Accounting Policies of Filmcity Media Ltd. Company

Mar 31, 2014

FIXED ASSETS

Fixed Assets are stated at cost of acquisition, inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

DEPRECIATION

Depreciation is calculated on Fixed Assets on straight line method in accordance with schedule XIV of the Companies Act, 1956.

INVENTORIES

Stock is Valued at cost. The closing stock of film produced is valued at Actual Cost by allocating all direct expenses which are related to the production. The fixed expenses under which the allocation was necessary as per the management discretion is allocated to the respective projection to arrive at its Actual cost of production

The Work - in - Progress is valued accordingly as per the completion of the projection. All expenses which can be related directly are all Capitalized and added to the cost.

INVESTMENTS

Investments are valued at cost, any diminution in the value of investments, if considered permanent, is provided for.

INCOME FROM INVESTMENTS / DEPOSITS

Income from investments / Deposits is credited to revenue in the year in which it accrues expect Dividend which is accounted for on Cash basis.

RECOGNITION OF INCOME & EXPENDITURE

All income and expenditure are accounted for on accrual basis.

RETIREMENT BENEFITS

Provision for Payment of Gratuity Act, 1972 is not applicable and as such no provision is made. Leave Encashment, if any, would be accounted for as and when paid.

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Mar 31, 2013

FIXED ASSETS

Fixed Assets are stated at cost of acquisition, inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

DEPRECIATION

Depreciation is calculated on Fixed Assets on straight line method in accordance with schedule XIV of the Companies Act, 1956.

INVENTORIES

Stock is Valued at cost. The closing stock of film produced is valued at Actual Cost by allocating all direct expenses which are related to the production. The fixed expenses under which the allocation was necessary as per the management discretion is allocated to the respective projection to arrive at its Actual cost of production

The Work - in - Progress is valued accordingly as per the completion of the projection. All expanses which can be related directly are all Capitalised and added to the cost.

INVESTMENTS

Investments are valued at cost, any diminution in the value of investments, if considered permanent, is provided for.

INCOME FROM INVESTMENTS / DEPOSITS

Income from investments / Deposits is credited to revenue in the year in which it accrues expect Dividend which is accounted for on Cash basis.

RECOGNITION OF INCOME & EXPENDITURE

All income and expenditure are accounted for on accrual basis.

RETIRMENTSENEFITS

Provision for Payment of Gratuity Act, 1972 is not applicable and as such no provision is made-Leave Encashment, if any, would be accounted for as and when paid.

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Mar 31, 2012

1. System of accounting

a) The accounts are prepared under the historical cost convention in accordance with generally ac- cepted accounting principles and the provisions of the companies Act, 1956 are adopted consis- tently by the company.

b) The company generally follows the mercantile system of Accounting and recognises income and expenditure on accruel basis.

2 Use of Estimates

The preparation of financial statements in conformity w ith generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for the year.Actual result could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

3 Fixed Assets & Depreciation

a) Fixed Assets have been stated at cost less depreciation.

b) Depreciation on Fixed Assets have been charged on straight line method at rates prescribed in Schedule XIV of the Companies Act. 1956 and in the manner so provided.

4 Impairment Of Assets

In accordance with AS 28 on impairment of Assets' issued by the Institute of Chartered Accountants of India .where there is an indication of impairment of the Companys's assets related to cash generating units .the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is recognized whenever the carrying amounts of such assets exceeds its recoverable amount.and impairment loss is recognized in the profit and loss account.

5 Sales

The Company has accounted gross sales and there is no change.

6 Inventories

a) Stock has been valued at Lower of Net Realizable Value and Cost.

b) Inventory taken as valued and certified by the management.During the year management has revalued the stock Significantly resulting in losses in Profit & Loss Account and Special resolution in EGM held on 27/03/2012 has been passed to adjust these accumulated losses in Profit & Loss Account, through reduction in capital and High Court has also sanctioned the scheme of capital reduction by their order dated 27/07/2012.

c) Nature of business of the company is such that quantitywise details is not possible but Valuewise details are given in above.

