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Accounting Policies of Sowbhagya Media Ltd. Company

Mar 31, 2015

A. Basis of preparation of financial statements

These financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India under historical cost convention on the accrual basis. GAAP comprises accounting standards as prescribed under section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hereto in use.

B. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

C. Fixed Assets

a) Fixed assets are stated at original cost of acquisition/installation net of accumulated depreciation, amortization and impairment loss if any. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) Capital Work-in-progress is stated at amount expended up to the date of the Balance Sheet.

D. Depreciation/Amortization:

Depreciation on fixed assets is provided on Straight-Line Method over the useful life of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013.

Depreciation on assets purchased/sold during the year is proportionately charged. Individual assets costing '5000 or less are depreciated within a year of acquisition.

E. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period in which they are incurred.

F. Impairment of Assets

Impairment of an asset is reviewed and recognized in the events of changes and circumstances indicate that the carrying amount of an asset is not recoverable. Difference between the carrying amount of an asset and the recoverable value is recognized as impairment loss in the statement of profit and loss in the year of impairment.

G. Employee Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

H. Revenue Recognition:

a) Broadcasting Revenues:

Advertisement revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (Program/Film Rights) are recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch of goods.

c) Income from services is recognized proportionately over the period of service.

I. Taxes on Income:

Current Tax

Current tax is determined as the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax

Deferred income taxes (AS 22 on Accounting for taxes on income) are recognized for the future tax consequences attributable to timing differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. The effect on deferred tax and liabilities of change in tax rates will be recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) Credit entitlement

MAT credit entitlement represents the amounts paid in a year under Section 115JA/ 115JB of the Income Tax Act 1961 ('IT Act') which is in excess of the tax payable, computed on the basis of normal provisions of the IT Act.

Such excess amount can be carried forward for set off in future periods in accordance with the relevant provisions of the IT Act. Since such credit represents a resource controlled by the Company as a result of past events and there is evidence as at the reporting date that the Company will pay normal income tax during the specified period, when such credit would be adjusted, the same has been disclosed as "MAT Credit entitlement", in the balance sheet with a corresponding credit to the profit and loss account, as a separate line item.

Such assets are reviewed at each balance sheet date and written down to reflect the amount that will not be available as a credit to be set off in future, based on the applicable taxation law then in force.

J. Earnings Per Share (EPS)

In determining EPS, the Company considers the net profit / (loss) after tax attributable to Equity Share holders. Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number and dilutive equivalent equity shares outstanding during the year, except when the results would be anti dilutive.

K. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

A. Basis of preparation of financial statements

These financial statements are prepared under the historical cost convention, in accordance with Generally Accepted Accounting Principles (GAAP) in India on accrual basis. GAAP comprises accounting standards as specified in rule 3 of the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956 to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hereto in use.

B. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

C. Fixed Assets

a) Fixed assets are stated at original cost of acquisition/installation net of accumulated depreciation, amortization and impairment loss if any. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) Capital Work-in-progress is stated at amount expended up to the date of the Balance Sheet.

D. Depreciation/Amortization:

Depreciation on fixed assets is provided on Straight-Line Method at the rate specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets purchased/sold during the year is proportionately charged. Individual assets costing Rs.5000 or less are depreciated within a year of acquisition.

E. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period in which they are incurred.

F. Impairment of Assets

Impairment of an asset is reviewed and recognized in the events of changes and circumstances indicate that the carrying amount of an asset is not recoverable. Difference between the carrying amount of an asset and the recoverable value is recognized as impairment loss in the statement of profit and loss in the year of impairment.

G. Employee Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

H. Revenue Recognition:

a) Broadcasting Revenues:

Advertisement revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (Program/Film Rights) are recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch of goods.

b) Income from services is recognized proportionately over the period of service.

I. Taxes on Income: Current Tax

Current tax is determined as the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax

Deferred income taxes (AS 22 on Accounting for taxes on income) are recognized for the future tax consequences attributable to timing differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. The effect on deferred tax and liabilities of change in tax rates will be recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) Credit entitlement

MAT credit entitlement represents the amounts paid in a year under Section 115JA/ 115JB of the Income Tax Act 1961 (''IT Act'') which is in excess of the tax payable, computed on the basis of normal provisions of the IT Act.

Such excess amount can be carried forward for set off in future periods in accordance with the relevant provisions of the IT Act. Since such credit represents a resource controlled by the Company as a result of past events and there is evidence as at the reporting date that the Company will pay normal income tax during the specified period, when such credit would be adjusted, the same has been disclosed as "MAT Credit entitlement", in the balance sheet with a corresponding credit to the profit and loss account, as a separate line item.

Such assets are reviewed at each balance sheet date and written down to reflect the amount that will not be available as a credit to be set off in future, based on the applicable taxation law then in force.

J. Earnings Per Share (EPS)

In determining EPS, the Company considers the net profit / (loss) after tax attributable to Equity Share holders. Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number and dilutive equivalent equity shares outstanding during the year, except when the results would be anti dilutive.

K. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

(i) Section 205 of the Companies Act, 1956 mandates that companies transfer dividend that has been unclaimed for a period of seven years from unpaid dividend account to the Investor Education and Protection Fund (IEPF). Accordingly, if dividend is unclaimed for a period of seven years, it will be transferred to IEPF.

