Mar 31, 2010
1.1 Basis of Preparation
The Financial statements have been prepared on the historical cost
convention on going concern basis, in accordance with Generally
Accepted Accounting Principles, the relevant provisions of the
Companies Act, 1956 complying in all materials respects with the
mandatory Accounting Standards issued by the Institute of Chartered
Accountants of India. The company generally follows the mercantile
system of accounting and recognizes income and expenditure on accrual
basis.
1.2 Use of Estimates
The preparation of the financial statement in conformity with the GAAP
requires that the management makes estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of financial statements, and the
reported amounts of revenue and expenses during the reported year.
Examples of such estimate include estimated useful life of fixed
assets. Actual results could differ from those estimates.
1.3 Principles of Consolidation
The consolidated financial statements relate the company (Sanraa Media
Limited) and its Subsidiaries (Sanraa Global Green Energy Limited and
G4 Infocom Pte Ltd). The consolidated financial statements have been
prepared on the following basis:
(i)The Financial statements of the Company and its subsidiaries are
combined on a line by line basis, by adding the like items of assets,
liabilities, income and expenses after fully eliminating intra group
balances and intra group transactions resulting in unrealized profit or
losses in accordance with the Accounting standard (AS - 21)
"Consolidated Financial Statements"
(ii) The Company does not have minority shareholders therefore there is
no need to disclose the adjustment of minority interest share of net
profit or loss against income of the company and also the share of net
assets as a separate item from liabilities in the consolidated Balance
Sheet.
(iii) The Consolidated Financials statements are prepared using uniform
Accounting policies for like transactions and other events in similar
circumstances and are presented in the same manner as the stand alone
financial statement of the Company
(iv) Investments other than in subsidiary are accounted as per AS 13 "
Accounting for Investments"
(v) Previous year figures have not been indicated in the absence of
Holding-subsidiary relationship.
1.4 Fixed Assets
Fixed assets are stated at historical cost after reducing accumulated
depreciation until the date of the Balance Sheet.
Direct costs are capitalised until the assets are ready for use and
include financing costs relating to borrowing attributable to
acquisition.
Software (asset) represents the capitalised cost of expenditures such
as rent, salaries, power, relevant overheads and test marketing
expenses incurred in the earlier years towards the development of
softwares.
Goodwill represents the difference between the purchase price and the
book value of assets and liabilities acquired.
IPRS represent the cost of acquisition of film distribution rights.
1.5 Depreciation
Depreciation is recognised only in respect of Fixed Assets put to use.
Individual assets acquired for less than Rs 5000/- are entirely
depreciated in the year of acquisition.
Depreciation on other Fixed Assets have been provided on written down
value on a pro rata monthly basis at the rates specified in Schedule
XIV of the companies Act, 1956.
Intangible assets such as software and goodwill are amortised over the
estimated useful life of the assets determined by the management.
1.6 Revenue recognition
Animation development service revenue is recognized on proportionate
completion method on the total value of the contracts.
Revenue from animation academy and E-learning are recognized
proportionate to the period of instruction.
Income from Media trading activity is recognized upon execution of
agreements for sale and purchase.
1.7 Foreign currency transactions
Foreign Currency transaction arises on account of export of software
services.
The transactions on export of services are recorded as per the rates
prevailing on the date of rendering services.
Exchange differences arising upon collection from such transactions are
charged or credited to the profit and loss account.
1.8 Retirement Benefits
The contribution payable by the company to Provident Fund is charged to
revenue. The liability for Gratuity to employees as at the Balance
Sheet date is determined on the basis of actuarial valuation using
Projected Unit Credit method The liability thereof paid/payable is
absorbed in the accounts. The actuarial gains/losses are recognized in
the Profit and Loss Account.
1.9 Miscellaneous expenditure
The company has accumulated in the earlier years Research and
Development expenses on software as miscellaneous expenditure (Assets).
The company has written off such expenditure on straight line method,
in proportion to the period of its utility estimated by the management.
1.10 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year and determined in accordance with provisions of the income tax
act, 1961.
Deferred tax is recognized, on timing differences, being the difference
between taxable incomes and accounting income computed using the tax
rates and the laws that have been enacted or substantively enacted as
of the Balance sheet date. Deferred tax assets are recognized only if
there is a virtual certainty that there will be realized and reviewed
for the appropriateness of their carrying values at each Balance sheet
date.
1.11 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a
result of past vents and it is probable that an outflow of resources
will be required to settle the obligations, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet and adjusted to reflect the current best estimates.
Contingent Liability is disclosed for possible obligation which will be
confirmed only by future events not wholly within the control of the
company (or) Present obligation arising from past events where it is
not probable that an outflow of resources will be required to settle
the obligation or reliable estimate of the amount of obligation cannot
be made. Contingent asset not recognized in the financial statements
since this may result in the recognition of income that may never be
realized.
1.12 Interim Financial Reporting
The company has adopted in the preparation of interim financial
statements, the accounting policies, consistent with those of the
annual financial statements.
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