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Accounting Policies of Saregama India Ltd. Company

Mar 31, 2015

(a) Basis of the Preparation of the Financial Statements

These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain Tangible Fixed Assets which are being carried at revalued amounts (as indicated in Notes 11.1,11.2,11.3 and 11.4). Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies ( Accounts ).Rules,2014, till the standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National F inancial Reporting Authority, the existing Accounting Standards notified under the Companies Act,

1956 shall continue to apply.Consequently, these financial statements are prepared to comply in all material aspects, with the accounting standards notified under Section 211 (3C) [Companies (Accounting Standards) Rules 2006 as amended] and the other relevant provisions of the Companies Act, 2013. -

All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products / service and the time between the acquisition of assets for processing / providing the services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non current classification of assets and liabilities.

(b) Use of Estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the balance sheet date, the reported amount of revenue and expenses for the period and disclosure of contingent liability as at the balance sheet date. The estimates and assumptions used in the financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from estimates.

(c) Fixed Assets

(i) Tangible Assets -

Tangible Fixed Assets are stated at their original cost less depreciation, where applicable, other than revalued items which are stated -

at valuation less depreciation, where applicable, as referred to in Notes 11.1,11.2,11.3 and 11.4.

Impairment loss is recognised wherever the carrying amount of tangible fixed assets of a cash generating unit exceeds its recoverable . -

amount (i.e. higher of net selling price and value in use).

(ii) Intangible Assets

The cost incurred for producing / purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are recognised as intangible asset in the year of release at 50% of the cost of making the film including negatives or purchase cost.

Outright acquisition ofmusic copyrights wherein future economic benefits are established are capitalised.

Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use.

Impairment loss is recognised wherever the carrying amount of intangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(d) Depreciation/Amortisation

Depreciation on, original cost and amount added on revaluation of tangible fixed assets is provided on a pro rata basis on the straight line method based on the estimated useful lives of the asset as prescribed under Schedule II to the Companies Act, 2013 which is in line with the technical evaluation carried out during the year by the Company''s expert. (Also ReferNote 28.1)

Feature Films / Music Copyrights are amortised on straight line basis over a period of 1-10 years. The Company reviews the expected future revenue potential at the end of each accounting period for appropriate adjustments, where required.

Softwares are amortised on a straight line basis over a period of three years from the date of capitalisation.

(e) Investments

Long term investments are stated at cost / cost less write down. Provision for diminution is made to recognise a decline other than '' temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review. Currentinvestmentsarecarriedatlowerofcostandfairvalue.

(f) Inventories

Inventories are valued at lower of cost and net realisable value. -

(i) Raw Materials and Finished Goods

The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete / slow moving / defective stocks, where necessary.

(ii) Television Serials

Television serials under production are included under ''Work-in-Progress'' at cost or under.

Untelecasted television serials are stated at lower of cost and net expected revenue and included under ''Finished Goods''.

(g) Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered. Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such - contribution is recognised as expense and funded.

Liability towards gratuity (defined benefit), covering eligible employees, is provided on the basis of year-end actuarial valuation using Proj ected Unit Credit Method. Gratuity is fUnded.

Accrued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation using Projected Unit Credit Method is recognised as charge.

Contribution towards provident fund to Government administered provident fund is recognised as expense.

Actuarial gains / losses arising in Defined Benefit Plans are recognised immediately in the Statement of Profit and Loss as income / expense for the year in which they occur.

Termination benefits represent compensation towards Voluntary Retirement Scheme which is expensed on accrual of liability.

(h) Sales and Licence Fees

Revenue from sales is recognised on transfer of significant risks and rewards of ownership to customers based on agreement with the customers. Licence Fees represent income from music rights.

Revenue relating to television serials is recognised on the basis of telecast / delivery of content, as applicable.

(i) Royalty

Minimum Guarantee Royalty is recognised as expense within the license period or ten years, whichever is earlier.

Royalty on sales, other than physical sales, is provided on the basis of management''s best estimate of the expenditure required to settle the obligation.

Other royalty payments are charged at agreed rates on related sales.

(j) Foreign Currency Transactions .

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates.The resultant exchange differences arising from settlement of foreign currency transaction and from year-end restatement are recognised in the Statement of Profit and Loss.

(k) Borrowing Cost

Borrowing costs, if any, attributable to the acquisition and construction of qualifying assets are added to the cost upto the date when such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in which these are incurred.

