Mar 31, 2010
1.1 Basis of Preparation
The Financial statements have been prepared on the historical cost convention on going concern basis, in accordance with Generally Accepted Accounting Principles, the relevant provisions of the Companies Act, 1956 complying in all materials respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The company generally follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.
1.2 Use of Estimates
The preparation of the financial statement in conformity with the GAAP requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of financial statements, and the reported amounts of revenue and expenses during the reported year. Examples of such estimate include estimated useful life of fixed assets. Actual results could differ from those estimates.
1.3 Principles of Consolidation
The consolidated financial statements relate the company (Sanraa Media Limited) and its Subsidiaries (Sanraa Global Green Energy Limited and G4 Infocom Pte Ltd). The consolidated financial statements have been prepared on the following basis:
(i)The Financial statements of the Company and its subsidiaries are combined on a line by line basis, by adding the like items of assets, liabilities, income and expenses after fully eliminating intra group balances and intra group transactions resulting in unrealized profit or losses in accordance with the Accounting standard (AS - 21) "Consolidated Financial Statements"
(ii) The Company does not have minority shareholders therefore there is no need to disclose the adjustment of minority interest share of net profit or loss against income of the company and also the share of net assets as a separate item from liabilities in the consolidated Balance Sheet.
(iii) The Consolidated Financials statements are prepared using uniform Accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the stand alone financial statement of the Company
(iv) Investments other than in subsidiary are accounted as per AS 13 " Accounting for Investments"
(v) Previous year figures have not been indicated in the absence of Holding-subsidiary relationship.
1.4 Fixed Assets
Fixed assets are stated at historical cost after reducing accumulated depreciation until the date of the Balance Sheet.
Direct costs are capitalised until the assets are ready for use and include financing costs relating to borrowing attributable to acquisition.
Software (asset) represents the capitalised cost of expenditures such as rent, salaries, power, relevant overheads and test marketing expenses incurred in the earlier years towards the development of softwares.
Goodwill represents the difference between the purchase price and the book value of assets and liabilities acquired.
IPRS represent the cost of acquisition of film distribution rights.
Depreciation is recognised only in respect of Fixed Assets put to use.
Individual assets acquired for less than Rs 5000/- are entirely depreciated in the year of acquisition.
Depreciation on other Fixed Assets have been provided on written down value on a pro rata monthly basis at the rates specified in Schedule XIV of the companies Act, 1956.
Intangible assets such as software and goodwill are amortised over the estimated useful life of the assets determined by the management.
1.6 Revenue recognition
Animation development service revenue is recognized on proportionate completion method on the total value of the contracts.
Revenue from animation academy and E-learning are recognized proportionate to the period of instruction.
Income from Media trading activity is recognized upon execution of agreements for sale and purchase.
1.7 Foreign currency transactions
Foreign Currency transaction arises on account of export of software services.
The transactions on export of services are recorded as per the rates prevailing on the date of rendering services.
Exchange differences arising upon collection from such transactions are charged or credited to the profit and loss account.
1.8 Retirement Benefits
The contribution payable by the company to Provident Fund is charged to revenue. The liability for Gratuity to employees as at the Balance Sheet date is determined on the basis of actuarial valuation using Projected Unit Credit method The liability thereof paid/payable is absorbed in the accounts. The actuarial gains/losses are recognized in the Profit and Loss Account.
1.9 Miscellaneous expenditure
The company has accumulated in the earlier years Research and Development expenses on software as miscellaneous expenditure (Assets).
The company has written off such expenditure on straight line method, in proportion to the period of its utility estimated by the management.
1.10 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year and determined in accordance with provisions of the income tax act, 1961.
Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income computed using the tax rates and the laws that have been enacted or substantively enacted as of the Balance sheet date. Deferred tax assets are recognized only if there is a virtual certainty that there will be realized and reviewed for the appropriateness of their carrying values at each Balance sheet date.
1.11 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a result of past vents and it is probable that an outflow of resources will be required to settle the obligations, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent Liability is disclosed for possible obligation which will be confirmed only by future events not wholly within the control of the company (or) Present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or reliable estimate of the amount of obligation cannot be made. Contingent asset not recognized in the financial statements since this may result in the recognition of income that may never be realized.
1.12 Interim Financial Reporting
The company has adopted in the preparation of interim financial statements, the accounting policies, consistent with those of the annual financial statements.