Accounting Policies of Midvalley Entertainment Ltd. Company

Mar 31, 2014

A. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements are prepared under the historical cost convention on an accrual basis and comply with the accounting standards issued by the Institute of Chartered Accountants of India referred to in section 211 (3C) of the Companies Act, 1956

b. FIXED ASSETS AND DEPRECIATION:

i. Fixed Assets are stated at Cost of Acquisition Less accumulated depreciation.

ii. Depreciation is provided from the date on which the assets have been installed and put to use, under the written down value method at the rates and in the manner specified under schedule XIV of the Companies Act, 1956.

iii. In respect of satellite rights of films, the cost of the asset is written off proportionately over a period of ten years.

c. INVENTORIES

1. Inventories are valued at cost or net realizable value whichever is lower. The Company Amortizes 60% of the cost of the rights acquired or produced by it, in the year of first theatrical release of the movie. Balance 40% is amortized over the balance license period or based on management estimate of future revenue potential, as the case may be.

2. Work in progress is stated at cost. Cost comprises of movie production expenses incurred including artiste and other salaries, shooting expenses etc.

3. Cost of production of movies Produced and not exploited are valued after considering a provision of 5% on the cost.

d. TAXATION:

Provision for Income tax has been made at the current tax rates based on the assessable income under the provisions of the Income Tax Act, 1961.

e. DEFERRED TAXATION:-

Deferred Tax Liability on timing differences of Book and IT depreciation and distribution rights is provided for.

f. FOREIGN CURRENCY TRANSACTIONS:-

Foreign currency transactions are recorded in the books by applying the exchange rate as on the transaction. Investments in foreign currency are reported using the exchange rate at the date of transaction. Our foreign currency transactions are converted at the exchange rate prevailing on the last working day of the accounting year. Fluctuations in the exchange rate transactions are charged to profit & loss account, wherever necessary. In respect of foreign currency transactions in fixed asset, the exchange gain or loss is adjusted in the carrying amount of fixed assets and accordingly depreciation is charged.

g. Retirement Benefits

Contribution to Provident Fund and Earned Leave Encashment are accounted on actual liability basis. The liability in respect of Gratuity is not provided based on the actuarial valuation.

h. IMPAIRMENT OF FIXED ASSETS

The company provides for impairment of assets in accordance with AS28 Issued by the ICAI. During the year, no provision for impairment is considered necessary after considering the amortization and depreciation provided for.

i. REVENUE RECOGNITION:-

a) SALE OF FILM RIGHTS:

Revenues arising from sale of Distribution rights of the feature films produced by the company are recognized on accrual basis, based on specific distribution contracts. Income is recognized only upon completion of the project and obtaining a valid film Censorship Certificate.

b) DISTRIBUTION OF FILMS:

Income from own distribution of films are to the extent of the collections received from the distribution areas.

c) SALE OF SATELLITE RIGHTS:

Incomes from sale of Satellite rights are recognized based on contract of sale and the amounts received.

d) SALE OF PROGRAMMES :

Incomes on sale of Programmes are recognized on accrual basis based on the Invoices raised.

e) SALE OF AUDIO RIGHTS AND ROYALTIES:

Income from sale of Audio rights is accounted on accrual basis based on specific contracts. Income from Royalties is accounted on accrual basis based on the contract with the music companies. Audio Rights and Royalties are recognized only upon completion and released of the audio albums.

f) EXPORT OF SERIALS AND FILMS:

Income recognized on accrual based on export invoices/contracts with overseas companies.

g. THEATRE INCOME:

Income recognized on receipt of Daily Collection report.

h. MISCELLANEOUS EXPENDITURE :-

Miscellaneous Expenditure represents expenses incurred in connection with the public issue which would be written off over five years.

i. Previous years figures have been regrouped / recast wherever necessary.

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Apr 30, 2013

A. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements are prepared under the historical cost convention on an accrual basis and comply with the accounting standards issued by the Institute of Chartered Accountants of India referred to in section 211 (3C) of the Companies Act, 1956

b. FIXED ASSETS AND DEPRECIATION:

i. Fixed Assets are stated at Cost of Acquisition Less accumulated depreciation.

ii. Depreciation is provided from the date on which the assets have been installed and put to use, under the written down value method at the rates and in the manner specified under schedule XIV of the Companies Act, 1956.

iii. In respect of satellite rights of films, the cost of the asset is written off proportionately over a period of ten years.

c. INVENTORIES

1. Inventories are valued at cost or net realizable value whichever is lower. The Company Amortizes 60% of the cost of the rights acquired or produced by it, in the year of first theatrical release of the movie. Balance 40% is amortized over the balance license period or based on management estimate of future revenue potential, as the case may be.

2. Work in progress is stated at cost. Cost comprises of movie production expenses incurred including artiste and other salaries, shooting expenses etc.