(l) Taxes on Income '' -

Current tax is provided as the amount of tax payable in respect of taxable income for the year measured using the applicable tax rules and laws.

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a virtual / reasonable certainty, as applicable, in keeping with Accounting Standard 22 on ''Accounting for Taxes on Income'' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax in excess of MAT during the specified period. Such asset is reviewed at each Balance Sheet date and the canying 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 in excess of MAT during the specified period.

(m) Provisions and Contingent Liabilities

Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation as at the Balance Sheet date and are not discounted to its present value.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

11.1 Based on valuation reports of valuers, appointed for the purpose, the tangible fixed assets (other than furniture and fittings, office equipment, vehicles and certain items of plant and equipment) were revalued on 31st March, 1984 and again (except for those relating to record making machinery items) on 30th September, 1987 after considering the then (a) current market value/ derived rates attributable to land (b) current replacement cost after depreciation etc. and an amount ofRs.587.31 lacs and Rs.628.19 lacs were added to the book value of the related assets (with corresponding credit to Fixed Asset Revaluation Reserve) on 31 st March, 1984 and 30th September, 1987 respectively.

11.2 Certain tangible fixed assets of the Company viz Land and Buildings were revalued in June 2003 by registered valuers at the lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs.2,374.11 lacs were added to the book value of the related assets with utilisation of the corresponding credit amount pursuant to an approved scheme of arrangement.

11.3 Company''s land was revalued on 31 st March, 2007 by registered valuers, at lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs.4,421.30 lacs were added to the book value of land with corresponding credit to Revaluation Reserve of Rs.2,697.56 lacs and utilisation of the balance amount of Rs.1,723.74 lacs pursuant to a sanctioned scheme of amalgamation of erstwhile Saregama Films Limited with the Company in 2006-07.

11.4 In respect of tangible fixed asset covered by revaluation made in the earlier years, depreciation has been calculated on their respective revalued amounts. Depreciation on account of incremental amount to the extent of Rs. 13.68 lacs for the current year and Rs.2.5 7 lacs for the previous year has been transferred from Revaluation Reserve to General Reserve and the Statement of Profit and Loss respectively.

# In terms of the order passed by the Hon''ble High Court at Calcutta on 3rd March,2015 sanctioning the reduction of paid up share capital ofRs. 10/- per share to Re.0.15 per share, shareholding in Open Media Network Private Limited stand reduced and consolidated into 6,30,640 equity shares of Rs.10/- folly paidup .Further, the Company have purchased 1,77,960 equity shares of Rs.1 G each from Rainbow Investments Limited. Also refer Note 43(b).

@ Acquired during the year 2012-13 pursuant to clause 3.8 of the agreement entered into between Saregama India Limited and Timbre Media Private Limited.

* Investments made during the year includes 1,67,58,000 equity shares of Rs. 10/- each through conversion of receivables from the investee company on sale of company''s investment in shares for reason set out in Note 43(a).


Mar 31, 2014

(a) Basis of the Preparation of the Financial Statements

These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain Tangible Fixed Assets which are being carried at revalued amounts (as indicated in Notes 11.1,11.2,11.3 and 11.4). Pursuant to circular 15/2013 dated 13-09-2013 read with circular 08/2014 dated 04-04-2014, till the standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the companies Act, 1956 shall continue to apply. Consequently, these financial statements are prepared to comply in all material aspects, with the accounting standards notified under section 211(3C) [Companies (Accounting Standards) Rules 2006 as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of products / service and the time between the acquisition of assets for processing / providing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non- current classification of assets and liabilities.

(b) Use of Estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the balance sheet date, the reported amount of revenue and expenses for the period and disclosure of contingent liability as at the balance sheet date. The estimates and assumptions used in the financial statements are based upon managements'' evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from estimates.

(c) Fixed Assets

(i) Tangible Assets

Tangible Fixed Assets are stated at their original cost less depreciation other than revalued items which are stated at valuation less depreciation, as referred to in Notes 11.1,11.2,11.3 and 11.4.

Impairment loss is recognised wherever the carrying amount of tangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(ii) Intangible Assets

The cost incurred for producing / purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are recognised as intangible asset in the year of release at 50% of the cost of making the film including negatives or purchase cost.

Outright acquisition of music copyrights wherein future economic benefits are established are capitalised.

Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use.

