.

12. All known liabilities have been provided in the books of accounts.

13. The previous year figures have been regrouped/ reclassified, wherever necessary to bring conformity to the current year''s presentation.


Mar 31, 2013

NOTE 1

The Company is engaged in the production/ making of cinematic and television content, which requires various types, qualities and quantities of raw materials and inputs in different denominations. Due to the multiplicity and complexity of the items it is not practicable to maintain the quantitative record/ continuous stock register, as the process of making content is not amenable to the same. Hence quantitative details are not maintained. Physical stock of finished content is taken at the end of year.

NOTE 2

Arbitration proceedings initiated by the Company against Prasar Bharati on account of wrongful encashment of bank guarantees of 75,050,000 were ongoing before former Chief Justice YV Chandrachud. The parties completed the pleadings before the Arbitrator but unfortunately he passed away in July 2008 while the cross examinations were on. The Company had filed a petition before the Hon. High Court at Bombay for appointment of a sole Arbitrator in place and stead of Justice Chandrachud in January 2009. The Bombay High Court appointed Justice BN Srikrishna, former Judge of Supreme Court of India as Sole Arbitrator vide order dated November 27, 2009 and the arbitration proceedings are ongoing. Opinion obtained by the Company from Justice AM Ahmadi, former Chief Justice of the Supreme Court of India, supports the Company''s stand that the amount is fully recoverable. In view of this, the management of the Company does not consider it necessary to make a provision there against in the accounts. The Company is showing amount withheld by Prasar Bharti as "Long Term Loans and Advances''*.

NOTE 3

Accounting Standard (AS) 26 on "Intangible Assets" states that in the absence of persuasive evidence, there is presumption that intangible assets have a useful life of 10 years. In respect of cinematic content the Company has persuasive evidence that the useful life of cinematic content is over 20 years.

The management has considered the following factors viz the expected usage of the asset by the enterprise, typical product life cycles, technical, technological or other types of obsolescence, expected actions by competitors or potential competitors, the level of maintenance expenditure required to obtain the expected future economic benefits from the asset, the period of control over the asset, the useful life of the asset and for reasons viz. shelf lives of movies have substantially increased since 2000, getting better value for longer lease in excess often years, emergence of channels dedicated only for featuring content more man ten years old, growth in the number of distribution channels, rapid multiplication of remaking, animation and other new versions etc, and hence is of the view that the useful life of die cinematic content is 20 years. Hence, amortisation of 112,075,738 is not required to be made. The Company is in line with International Accounting Practices and is a step towards complying with IFRS norms which will become mandatory from 2014.

NOTE 4

As per Accounting Standard (AS) 28 on "Impairment of Assets", the Company has assessed whether there are any indications that any assets have impaired. Since the carrying amount is less than the recoverable amount, there is no necessity for making any provision for impairment.

NOTE 5

Segment information

During the year, die Company operated in only one business segment viz content segment

NOTE 6

Related party disclosure

hi accordance with Accounting Standard (AS) 18 "Related Party Disclosure", the disclosure in respect of transactions with the companies related parties are as given below

i. Subsidiaries of the Company a. PNC Productions Ltd

b. PNC Wellness Ltd (wholly owned subsidiary) ii. Key managerial personnel a. Pallab Bhattacharya - Wholetime Director and CEO

b. Rangita Pritish Nandy - Wholetime Director and Creative Director

c. Rupali Vaidya Company Secretary

iii. Non executive Directors and their relatives a. Pritish Nandy-Non Executive Chairman

b. Rina Pritish Nandy - Non Executive Director

c. Udayan Bose - Non Executive, Independent Director

d. Nabankur Gupta Non Executive, Independent Director

e. Vishnu Kanhere - Non Executive, Independent Director

f. Tapan Chaki - Non Executive, Independent Director

g. Hema Malini - Non Executive, Independent Director h. Ishita Pritish Nandy - Daughter of Non Executive Chairman

NOTE 7

The company has an investment of 29,100,000 (L Y 29,100,000) in wholly owned subsidiary viz PNC Wellness Ltd as at March 31,2013. Further temporary advances of 5,369,753 were receivable as at March 31,2013,

NOTE 8

In view of loss, no provision has been made for income tax liability during the year.