7 Employee benefits

Directors remuneration Rs. 150000/- is within the limit specified in Schedule XIII of the Companies Act. 1956.

Gratuity

No provision made for Gratuity during the year.

8 Miscellaneous Expenditure

a) Preliminery and Public issue expenses have been amortised over a period oflO years.

b) Channel License fees will be Amortized over a period of 10 years.

c) Pre operative Expenses of Rs.833568/-have been written off and shown in the Profit & Loss A/c under exceptional item.

9 Income Tax

No provision for income tax is made during the year due to losses. Deferred tax Assets is not recognised due to uncertainty of future profits, as per Accounting Standard-22 .

10 SCHEME OF AMALGAMATION (of FilmCity Communication Technologies Limited (FCTL) with the Company [scheme])

i Pursuant to the Shareholders approval at the meeting held on 12/02/2009 which was convened as per the Orders of the Hon'ble High Court of Judicature at Bombay (Court) and its Order in Com- pany Petition Nos 150 on 16/02/2009 sanctioning the Scheme, the assets and liabilities of FCTL whose principal business was Production /Trading of TV Softwares were transferred to and vested in the company with effect from the appointed date 31 07/2008 in accordance with the Scheme so sanctioned. The Scheme has. accordingly, been given effect to in the Accounts.

ii The amalgamation has been accounted for under the Pooling of Interest Method of Accounting as prescribed by Accounting Standard 14 (AS-14) book issued by the Institute of Chartered Accoun- tants of India. The assets and liabilities of the erstwhile FCTL as at 31/07/2008 have been taken over at their book values.

iii Pursuant to the Scheme as approved by the Hon'ble High Court of Judicature at Bombay, referred to in (a) above, the company has allotted necessary 200.000,000.Equity shares of Rs 1 /- each fully paid to the shareholders of the erstwhile FCTL on 16/05/2009 after the receipt of sanction order from the Court.

iv The difference between the value of the net assets acquired on amalgamation and the amount of shares issued to the shareholders of the amalgamation and the amount of shares issued to the share- holders of the amalgamating company FCTL resulting in excess shares issued Rs 120.000.000/- crores which has been accounted for as follows (AS-14.)

11 REDUCTION OF CAPITAL OF THE COMPANY

i Pursuant to the shareholder's approval at the meeting held on 27/03/2012 and approval of the hon'ble High Court at Bombay by it's order dated 27th July 2012,sanctioning the schetne.the accu- mulated losses of Rs.24.73.46,940 - in the Profit & Loss account adjusted against the share capital of the company by reduction of share capital of the company.The scheme has accordingly been given effect to in the accounts.

ii Pursuant to the scheme as approved by the Hon'ble High Court ofjudicature at Bombay, The company has reduced it's paid up capital by Rs.24,73,46,940/- i.e. from Rs.27.79.17.909 - to Rs.3.05,70,969 - and simultaneously the company has reduced it's accumulated losses by Rs.24.73,46,940/-

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Mar 31, 2011

1. System of accounting:

a) The accounts are prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the companies Act, 1956 are adopted consistently by the company.

b) The company generally follows the mercantile system of Accounting and recognises income and expenditure on accruel basis.

2. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for the year.Actual result could differ from these estimates.Any revision to accounting estimates is recognized prospectively in current and future periods.

3. Fixed Assets & Depreciation:

a) Fixed Assets have been stated at cost less depreciation.

b) Depreciation on Fixed Assets have been charged on straight line method at rates prescribed in Schedule XIV of the Companies Act, 1956 and in the manner so provided.

4. Impairment of Assets:

In accordance with AS 28 on 'Impairment of Assets' issued by the Institute of Chartered Accountants of India, where there is an indication of impairment of the Companys's assets related to cash generating units ,the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is recognized whenever the carrying amounts of such assets exceeds its recoverable amount,and impairment loss is recognized in the profit and loss account.