Impairment loss is recognised wherever the carrying amount of intangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(d) Depreciation /Amortisation

Depreciation on original cost of tangible fixed assets is provided on straight line method at rates prescribed in Schedule XIV to the Companies Act, 1956 of India. Additional Depreciation on the amount added on revaluation is provided on straight line basis and is adjusted against the available balance in revaluation reserve account in respect of the related items.

Feature Films / Music Copyrights are amortised on a straight-line basis over a period of 1-10 years. The Company reviews the expected future revenue potential at the end of each accounting period and recognises impairment loss, where required.

Softwares are amortised on a straight line basis over a period of three years from the date of capitalisation.

(e) Investments

Long term investments are stated at cost / cost less write down. Provision for diminution is made to recognise a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review.

Current investments are carried at lower of cost and fair value.

(f) Inventories

Inventories are valued at lower of cost and net realisable value.

(i) Raw Materials and Finished Goods

The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete / slow moving / defective stocks, where necessary.

(ii) Films

Films under production are included under ''Work-in-Progress'' at cost or under.

The cost incurred for producing / purchasing feature film wherein future economic benefits are established to accrue over a short tern period are recognised as inventory and the cost is amortised over such period, based on net expected revenue. (iii) Television Serials

Television serials under production are included under ''Work-in-Progress'' at cost or under and charged off on the basis of telecast. Untelecasted television serials are stated at lower of cost and net expected revenue and included under ''Finished Goods''. (g) Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such contribution is recognised as expense and funded.

Liability towards gratuity (defined benefit), covering eligible employees, is provided on the basis of year-end actuarial valuation using Projected Unit Credit Method. Gratuity is funded.

Accrued liability-towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation using Projected Unit Credit Method is recognised as charge.

Contribution towards provident fund to Government administered provident fund is recognised as expense.

Actuarial gains / losses arising in Defined Benefit Plans are recognised immediately in the Statement of Profit and Loss as income / expense for the year in which they occur.

Termination benefits represent compensation towards Voluntary Retirement Scheme which is expensed on accrual of liability. (h) Sales and Licence Fees

Sales represent invoiced value of products sold (net of trade discount) and services rendered. Licence Fees represent income from music rights.

Revenue from films is recognised on assignment of distribution rights and revenue relating to television serials is recognised on the basis of telecast / sale of content, as applicable.

(i) Royalty

Minimum Guarantee Royalty is recognised as expense within the license period or ten years, whichever is earlier.

Royalty on sales, other than physical sales, is provided on the basis of management''s best estimate of the expenditure required to settle the obligation.

Other royalty payments are charged at agreed rates on related sales.

(j) Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and

liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates.The resultant exchange differences arising from settlement of foreign currency transaction and from year-end restatement are recognised in the Statement of Profi and Loss.

(k) Taxes on Income

Current tax is provided as the amount of tax payable in respect of taxable income for the year measured using the applicable tax rules and laws.

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a virtual / reasonable certainty, as applicable, in keeping with Accounting Standard 22 on ''Accounting for Taxes on Income'' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax in excess of MAT during the specified period. 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 in excess of MAT during the specified period. (1) Provisions and Contingent Liabilities

Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation as at the Balance Sheet date and are not discounted to its present value.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

2.1 Out of 53,38,628 equity shares issued for cash at a premium of Rs.35/- (issue price- Rs.45/-) pursuant to the Rights Issue in 2005, allotment of 5,290 (31.03.2013Rs. 5,290) equity shares (relating to cases under litigation/pending clearance from the concerned authorities) are kept in abeyance as on31stMarch,2014.

2.3 Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holder of equity shares are eligible to receive remaining assets of the Company, in proportion to their shareholding.

11.1 Based on valuation reports of valuers, appointed for the purpose, the tangible fixed assets (other than furniture and fittings, office equipment, vehicles and certain items of plant and equipment) were revalued on 31st March, 1984 and again (except for those relating to record making machinery items) on 30th September, 1987 after considering the then (a) current market value/ derived rates attributable to land (b) current replacement cost after depreciation etc. and an amount of Rs.587.31 lacs and Rs.628.19 lacs were added to the book value of the related assets (with corresponding credit to Fixed Asset Revaluation Reserve) on 31 st March, 1984 and 30th September, 1987 respectively.

11.2 Certain tangible fixed assets of the Company viz Land and Buildings were revalued in June 2003 by registered valuers at the lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs.2,374.11 lacs were added to the book value of the related assets with utilisation of the corresponding credit amount pursuant to an approved scheme of arrangement.