Note

Program/film rights etc. for broadcasting are intangible assets as defined in AS – 26 but considered and shown under current assets as are used for broadcasting in the ordinary course of business.


Mar 31, 2013

A. Basis of preparation of financial statements

These financial statements are prepared under the historical cost convention, in accordance with Generally Accepted Accounting Principles (GAAP) in India on accrual basis. GAAP comprises accounting standards as specified in rule 3 of the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956 to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hereto in use.

B. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

C. Fixed Assets

a) Fixed assets are stated at original cost of acquisition/installation net of accumulated depreciation, amortization and impairment loss if any. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) Capital Work-in-progress is stated at amount expended up to the date of the Balance Sheet.

D. Depreciation/Amortization:

Depreciation on fixed assets is provided on Straight-Line Method at the rate specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets purchased/sold during the year is proportionately charged. Individual assets costing ~5000 or less are depreciated within a year of acquisition.

E. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period in which they are incurred.

F. Impairment of Assets

Impairment of an asset is viewed and recognized in the events of changes and circumstances indicate that the carrying amount of an asset is not recoverable. Difference between the carrying amount of an asset and the recoverable value is recognized as impairment loss in the statement of profit and loss in the year of impairment.

G. Employee Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

H. Revenue Recognition:

a) Broadcasting Revenues:

Advertisement revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (Program/Film Rights) are recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch of goods.

b) Income from services is recognized proportionately over the period of service.

I. Taxes on Income:

Current Tax

Current tax is determined as the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax

Deferred income taxes (AS 22 on Accounting for taxes on income) are recognized for the future tax consequences attributable to timing differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. The effect on deferred tax and liabilities of change in tax rates will be recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) Credit entitlement

MAT credit entitlement represents the amounts paid in a year under Section 115JA/ 115JB of the Income Tax Act 1961 (''IT Act'') which is in excess of the tax payable, computed on the basis of normal provisions of the IT Act.

Such excess amount can be carried forward for set off in future periods in accordance with the relevant provisions of the IT Act. Since such credit represents a resource controlled by the Company as a result of past events and there is evidence as at the reporting date that the Company will pay normal income tax during the specified period, when such credit would be adjusted, the same has been disclosed as "MAT Credit entitlement", in the balance sheet with a corresponding credit to the profit and loss account, as a separate line item.

Such assets are reviewed at each balance sheet date and written down to reflect the amount that will not be available as a credit to be set off in future, based on the applicable taxation law then in force.

J. Earnings Per Share (EPS)

In determining EPS, the Company considers the net profit / (loss) after tax attributable to Equity Share holders. Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number and dilutive equivalent equity shares outstanding during the year, except when the results would be anti dilutive.

K. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

1.1. Basis of preparation of financial statements

These financial statements are prepared under the historical cost convention, in accordance with Generally Accepted Accounting Principles (GAAP) in India on accrual basis. GAAP comprises accounting standards as specified in rule 3 of the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956 to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hereto in use.

1.2. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

1.3. Fixed Assets

Fixed assets are stated at original cost of acquisition/installation net of accumulated depreciation, amortization and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

1.4. Depreciation/Amortization:

Depreciation on fixed assets is provided on Straight-Line Method at the rate specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets purchased/sold during the period is proportionately charged. Individual assets costingRs.5000 or less are depreciated within a year of acquisition.

1.5. Employee Benefits:

a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

1.6. Revenue Recognition:

a) Broadcasting Revenues: Advertisement revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (Program/Film Rights) are recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch of goods.

c) Income from services is recognized proportionately overthe period of service.

1.7. Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the year underthe Income Tax Act, 1961.

Deferred tax is recognized, subject to consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates.

1.8. Earnings PerShare

In determining earnings per share, the Company considers the net profit after tax,. Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted earnings pershare is computed and disclosed using the weighted average number of common and dilutive

common equivalent shares outstanding during the year, except when the results would be anti dilutive.( as per A.S -20 Appendix-III adjusted EPS to be calculated for the previous year.)

1.9. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will bean outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

The accumulated deferred tax Asset as on March 31,2012 has been recognized with a corresponding charge to the Profit and Loss account. The accumulated Deferred Tax liability on Written down value of assets as of March 31,2012 is Rs. 40,70,961/-


Mar 31, 2011

1. Basis of Accounting:

The Financial Statements have been prepared under the Historical Cost Convention and on accrual basis in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

2. Use of Estimates:

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

3. Fixed Assets:

a) Fixed assets are stated at original cost of acquisition/installation net of accumulated depreciation, amortization and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

4. Depreciation/Amortization:

Depreciation on fixed assets is provided on Straight-Line Method at the rate specified in Schedule XIV of the Companies Act, 1956.

5. Retirement Benefits:

a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

6. Revenue Recognition:

a) Broadcasting Revenues: Advertisement revenue (net of agency commission) is recognised when the related advertisement or commercial appears before the public i.e. on telecast. Subscription revenue is recognized on completion of service.

b) Sales (Program/Film Rights) are recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch of goods.

c) Income from services is recognized proportionately over the period of service.

7. Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax is recognized, subject to consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates.

8. Earnings Per Share:

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti dilutive.

9. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

 
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