NOTE 9

Loans and advances of 46,753,181 includes: i) 15,000,000 advanced against the Music, Asian and Indian Satellite rights of a film, where the Company has lien over the exploitation of the said rights and ii) 31,753,181 being balance amount advanced towards joint production of a film where the Company has joint re-exploitation rights. The Company has initiated recovery proceedings in respect of the aforesaid advances i) The Company has filed a Summary Suit with the Hon. High Court at Bombay which is pending hearing and disposal and ii) The Company has initiated arbitration proceedings which are ongoing before Justice Smt KK Baam (Retired). The management considers the same are good and fully recoverable. Legal opinion obtained by the Company from SF Rego, Judge (Retired), City Civil and Sessions Court, Mumbai, supports this and consequently no provision has been made in the accounts at this stage. The Company is showing these amounts as "Long Term Loans and Advances".

NOTE 10

In the opinion of the management investments, current assets and loans and advances are of the value stated in the financial statements are realisable in the ordinary course of business. The provisions for all known liabilities and depreciation are adequate and are not in excess of the amounts considered, reasonably necessary.

NOTE 11

There are no dues payable to the Investor Education and Protection Fund as at March 31,2013.

NOTE 12

All known liabilities have been provided in the books of accounts.

NOTE 13

Refer annexure for additional information to Part IV of Schedule VI to the Companies Act, 1956.

NOTE 14

The previous year figures have been regrouped/ reclassified, wherever necessary to bring conformity to the current year''s presentation.


Mar 31, 2012

NOTF 1.1

Company has only one class of share referred to as equity share with voting right.

NOTE 2

The Company is engaged in the production/ making of cinematic and television content, which requires various types, qualities and quantities of raw materials and inputs in different denominations. Due to the multiplicity and complexity of the items it is not practicable to maintain the quantitative record/ continuous stock register, as the process of making content is not amenable to the same. Hence quantitative details are not maintained. Physical stock of finished content is taken at the end of year. The Ministry of Corporate Affairs vide its Notification dated February 8, 2011 has granted exemption from giving quantitative details of para 3(ii)(a)(I) & (2) of Part II, Schedule VI to the Companies Act, 1956 to manufacturing Companies like our Company. The Board has given the consent required under the aforesaid notification.

NOTE 3

Arbitration proceedings initiated by the Company against Prasar Bharati on account of wrongful encashment of bank guarantees of Rs. 75,050,000 were ongoing before former Chief Justice YV Chandrachud. The parties completed the pleadings before the Arbitrator but unfortunately he passed away in July 2008 while the cross examinations were on. The Company had filed a petition before the Hon. High Court at Bombay for appointment of a sole Arbitrator in place and stead of Justice Chandrachud in January 2009. The Bombay High Court appointed Justice BN Srikrishna, former Judge of Hon. Supreme Court of India as Sole Arbitrator vide order dated November 27, 2009 and the arbitration proceedings are ongoing. Opinion obtained by the Company from Justice AM Ahmadi, former Chief Justice of the Supreme Court of India, supports the Company's stand that the amount is fully recoverable. In view of this, the management of the Company does not consider it necessary to make a provision there against in the accounts. The Company is showing amount withheld by Prasar Bharti as "Long Term Loans and Advances".

NOTE 4

Accounting Standard (AS) 26 on "Intangible Assets" states that in the absence of persuasive evidence there is a presumption that intangible assets have a useful life of 10 years. In respect of cinematic content, the Company has persuasive evidence that the useful life of cinematic content is over 20 years.

The management has considered the following factors viz. the expected usage of the asset by the enterprise, typical product life cycles, technical, technological or other types of obsolescence, expected actions by competitors or potential competitors, the level of maintenance expenditure required to obtain the expected future economic benefits from the asset, the period of control over the asset, the useful life of the asset and for reasons viz. shelf lives of movies have substantially increased since 2000, getting better value for longer lease in excess of ten years, emergence of channels dedicated only for featuring content more than ten years old, growth in the numbers of distribution channels, rapid multiplication of remaking, animation and other new versions etc. is of the view that the useful life of the cinematic content is over 20 years. Hence, amortisation of t 46,444,466 is not required to be made. The Company is in line with International Accounting Practices and this is a step towards complying with IFRS norms which will become mandatory from 2014.

