Mar 31, 2014
1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
The Revised Schedule VI has become effective from 1st April, 2011 for
the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year''s figures have been regrouped / reclassified
wherever necessary to correspond with the current year''s classification
/ disclosure.
2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
3 Inventories
(i) Inventories of under production films/Animations and other contents
are valued at actual amount spent which includes amount paid, bills
settled and advance paid for which bills are awaited. The residual
values of all the films are valued at NIL as total cost of production
is charged to revenue at the time of first release of such films. Other
inventories are stated at cost.
(ii) Acquired rights pertaining to movies, animations and other
contents are amortized on the exploitation of such rights based on the
management estimates of revenue potential.
4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
5 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
6 Depreciation and amortisation
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 except in
respect of the following categories of assets, in whose case higher
rates of depreciation has been applied
Name of Fixed Assets Higher Rate
Studio Equipment 40%
Computers 40%
7 Revenue recognition
(i) Revenues from Licensing / public sale of movies are recognized in
accordance with the licensing agreement or on physical delivery of the
movies, whichever is later.
(ii) Recoveries of old films are recognized as and when royalties
earned.
(iii) In respect of services, the company accounts for the revenue are
on the basis of completed contract method.
(iv) Interest income is accounted on accrual basis.
(v) Dividend is recognized when the right to receive the dividend is
unconditionally established at the balance sheet date.
8 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
9 Tangible fixed assets
Fixed assets, are carried at cost less accumulated depreciation,
Service Tax/VAT Credit availed and impairment losses, if any. The cost
of fixed assets includes interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is
ready for its intended use and other incidental expenses incurred up to
that date. Exchange differences arising on restatement / settlement of
long-term foreign currency borrowings relating to acquisition of
depreciable fixed assets are adjusted to the cost of the respective
assets and depreciated over the remaining useful life of such assets.
Machinery spares which can be used only in connection with an item of
fixed asset and whose use is expected to be irregular are capitalised
and depreciated over the useful life of the principal item of the
relevant assets. Subsequent expenditure relating to fixed assets is
capitalised only if such expenditure results in an increase in the
future benefits from such asset beyond its previously assessed standard
of performance.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
10 Intangible assets
Intangible Assets are recorded at cost of acquisition.
11 Investments
(i) Long term : Long term investments shown in the balance sheet are
valued at cost unless there is a permanent diminution in the value, in
such case are valued at the diminished value and the difference is
charged to profit and loss account.
(ii) Disposal of Investments: On disposal of an investment, the
difference between the carrying amount and net disposal proceed is
being charged to profit and loss account determined on the basis of
First in First out (FIFO) Method."
12 Leave Encashment
Leave Encashment expenses are being accounted for as and when the
employee encash.
13 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
14 Segment reporting
The entire operation of the Company relates to only one segment viz.
Software and Entertainment. As such, there is no separate reportable
segment under Accounting Standards- AS 17 on Segment Reporting.
15 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
16 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
17 Provision and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2013
1. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
The Revised Schedule VI has become effective from 1 April, 2011 for the
preparation of financial statements. This has significantly impacted
the disclosure and presentation made in the financial statements.
Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
2. Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
3. Inventories
(i) Inventories of under production films/Animations and other contents
are valued at actual amount spent which includes amount paid, bills
settled and advance paid for which bills are awaited. The residual
values of all the films are valued at NIL as total cost of production
is charged to revenue at the time of first release of such films. Other
inventories are stated at cost.
(ii) Acquired rights pertaining to movies, animations and other
contents are amortized on the exploitation of such rights based on the
management estimates of revenue potential.
4. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
5. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
6. Depreciation and amortisation
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 except in
respect of the following categories of assets, in whose case higher
rates of depreciation has been applied
7. Revenue recognition
i) Revenues from Licensing / public sale of movies are recognized in
accordance with the licensing agreement or on physical delivery of the
movies, whichever is later.
(ii) Recoveries of old films are recognized as and when royalties
earned.
(iii) In respect of services, the company accounts for the revenue are
on the basis of completed contract method.
(iv) Interest income is accounted on accrual basis.
(v) Dividend is recognized when the right to receive the dividend is
unconditionally established at the balance sheet date.
8. Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
9. Tangible fixed assets
Fixed assets, are carried at cost less accumulated depreciation,
Service Tax/VAT Credit availed and impairment losses, if any. The cost
of fixed assets includes interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is
ready for its intended use and other incidental expenses incurred up to
that date. Exchange differences arising on restatement / settlement of
long-term foreign currency borrowings relating to acquisition of
depreciable fixed assets are adjusted to the cost of the respective
assets and depreciated over the remaining useful life of such assets.