11.3 Company''s land was revalued on 31st March, 2007 by registered valuers, at lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs.4,421,30 lacs were added to the book value of land with corresponding credit to Revaluation Reserve of Rs.2,697.56 lacs and utilisation of the balance amount of Rs.1,723.74 lacs pursuant to a sanctioned scheme of amalgamation of erstwhile Saregama Films Limited with the Company in 2006-07.

11.4 In respect of tangible fixed asset covered by revaluation made in the earlier years,depreciation has been calculated on their respective amounts and includes additional charge of Rs.2.57 lacs (Previous year Rs. 3.05 lacs) which has been transferred from Revaluation Reserve.

26.1 In keeping with the Company''s gratuity scheme (a defined benefit plan-funded), eligible employees are entitled to gratuity benefit (at one half months eligible salary for each completed year of service) on retirement / death / incapacitation / resignation etc. Also refer Note 1 (g) for accounting policy relating to gratuity. Following are the further particulars with respect to gratuity.

30.1 The Company has made advances from time to time to support ongoing publication business activities of Open Media Network Private Limited (OMNPL) (Subsidiary company). Balance of such advances as on 27th March,2014 is Rs. 3203.26 Lacs [including Rs. 738.66 Lacs (net) given in 2013-14]. However, as a part of restructuring activities undertaken by OMNPL during the year, the said advances have been considered as contributions for investments in equity shares of OMNPL.Upon conversion of advances into Investments, the provision for doubtful advances has been written back and provision for diminution in value of investments has been created to recognise the decline, other than temporary, in the carrying amount of company''s long term investments in OMNPL''s Publication business.

As a part of restructuring activities as above, OMNPL has also allotted 2,96,64,000 equity shares ofRs. 10/- each to other companies in aggregrate during the year. Upon allotment of the said shares, OMNPL has ceased to be a wholly owned subsidiary of the Company.

31. Capital commitments (net of advances of Rs.11.18Lacs;31.03.13 Rs.14.72Lacs) as at 31st March, 2014 are estimated at Rs.14.181acs (31.03.13-Rs.22.53Lacs).


Mar 31, 2013

(a) Basis of the Preparation of the Financial Statements

These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain Tangible Fixed Assets which are being carried at revalued amounts (as indicated in Notes 11.1,11.2,11.3 and 11.4). These Financial Statements are prepared to comply in all material aspects, with the accounting standards notified under section 211(3C) [Companies (Accounting Standards) Rules 2006 as amended] and the other relevant provisions ofthe Companies Act, 1956.

All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the p urpose of current, non- current classification of assets and liabilities,

(b) FixedAssets

(i) Tangible Assets

Tangible Fixed Assets are stated at their original cost less depreciation other than revalued items which are stated at valuation less depreciation, as referred to in Notes 11.1,11.2,11.3 and 11.4.

Impairment loss is recognised wherever the carrying amount of tangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(ii) Intangible Assets

The cost incurred for producing/purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are recognised as intangible asset in the year of release at 50% of the cost of making the film including negatives or purchase cost.

Outright acquisition of music copyrights wherein future economic benefits are established are capitalised.

Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use.

Impairment loss is recognised wherever the carrying amount of intangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(c) Depreciation/Amortisation

Depreciation on original cost of tangible fixed assets is provided on straight line method at rates prescribed in Schedule XIV to the Companies Act, 1956 of India. Additional Depreciation on the amount added on revaluation is provided on straight line basis and is adjusted against the available balance in revaluation reserve account in respect of the related items.

Feature Films / music copyrights are amortised over a period of 1-10 years, based on license period or management estimation of future revenue potential, as the case may be. The Company reviews the expected future revenue potential at the end of each accounting period and recognises impairment loss, where required.

Softwares are amortised on a straight line basis over a period of three years from the date of capitalisation.

(d) Investments

Long term investments are stated at cost/ cost less write down. Provision for diminution is made to recognise a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review.

Current investments are carried at lower of cost and fair value.

(e) Inventories Inventories are valued at lower of cost and net realisable value.

(i) Raw Materials and Finished Goods

The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete/slow moving/defective stocks, where necessary.

(ii) Films

Films under production are included under'' Work-in-Progress'' at cost or under.

The Cost incurred for producing/purchasing feature film wherein future economic benefits are established to accrue over a short ter period are recognised as inventory and the cost is amortised over such period, based on net expected revenue.