There is no individual content that is material to the financial statements of the Company as a whole. There is no content whose title is restricted. The cinematic content of carrying value of Rs. 413,771,841 is pledged to Yes Bank Ltd as security for working capital loan of Rs. 50,000,000.

The total cost of content as at March 31, 2012 is Rs. 443,437,138. Based on a review of estimates of future realisations taken as a whole, the management is of the view that future recoverable amount from content rights to be more than its carrying unamortised cost of content. Hence, no impairment/ write down is considered necessary on this account.

NOTE 5

As per Accounting Standard (AS) 28 on "Impairment of Assets", the Company has assessed whether there is any indications that any assets has impaired. Since the carrying amount is less than the recoverable amount, there is no necessity for making any provision for impairment.

NOTE 6

Segment information

During the year, Company operated in only one business segment viz content business.

NOTE 7

Related Party Disclosure

In accordance with Accounting Standard (AS) 18 "Related Party Disclosure", the disclosure in respect of transactions with the Company's related parties are as given below

i. Subsidiaries of the Company

a. PNC Productions Ltd

b. PNC Wellness Ltd

(wholly owned subsidiary)

ii. Key managerial personnel

a. Pal lab Bhattacharya - Wholetime Director and CEO

b. Rangita Pritish Nandy - Wholetime Director and Creative Director

c. Anand Upadhyay - Company Secretary (Resigned wef January 9, 2012)

d. Rupali Vaidya - Company Secretary (Appointed wef January 9, 2012)

iii. Non executive Directors ;ind their relatives a. Pritish Nandy - Non-Executive Chairman

b. Rina Pritish Nandy - Non-Executive Director

c. Udayan Bose - Non-Executive, Independent Director

d. Nabankur Gupta - Non-Executive, Independent Director

e. Vishnu Kanhere - Non-Executive, Independent Director

f. Tapan Chaki - Non-Executive, Independent Director

g. Hema Malini - Non-Executive, Independent Director

h. Ishita Pritish Nandy - daughter of Non-Executive Chairman

NOTE 8

The Company has incurred loss during the year. Managerial remuneration paid/ payable is within the limit of minimum remuneration payable as per Part II of Schedule XIII of the Companies Act, 1956. The payment of remuneration is duly approved by the Remuneration Committee.

NOTE 9

The company has an investment of Rs. 29,100,000 (LY Rs. 5,100,000) in wholly owned subsidiary viz PNC Wellness Limited as at March 31, 2012. Further temporary advances of Rs. 713,510 were receivable as at March 31, 2012.

NOTE 10

In view of loss, no provision has been made for income tax liability during the year.

NOTE 11

Loans and Advances of f 46,753,181 includes: i) f 15,000,000 advanced against the Music, Asian and Indian Satellite rights of a film, where the Company has lien over the exploitation of the said rights and ii) Rs. 31,753,181 being balance amount advanced towards joint production of a film where the Company has joint re-exploitation rights. The Company has initiated recovery proceedings in respect of the aforesaid advances, i) The Company has filed a Summary Suit with the Hon. High Court at Bombay which is pending hearing and disposal and ii) The Company has initiated arbitration proceedings which are ongoing before Justice Smt KK Baam (Retired). The management considers the same are good and fully recoverable. Legal opinion obtained by the Company from SF Rego, Judge (Retired), City Civil and Sessions Court, Mumbai, supports this and consequently no provision has been made in the accounts at this stage.

NOTE 12

Balances of trade receivable, trade payables and loans and advances are subject to confirmation by the respective parties.

NOTE 13

In the opinion of the management investments, current assets and loans and advances are of the value stated in the financial statements are realisable in the ordinary course of business. The provisions for all known liabilities and depreciation are adequate and are not in excess of the amounts considered, reasonably necessary.

NOTE 14

There are no dues payable to the Investor Education and Protection Fund as at March 31, 2012.

NOTE 15

All known liabilities have been provided in the books of accounts.

NOTE 16

The previous year figures have been regrouped/ reclassified wherever necessary to bring conformity to the current year's presentation.

 
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