Machinery spares which can be used only in connection with an item of
fixed asset and whose use is expected to be irregular are capitalised
and depreciated over the useful life of the principal item of the
relevant assets. Subsequent expenditure relating to fixed assets is
capitalised only if such expenditure results in an increase in the
future benefits from such asset beyond its previously assessed standard
of performance.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Fixed assets acquired in full or part exchange for another asset are
recorded at the fair market value or the net book value of the asset
given up, adjusted for any balancing cash consideration. Fair market
value is determined either for the assets acquired or asset given up,
whichever is more clearly evident. Fixed assets acquired in exchange
for securities of the Company are recorded at the fair market value of
the assets or the fair market value of the securities issued, whichever
is more clearly evident.
10. Intangible Assets
Intangible Assets are recorded at cost of acquisition
11. Investments
(i) Long term: Long term investments shown in the balance sheet are
valued at cost unless there is a permanent diminution in the value, in
such case are valued at the diminished value and the difference is
charged to profit and loss account.
(ii) Disposal of Investments: On disposal of an investment, the
difference between the carrying amount and net disposal proceed is
being charged to profit and loss account determined on the basis of
First in First out (FIFO) Method.
12. Leave Encashment
Leave Encashment expenses are being accounted for as and when the
employee encash.
13. Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
14. Segment reporting
The entire operation of the Company relates to only one segment viz.
Software and Entertainment. As such, there is no separate reportable
segment under Accounting Standards- AS 17 on Segment Reporting.
15. Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
16. Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
17. Provision and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2011
1. BASIS OF ACCOUNTING:
The financial statements of the Company have been prepared and
presented under the historical cost convention, on the accrual basis of
accounting and comply with the accounting standards ('AS')
prescribed by the Companies (Accounting Standards) Rules, 2006 to the
extent applicable and the relevant provisions of the Companies Act,
1956.
2. Use of Estimates:
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities as of the balance sheet date, reported amounts of revenues
and expenses for the period and disclosure of contingent liabilities as
of the balance sheet date. Actual results may differ from those
estimates. Any revision to accounting estimates is recognised
prospectively in current and future periods.
3. FIXED ASSETS:
(i) Fixed Assets are recorded at cost of acquisition or construction
less Service Tax/VAT Credit availed.
(ii) Intangible Assets are recorded at the cost of acquisition.
4. DEPRECIATION:
Depreciation on fixed assets is provided on straight line basis in
accordance with provision of the Companies Act, 1956 at rates and in
the manner specified in schedule XIV of this Act except for the
following fixed assets where higher rates of depreciation have been
applied:
5. INVESTMENTS:
(i) Long term: Long term investments shown in the balance sheet are
valued at cost unless there is a permanent diminution in the value, in
such case are valued at the diminished value and the difference is
charged to profit and loss account.
(ii) Disposal of Investments: On disposal of an investment, the
difference between the carrying amount and net disposal proceed is
being charged to profit and loss account determined on the basis of
First in First out (FIFO) Method.
6. INVENTORIES:
0) Inventories of under production films/Animations and other contents
are valued at actual amount spent which includes amount paid, bills
settled and advance paid for which bills are awaited. The residual
values of all the films are valued at NIL as total cost of production
is charged to revenue at the time of first release of such films. Other
inventories are stated at cost.
(ii) Acquired rights pertaining to movies, animations and other
contents are amortized on the exploitation of such rights based on the
management estimates of revenue potential.
7. REVENUE RECOGNITION:
(i) Revenues from Licensing / public sale of movies are recognized in
accordance with the licensing agreement or on physical delivery of the
movies, whichever is later.
(ii) Recoveries of old films are recognized as and when royalties
earned.
(iii) In respect of services, the company accounts for the revenue are
on the basis of completed contract method.
(iv) Interest income is accounted on accrual basis.
(v) Dividend is recognized when the right to receive the dividend is
unconditionally established at the balance sheet date.
8. BORROWING COSTS: Borrowing costs that are attributable to the
acquisition, construction or production of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is
one that necessarily takes a substantial period of time to get ready
for its intended use. None of the borrowing cost has been capitalized
during the year.
9. RETIREMENT BENEFITS:
Leave Encashment:
Leave Encashment expenses are being accounted for as and when the
employee encash.
10. TAXATION:
Tax expenses comprise Current Tax and Deferred Tax.
11) Current Tax:
Current tax is calculated as per the provision of the Income Tax Act,
1961.
Deferred Tax is recognized on timing differences being the differences
between the taxable incomes and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets, subject to the consideration of prudence 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. The
tax effect is calculated on the accumulated timing difference at the
year-end based on the tax rates and laws enacted or substantially
enacted on balance sheet date.
12. CONTINGENT LIABILITIES:
Contingent liabilities are disclosed after careful evaluation of facts
and legal aspects of the matter involved.