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Moneycontrol.com India | Accounting Policy > Media & Entertainment > Accounting Policy followed by Hathway Bhawani Cabletel And Datacom - BSE: 509073, NSE: N.A
Hathway Bhawani Cabletel And Datacom
BSE: 509073|ISIN: INE525B01016|SECTOR: Media & Entertainment
Apr 22, 17:00
0.19 (2.11%)
Hathway Bhawani Cabletel And Datacom is not listed on NSE
Mar 12
Accounting Policy Year : Mar '13
1 Method Of Accounting
 These financial statements are prepared on accrual basis of accounting,
 following historical cost convention, in accordance with the provisions
 of the Companies Act, 1956 (''the Act''), accounting principles
 generally accepted in India and comply with the accounting standards
 prescribed in the Companies (Accounting Standards) Rules, 2006 issued
 by the Central Government, in consultation with the National Advisory
 Committee on Accounting Standards, to the extent applicable. The
 accounting policies have been consistently applied by the Company and
 are consistent with those used in the previous year.
 All assets and liabilities have been classified as current or
 non-current as per the Company''s .  normal operating cycle and other
 criteria set out in the Revised Schedule VI to the Companies
 Act, 1956 notified by MCA vide its notification no. 447(E) dated
 February 28, 2011. Based on the nature of services rendered by the
 Company and realization of consideration in cash and cash equivalents,
 the Company has ascertained its Operating Cycle as less than12 months
 for the purpose of current - non-current classification of assets and
 The accounting policies have been consistently applied by the Company
 and are consistent with those used in the previous year.
 2 Use of estimates
 The preparation of the financial statements in conformity with Indian
 GAAP requires management to make estimates and assumptions that affect
 the reported amounts of assets and liabilities, disclosure of
 contingent liabilities as at the date of financial statements and
 reported amounts of revenue and expenses during the reported period.
 Such estimates are on a reasonable and prudent basis taking into
 account all available information; actual results could differ from
 estimates. Differences on account of revision of estimates actual
 outcome and existing estimates are recognized prospectively once such
 results are known / materialized in accordance with the requirements of
 the respective accounting standard, as may be applicable.
 3 Fixed assets and intangible assets .
 (a) Intangible Assets
 (i) Intangible assets are recognized only if they are separately
 identifiable and the Company expects to receive future economic
 benefits arising out of them. Such assets are stated at cost less
 accumulated amortization and impairment, if any. Internally Generated
 assets are not recognized in the books of accounts.
 (ii) Intangible assets comprises of Cable Television Franchise,
 Goodwill and Software''s.
 (iii) The aggregate consideration paid to acquire CATV / ISP
 Subscribers connected to a network along with Network assets and all
 the rights attached thereto are disclosed under the head Cable
 Television Franchise. In cases where value for assets acquired along
 with Subscribers connected to the network is separately ascertained,
 the assets are capitalized under the relevant heads. The consideration
 paid for non-compete as per the underlying agreements is included in
 (b) Tangible Assets
 (i) The fixed assets are stated at cost less accumulated depreciation
 and impairment, if any. Cost comprises of purchase price, non
 refundable taxes and all expenses incurred in bringing the assets to
 its present location and condition for its intended use and includes
 installation and commissioning expenses. The indirect expenditure
 incurred during the pre-commencement period is allocated
 proportionately over the cost of the relevant assets.
 (ii) Cable Modems and Routers lying on hands at the year-end are
 included in capital Work in Progress. On installation, such devices are
 capitalized or treated as sale based on scheme opted by customers.
 (iii) Nature of some of the items included in Capital Work in Progress
 is such that the same may be used for repairs and maintenance.
 4 Depreciation and amortization
 a) The intangible assets are amortized on a straight line basis over
 their expected useful lives as follows:
 (i) Cable Television Franchise is amortized over a period of twenty
 (ii) Non Compete Fees included in Goodwill is amortized over the
 non-compete period stated in the underline agreement and in absence of
 the same, over five years.
 (iii) Goodwill arising on transfer of business of subsidiaries is fully
 amortized in the same year.
 (iv) Goodwill other than mentioned above is amortized over the specific
 tenor in the relevant agreement or ten years in the event of specific
 tenor in the relevant agreement
 b) Depreciation on fixed assets is computed on written down value
 method, at the rates and manner prescribed in Schedule XIV to the
 Companies Act, 1956,other than Structural Fitting which have been
 depreciated according to the rental agreement for the period of three
 5 Investments
 (a) Long-Term Investments:
 Long-term investments in shares are stated at cost The provision for
 diminution in value of such investments is made if such diminution is
 considered other than temporary.