3. Cost of production of movies Produced and not exploited are valued after considering a provision of 5% on the cost.

d. TAXATION:

Provision for Income tax has been made at the current tax rates based on the assessable income under the provisions of the Income Tax Act, 1961.

e. DEFERRED TAXATION:-

Deferred Tax Liability on timing differences of Book and IT depreciation and distribution rights is provided for.

f. FOREIGN CURRENCY TRANSACTIONS:-

Foreign currency transactions are recorded in the books by applying the exchange rate as on the transaction. Investments in foreign currency are reported using the exchange rate at the date of transaction. Our foreign currency transactions are converted at the exchange rate prevailing on the last working day of the accounting year. Fluctuations in the exchange rate transactions are charged to profit & loss account, wherever necessary. In respect of foreign currency transactions in fixed asset, the exchange gain or loss is adjusted in the carrying amount of fixed assets and accordingly depreciation is charged.

g. Retirement Benefits

Contribution to Provident Fund and Earned Leave Encashment are accounted on actual liability basis. The liability in respect of Gratuity is not provided for during the year.

h. IMPAIRMENT OF FIXED ASSETS

The company provides for impairment of assets in accordance with AS28 Issued by the ICAI. During the year, no provision for impairment is considered necessary after considering the amortization and depreciation provided for.

i. REVENUE RECOGNITION:-

a) SALE OF FILM RIGHTS:

Revenues arising from sale of Distribution rights of the feature films produced by the company are recognized on accrual basis, based on specific distribution contracts. Income is recognized only upon completion of the project and obtaining a valid film Censorship Certificate.

b) DISTRIBUTION OF FILMS:

Income from own distribution of films are to the extent of the collections received from the distribution areas.

c) SALE OF SATELLITE RIGHTS:

Incomes from sale of Satellite rights are recognized based on contract of sale and the amounts received.

d) SALE OF PROGRAMMES :

Incomes on sale of Programmes are recognized on accrual basis based on the Invoices raised.

e) SALE OF AUDIO RIGHTS AND ROYALTIES:

Income from sale of Audio rights is accounted on accrual basis based on specific contracts. Income from Royalties is accounted on accrual basis based on the contract with the music companies. Audio Rights and Royalties are recognized only upon completion and released of the audio albums.

f) EXPORT OF SERIALS AND FILMS:

Income recognized on accrual based on export invoices/contracts with overseas companies.

g) THEATRE INCOME:

Income recognized on receipt of Daily Collection report.

j. MISCELLANEOUS EXPENDITURE :-

Miscellaneous Expenditure represents expenses incurred in connection with the public issue which would be written off over five years.

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May 31, 2012

A. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements are prepared under the historical cost convention on an accrual basis and comply with the accounting standards issued by the Institute of Chartered Accountants of India referred to in section 211 (3C) of the Companies Act, 1956

b. FIXED ASSETS AND DEPRECIATION:

i. Fixed Assets are stated at Cost ofAcauisition Less accumulated depreciation.

ii. Depreciation is provided from the date on which the assets have been installed and put to use, under the written down value method at athe rates and in the manner specified under schedule XIV of the Companies Act, 1956.

iii. In respect of satellite rights of films, the. cost of the asset is written off proportionately over a period of ten years.

c. INVENTORIES

1. Inventories are valued at cost or net realizable value whichever is lower. The Company Amortizes 60% of the cost of the rights acquired or produced by it, in the year of first theatrical release of the movie. Balance 40% is amortized over the balance license period or based on management estimate of future revenue potential, as the case may be.

2. Work in progress is stated at cost. Cost comprises of movie production expenses incurred including artiste and other salaries, shooting expenses etc.

3. Cost of production of movies Produced and not exploited are valued after considering a provision of 5% on the cost.

d. TAXATION:

Provision for Income tax has been made at the current tax rates based on the assessable income under the provisions of the Income Tax Act, 1961.

e. DEFERRED TAXATION:-

Deferred Tax Liability on timing differences of Book and IT depreciation and distribution rights is provided for.

f. FOREIGN CURRENCY TRANSACTIONS:-

Foreign currency transactions are recorded in the books by applying the exchange rate as on the transaction. Investments in foreign currency are reported using the exchange rate at the date of transaction. Our foreign currency transactions are converted at the exchange rate prevailing on the last working day of the accounting year. Fluctuations in the exchange rate transactions are charged to profit & loss account, wherever necessary. In respect of foreign currency transactions in fixed asset, the exchange gain or loss is adjusted in. the carrying amount of fixed assets and accordingly depreciation is charged.

g. Retirement Benefits

Contribution to Provident Fund and Earned Leave Encashment are accounted on actual liability IfasisvThe liabilityinltespect of Gratuity is not provided for during the year.

h. IMPAIRMENT OF FIXED ASSETS

The company provides for impairment of assets in accordance with AS28 Issued by the ICAI. During the year, no provision for impairment is considered necessary after considering the amortization and depreciation provided for.

i. REVENUE RECOGNITION:-

a) SALE OF FILM RIGHTS:

Revenues arising from sale of Distribution rights of the feature films produced by the company are recognized on accrual basis, based on specific distribution contracts. Income is recognized only upon completion of the project and obtaining a valid film Censorship Certificate.

b) DISTRIBUTION OF FILMS:

Income from own distribution of films are to the extent of the collections received from the distribution areas.

c) SALE OF SATELLITE RIGHTS:

Incomes from sale of Satellite rights are recognized based on contract of sale and the amounts received.

d) SALE OF PROGRAMMES :

Incomes on sale of Programmes are recognized on accrual basis based on the Invoices raised.

e) SALE OF AUDIO RIGHTS AND ROYALTIES:

Income from sale of Audio rights is accounted on cash basis based on specific contracts. Income from Royalties is accounted on accrual basis based on the contract with the music companies. Audio Rights and Royalties are recognized only upon completion and released of the audio albums.

f) EXPORT OF SERIALS AND FILMS:

Income recognized on accrual based on export invoices/contracts with overseas companies.

g) THEATRE INCOME:

Income recognized on receipt of Daily Collection report.

j. MISCELLANEOUS EXPENDITURE :-

Miscellaneous Expenditure represents expenses incurred in connection with the public issue which would be written off over five years.

k. Previous years figures have been regrouped / recast wherever necessary.