5. Sales:

The Company has accounted gross sales and there is no change.

6. Inventories:

a) Stock has been valued at Lower of Net Realizable Value and Cost.

b) The cost of manufacturing of the T.V. Software has been accounted as work in progress, as these software will generate sales (receipts) during the subsequent years.

7. Gratuity:

No provision made for Gratuity during the year.

8. Miscellaneous Expenditure:

a) Preliminery and Public issue expenses have been amortised over a period of 10 years.

b) Channel License fees will be Amortized over a period of 10 years.

9. Directors remuneration is within the limit specified in Schedule XIII of the Companies Act, 1956.

10. Income Tax:

No provision for income tax is made during the year due to losses. Deferred tax Assets is not recognised due to uncertainty of future profits, as per Accounting Standard-22 .

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Mar 31, 2010

1 System of accounting :

a) The accounts are prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the companies Act, 1956 are adopted consistently by the company.

b) The company generally follows the mercantile system of Accounting and recognises income and expenditure on accrual basis.

2 Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for the year. Actual result could differ from these estimates Any revision to accounting estimates is recognized prospectively in current and future periods.

3 Fixed Assets & Depreciation :

a) Fixed Assets have been stated at cost less depreciation.

b) Depreciation on Fixed Assets have been charged on straight line method at rates prescribed in Schedule XIV of the Companies Act, 1956 and in the manner so provided.

4 Impairment Of Assets :

In accordance with AS 28 on ‘Impairment of Assets issued by the Institute of Chartered Accountants of India ,where there is an indication of impairment of the Companys assets related to cash generating units ,the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is recognized whenever the carrying amounts of such assets exceeds its recoverable amount, and impairment loss is recognized in the profit and loss account.

5 Sales :

The Company has accounted gross sales and there is no change.

6 Inventories :

a) Stock has been valued at Lower of Net Realizable Value and Cost.

b) The cost of manufacturing of the T.V. Software has been accounted as work in progress, as these software will generate sales (receipts) during the subsequent years.

7 Gratuity :

No provision made for Gratuity during the year.

8 Miscellaneous Expenditure :

a) Preliminary and Public issue expenses have been amortized over a period of 10 years.

b) Channel License fees will be amortized over a period of 10 years.

9 Directors remuneration is within the limit specified in Schedule XIII of the Companies Act, 1956.

10 Income Tax :

No provision for income tax is made during the year due to b/f losses. Deferred tax provision has been made amounting to Rs. 23,19,848/- as per Accounting Standard-22.

SCHEME OF AMALGAMATION (of Filmcity Communication Technologies Limited (FCTL) with the Company [scheme])

11 Pursuant to the Shareholders approval at the meeting held on 12/02/2009 which was convened as per the Orders of the Honble High Court of Judicature at Bombay (Court) and its Order in Company Petition Nos 150 on 16/02/2009 sanctioning the Scheme, the assets and liabilities of FCTL whose principal business was Production /Trading of TV Softwares were transferred to and vested in the company with effect from the appointed date 31/07/2008 in accordance with the Scheme so sanctioned. The Scheme has, accordingly, been given effect to in the Accounts.

12 The amalgamation has been accounted for under the Pooling of Interest Method of Accounting as prescribed by Accounting Standard 14 (AS-14) book issued by the Institute of Chartered Accountants of India. The assets and liabilities of the erstwhile FCTL as at 31/07/2008 have been taken over at their book values.

13 Pursuant to the Scheme as approved by the Honble High Court of Judicature at Bombay, referred to in (a) above, the company has allotted necessary 200,000,000.Equity shares of Rs1/- each fully paid to the shareholders of the erstwhile FCTL on 16/05/2009 after the receipt of sanction order from the Court.

15 Contingent liabilities not provided for - NIL