(iii) Television Serials

Television serials under production are included under ''Work-in-Progress'' at cost or under and charged off on the basis of telecast. Untelecasted television serials are stated at lower of cost and net expected revenue and included under ''Finished Goods''.

(f) Employee Benefits

Shor t-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered Cont ribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for sue contri bution is recognised as expense and funded.

Liability towards gratuity (defined benefit), covering eligible employees, is provided on the basis of year-end actuarial valuation usin Projected Unit Credit Method. Gratuity is funded.

Acc rued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-en actu arial valuation using Projected Unit Credit Method is recognised as charge.

Contribution towards provident fund to Government administered provident fund is recognised as expense.

Actuarial gains/losses arising in Defined Benefit Plans are recognised immediately in the Statement of Profit and Loss as income/expens for the year in which they occur.

Term ination benefits represent compensation towards Voluntary Retirement Scheme which is expensed on accrual of liability.

(g) Sales and Licence Fees

Sales represent invoiced value of products sold (net of trade discount) and services rendered. Licence Fees represent income from musi rights.

Revenue from films is recognised on assignment of distribution rights and revenue relating to television serials is recognised on the basis o telecast/Sale ofContent, as applicable.

(h) Royalty

Minimum Guarantee Royalty is recognised as expense within the license period or ten years, whichever is earlier.

Royalty on sales, other than physical sales, is provided on the basis of management''s best estimate of the expenditure required to settle th< obligation.

Other royalty payments are charged at agreed rates on related sales.

(i) Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets anc liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates. The resultant exchange differences arising from settlement of foreign currency transaction and from year-end restatement are recognised in the Statement of Profi and Loss.

(j) Taxes on Income

Current tax is pro vided as the amount of tax payable in respect of taxable income for the year measured using the applicable tax rules and laws.

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a virtual/reasonable certainty, as applicable, in keeping with Accounting Standard 22 on ''Accounting for Taxes on Income'' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appr opriateness of their respective carrying amount at each Balance Sheet date.


Mar 31, 2012

(a) Basis of the Preparation of the Financial Statements

These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain Tangible Fixed Assets which are being carried at revalued amounts (as indicated in Notes 11.1,11.2,11.3 and 11.4). These Financial Statements are prepared to comply in all material aspects with the accounting standards notified under section 211(3C) [Companies (Accounting Standards) Rules 2006 as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule VI to the Companies Act,1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non-current classification of assets and liabilities.

(b) Fixed Assets

(i) Tangible Assets

Tangible Fixed Assets are stated at their original cost less depreciation other than revalued items which are stated at valuation less depreciation, as referred to in Notes 11.1,11.2,11.3 and 11.4.

Impairment loss is recognized wherever the carrying amount of tangible fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).

(ii) Intangible Assets

The cost incurred for producing/purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are recognized as intangible asset in the year of release at 50% of the cost of making the film including negatives or purchase cost.

Outright acquisition of music copyrights wherein future economic benefits are established are capitalized.

Software's are capitalized where it is expected to provide future enduring economic benefits. Capitalization costs includes license fees and cost of implementation/system integration services. The costs are capitalized in the year in which the relevant software is implemented for use.

(c) Depreciation/Amortization

Depreciation on original cost of tangible fixed assets is provided on straight line method at rates prescribed in Schedule XIV to the Companies Act, 1956 of India. Additional Depreciation on the amount added on revaluation is provided on straight line basis and is adjusted against the available balance in revaluation reserve account in respect of the related items.

Feature Films / music copyrights are amortized over a period of 1-10 years, based on license period or management estimation of future revenue potential, as the case may be. The company reviews the expected future revenue potential at the end of each accounting period and recognizes impairment loss, where required.

Soft wares are amortized on a straight line basis over a period of three years from the date of capitalization.

(d) Investments

Long term investments are stated at cost/ cost less write down. Provision for diminution is made to recognize a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review.

- Current investments are carried at lower of cost and fair value.

(e) Inventories

Inventoriesarevaluedatlowerofcostandnetrealisablevalue.

(i) Raw Materials, Stores & Spares and Finished Goods

The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete/slow moving/defective stocks, where necessary.

(ii) Films

Films under production are included under' Work-in-Progress' at cost or under. .

The Cost incurred for producing/purchasing feature film wherein future economic benefits are established to accrue over a short term period of 1 - 2 years are recognized as inventory and the cost is amortized over a period of 1 - 2 years, based on net expected revenue.

