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
recognized 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
b) Trademark, Knowledge based content, Copyright and Software are
capitalised as an intangible asset in the year it is put to use.
c) Cost incurred on development/improvement of leasehold assets is
d) Capital Work-in-progress is stated to the extent of expenditure
incurred upto the date of Balance sheet including advances for capital
4. Borrowing Costs
Borrowing Costs attributable to the acquisition or construction of
qualifying assets are capitalized as a part of the cost of such assets.
All other borrowing costs are charged to revenue.
5. Impairment of Assets
At each Balance Sheet date, the Company reviews the carrying amount of
fixed assets to determine whether there is an indication that those
assets have suffered impairment loss. If any such indication exists,
the recoverable amount of assets is estimated in order to determine the
extent of impairment loss. The recoverable amount is higher of the net
selling price and value in use, determined by discounting the estimated
future cash flows expected from the continuing use of the asset to
their present value.
a) Depreciation on fixed assets is provided on Straight Line Method at
the rate specified in Schedule XIV to the Companies Act, 1956.
b) Leasehold Improvements are amortized over the period of Lease.
c) (i) Costs of Trademarks are amortized over a period of ten years.
(ii) Copyrights are amortized on straight-line basis over the license
(iii) Other intangible assets are amortized over a period of three
years based on managements estimate of useful life.
a) Investments intended to be held for more than one year, from the
date of acquisition, are classified as long-term and are carried at
cost. Provision for diminution in value of these investments is made,
to recognize a decline other than temporary.
b) Current Investments are carried at cost or fair value, whichever is
8. Revenue Recognition
a) Broadcasting Revenue
Advertisement revenue (net of agency commission) is recognized when the
related advertisement appears before the public i.e. on telecast.
b) Educational Services
i) Course fees and Royalty income is recognized over the duration of
ii) Franchise fees is recognized as and when due.
c) For other services, revenue is recognized when the service is
d) Sale is recognized when the risk and rewards of ownership are passed
onto the customers, which is generally on dispatch of goods.
e) Dividend Income is recognized when the right to receive the dividend
a) Educational Materials/Equipments are valued at lower of cost or
estimated net realizable value. Cost means average cost.
b) Raw Tapes are valued at lower of cost or estimated net realizable
value. Cost is determined on First In First Out (FIFO) basis.
10. Program Rights
Program rights are stated at lower of net cost (cost minus accumulated
amortization/impairment) or realizable value. Where the realizable
value on the basis of its useful economic life is less than its
carrying amount, the difference is expensed as impairment. Program
Rights 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.
a) Program Costs (with no repeat value) are fully expensed on telecast.
b) Program Costs (with repeat value) are amortized over three financial
years from the year of telecast.
11. 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.
b) Post employment and other long-term employee benefits are recognized
as an expense in the profit and loss account for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amount payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long-term benefits are charged to the profit and
12. Accounting for Taxes on Income
a) Current Tax is determined as the amount of tax payable in respect of
taxable income for the year as per the provisions of the Income Tax
b) Deferred tax is recognized, subject to consideration of prudence, on
timing difference, being the difference between taxable income 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.
13. Operating Lease
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Lease payments under operating leases are recognized as expense on
accrual basis in accordance with the respective lease agreements.
14. Transactions in Foreign Currency
a) Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transaction.
b) Foreign Currency monetary assets and liabilities are reported using
the closing rate. Gains and losses arising on account difference in
foreign exchange rates on settlement/translation of monetary assets and
liabilities on the closing date are recognized in the Profit and Loss
15. Earnings per Share
Basic earnings per share is computed and disclosed using the weighted
average number of common shares outstanding during the year. Dilutive
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.
16. 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.