(iii) Television Serials

Television serials under production are included under 'Work-in-Progress' at cost or under and charged off on the basis of telecast. Unreleased television serials are stated at lower of cost and net expected revenue under 'Finished Goods'

(f) Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such contribution is recognized as expense and funded.

Liability towards gratuity (defined benefit), covering eligible employees, is provided on the basis of year-end actuarial valuation using Projected Unit Credit Method. Gratuity is funded.

Accrued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation using Projected Unit Credit Method is recognized as charge.

Contribution towards provident fund to Government administered provident fund is recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

(g) Sales and License Fees

Sales represent invoiced value of products sold (net of trade discount) and services rendered. License Fees represent income from music rights.

Revenue from films is recognized on assignment of distribution rights and revenue relating to television serials is recognized on the basis of telecast/Sale of Content, as applicable.

(h) Royalty

Minimum Guarantee Royalty is recognized as expense within the license period or ten years, whichever is earlier.

Royalty on sales, other than physical sales, is provided on the basis of management's best estimate of the expenditure required to settle the obligation.

Other royalty payments are charged at agreed rates on related sales.

(i) Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates. The resultant exchange differences arising from settlement of foreign currency transaction and from year-end restatement are recognized in the Statement of Profit and Loss.

(j) Taxes on Income

Current tax is provided as the amount of tax payable in respect of taxable income for the year measured using the applicable tax rules and laws.

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognized only if there is a virtual/reasonable certainty, as applicable, in keeping with Accounting Standard 22 on Accounting for Taxes on Income' that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date.


Mar 31, 2011

(a) Basis of the Preparation of the Financial Statements

The Financial Statements have been prepared under the Historical Cost Convention (except for revaluation of certain Fixed Assets as detailed below and in Notes 5(a), 5(b) and 5(c) on Schedule XX) in accordance with the accounting principles generally accepted in India and the applicable Accounting Standards in India. The Financial Statements have also been prepared in accordance with relevant presentational requirements of the Companies Act, 1956 of India. A summary of important accounting policies, which have been applied, is set out below.

(b) Fixed Assets

(i) Tangible Assets

Fixed Assets are stated at their original cost less depreciation other than revalued items which are stated at valuation less depreciation, as referred to in Notes 5(a), 5(b), 5(c) and 5(d ) on Schedule XX.

Impairment loss is recognised wherever the carrying amount of fixed assets of a cash generating unit exceeds its recoverable amount i.e. net selling price or value in use, whichever is higher.

(ii) Intangible Assets

The cost incurred for producing and purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are treated as intangible asset in the year of release 50% of the cost of making the film including negatives or purchase cost.

Outright acquisition of music copyrights wherein future economic benefits are established are capitalised.

Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use.

(c) Depreciation / Amortisation

Depreciation on original cost of tangible fixed assets is provided on straight line method at rates prescribed in Schedule XIV to the Companies Act, 1956 of India. Additional depreciation on the amount added on revaluation is provided on straight line basis and is adjusted against the available balance in revaluation reserve account in respect of the related items.

Feature Films/music copyrights are amortised over a period of 1-10 years based on license period or management estimation of future revenue potential as the case may be. The Company reviews the expected future revenue potential at the end of each accounting period and recognised impairment loss, where required.

Softwares are amortised on a straight line basis over a period of three years from the date of capitalisation.

(d) Investments

Long term investments are stated at cost/ cost less write down. Provision for diminution is made to recognise a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review.

Current investments are carried at lower of cost and fair value.

(e) Inventories (i) Raw Materials, Stores & Spares and Finished Goods Inventories are valued at lower of cost and net realisable value.

The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete, slow moving and defective stocks, where necessary.

(ii) Films

Films under production are included under Work-in-Progress at cost or under.

The cost incurred for producing and purchasing feature film wherein future economic benefits are established to accrue over a short term period of 1 - 2 years are recognised as inventory and the cost is amortised over a period of 1 - 2 years, based on net expected revenue.

Significant Accounting Policies (Contd.)

(iii) Television Serials

Television serials under production are included under Work-in-Progress at cost or under and charged off on the basis of telecast. Untelecasted television serials are stated at lower of cost and net expected revenue under Finished Goods.

(f) Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered. Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such contribution is recognised as expense and funded.

Contribution towards provident fund to Government administered provident fund is recognised as expense.

Liability towards gratuity (defined benefit), covering eligible employees, is provided and funded on the basis of year-end actuarial valuation.

Accrued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognised as charge.

Contribution to Government administered Employees State Insurance Scheme for eligible employees is recognised as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognised immediately in the Profit and Loss Account as income/expense for the year in which they occur.

(g) Sales and Licence Fees

Sales represent invoiced value of products sold (net of trade discounts) and services rendered. Licence Fees represent income from music rights.

Revenue from films is recognised on assignment of distribution rights and revenue relating to television serials is recognised on the basis telecast.

(h) Royalty

Minimum guarantee royalty is recognised as expense within the license period or ten years, whichever is earlier.

Royalty on sales, other than physical sales, is provided on the basis of managements best estimate of the expenditure required to settle the obligation.

Other royalty payments are charged at agreed rates on related sales.

(i) Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates. Gains / losses arising out of fluctuations in the exchange rates are recognised in Profit and Loss Account in the period in which they arise.

(j) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rate and laws.

Deferred tax is provided/recognised on timing differences between taxable income and accounting income subject to consideration of prudence. Deferred tax asset on the unabsorbed depreciation and carry forward of losses under the tax laws are not recognised unless there is virtual certainty that there will be sufficient future taxable income available to realise such assets.


Mar 31, 2010

(a) Basis of the Preparation of the Financial Statements

The Financial Statements have been prepared under the Historical Cost Convention (except for revaluation of certain Fixed Assets as detailed below and in Notes 6(a), 6(b) and 6(c) on Schedule XX) in accordance with the accounting principles generally accepted in India and the applicable Accounting Standards in India. The Financial Statements have also been prepared in accordance with relevant presentational requirements of the Companies Act, 1956 of India. A summary of important accounting policies, which have been applied, is set out below.

(b) Fixed Assets

Fixed Assets are stated at their original cost less depreciation other than revalued items which are stated at valuation less depreciation, as referred to in Notes 6 (a), 6 (b), 6 (c) and 6 (d ) on Schedule XX.

Outright acquisition of copyrights wherein future economic benefits are established are capitalised.

Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use.

Impairment loss is recognised wherever the carrying amount of fixed assets of a cash generating unit exceeds its recoverable amount i.e. net selling price or value in use, whichever is higher.

(c) Depreciation

Copyrights (outright acquisition) are depreciated under the straight line method over 10 years.

Softwares capitalised are amortised on a straight line basis over a period of three years from the date of capitalisation.

Depreciation on original cost of fixed assets is provided on straight line method at the rates prescribed in Schedule XIV to the Companies Act, 1956 of India. Additional Depreciation on the amount added on revaluation is provided on straight line basis and is adjusted against the available balance in revaluation reserve account in respect of the related items.

(d) Investments

Long term investments are stated at cost/ cost less write down. Provision for diminution is made to recognise a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review. Current investments are carried at lower of cost and fair value.

(e) Inventories

Inventories are valued at lower of cost and net realisable value.

The cost is determined on specific identification/weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads.

Provision is made for obsolete, slow moving and defective stocks, where necessary.

(f) Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered.

Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such contribution is recognised as expense and funded.

Contribution towards provident fund to Government administered provident fund is recognised as expense.

Liability towards gratuity (defined benefit), covering eligible employees, is provided and funded on the basis of year-end actuarial valuation.

Accrued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognised as charge.

Contribution to Government administered Employees State Insurance Scheme for eligible employees is recognised as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognised immediately in the Profit and Loss Account as income/expense for the year in which they occur.

(g) Sales and Licence Fees

Sales represent invoiced value of products sold and are net of trade discounts. Licence Fees represent income from music rights.

Revenue from films is recognised on assignment of distribution rights and revenue relating to television serials is recognised on telecast.

(h) Royalty

Minimum guarantee advance is recognised as expense within the license period or ten years, whichever is lower.

Royalty on sales, other than physical sales, is provided on the basis of managements best estimate of the expenditure required to settle the obligation.

Other royalty payments are charged at agreed rates on related sales.

(i) Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates. Gains / losses arising out of fluctuations in the exchange rates are recognised in Profit and Loss Account in the period in which they arise.

(j) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rate and laws.

Deferred tax is provided/recognised on timing differences between taxable income and accounting income using the liability method subject to consideration of prudence. Deferred tax asset on the unabsorbed depreciation and carry forward of losses under the tax laws are not recognised unless there is virtual certainty that there will be sufficient future taxable income available to realise such assets.

 
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