 On initial recognition, all investments are measured at cost The cost
 comprises purchase price and directly attributable acquisition charges
 such as brokerage, fees and duties.
 (b) Current Investments:
 Current investments are recorded at lower of cost or fair value.
 6 Inventories
 Inventories comprise of spares and maintenance items and STB (Set Top
 Boxes), which are valued at lower of cost (net of taxes recoverable)
 and net realizable value.
 7 Borrowings cost
 Borrowing Costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalized as part of such
 assets. A qualifying asset is an asset that necessarily requires a
 substantial period of time to get ready for its intended use or sale.
 All other Borrowing costs are recognized as an expense in the period in
 which they are incurred.
 8 Provisions, contingent liabilities and contingent assets
 a) A Provision is recognized when the Company has a present obligation
 as a result of past event and it is probable that an outflow of
 resources would be required to settle the obligation, and in respect of
 which a reliable estimate can be made. Provisions are reviewed on each
 balance sheet date and are adjusted to effect the current best
 b) Contingent liabilities are disclosed separately by way of note to
 financial statements after careful evaluation by the management of the
 facts and legal aspects of the matter involved in case of
 (i) a present obligation arising from the past event, when it is not
 probable that an outflow of resources will be required to settle the
 (ii) a possible obligation, unless the probability of outflow of
 resources is remote.
 c) Contingent Assets are neither recognized, nor disclosed.
 9 Employee 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 viz.,
 gratuity, leave encashment, etc., are covered under Defined Benefit
 Plan. The cost of providing benefits are recognized as an expense in
 the statement of profit and loss for the year in which the employee has
 rendered services. The amount of expense is determined on the basis
 actuarial valuation at '' each year-end by Projected Unit Credit Method.
 Actuarial gains and losses in respect of post *
 employment and other long term benefits are charged to the statement of
 profit and loss in the period in which they occur. The Company presents
 the entire liability pertaining to leave encashment as a short term
 provision in the balance sheet, since it does not have an unconditional
 right to defer its settlement for 12 months after the reporting date.
 10 Leases
 Lease rentals in respect of assets taken on ''Operating Lease'' are
 charged to statement of Profit and Loss over the lease term on
 systematic basis which is more representative of the time pattern of
 the Company''s benefit. *
 11 Revenue recognition
 (a) Income From Services
 Income from Operations is recognized on accrual basis based on
 agreements / arrangements with the concerned parties.
 Revenue from sale of prepaid Internet Service plans, which are active
 at the year end, is recognized on time proportion basis. In other cases
 of sale of prepaid Internet Service plans, entire revenue is recognized
 in the year of sale.
 Subscription Income from Cable TV Operators is accrued monthly based on
 number of connections declared by the said operators to the Company, in
 cases where revision of number of connections and rate is under
 negotiations at the time of recognition of revenue, the Company
 recognizes revenue as per invoice raised. Adjustments for the year, if
 any, arising on settlement is adjusted against the Revenue. Other cases
 are reviewed at the year-end and provision for doubtful debts is made
 wherever ultimate realization is considered uncertain.
 Interest income is recognized on accrual basis.
 (b) Sale of Goods
 Revenue from sale of Access Devices is recognized when all the
 significant risks and rewards of ownership of the goods have been
 passed to the buyer, usually on delivery of the goods. The Company
 collects sales taxes and value added taxes (VAT) on behalf of the
 Government and, therefore, these are not economic benefits flowing to
 the Company. Hence, they are excluded from revenue.
 12 Taxes on income
 a) Provision for Current Tax is made on the basis of taxable profits
 computed for the current accounting period (reporting period) in
 accordance with the Income Tax Act, 1961.
 b) Deferred Tax is calculated at the tax rates and laws that have been
 enacted or substantively enacted as of the Balance Sheet date and is
 recognized on timing difference that originate in one period and are
 capable of reversal in one or more subsequent periods. Deferred Tax
 assets are recognized on carry forward of unabsorbed depreciation and
 tax losses only if there is virtual certainty that such deferred tax
 assets can be realized against future taxable income. Other deferred
 tax assets are recognized only to the extent that there is a reasonable
 certainty of realization in future.
 c) ''Minimum Alternate Tax (MAT) credit is recognized as an asset in
 accordance with the recommendations contained in guidance note issued
 by the Institute of Chartered Accountants of India, only when and to
 the extent there is convincing evidence that the company will pay
 normal income tax during the specified period. The said asset is
 created by way of a credit to the profit and loss account and shown as
 MAT Credit Entitlement The Company reviews the same at each balance
 sheet date and writes down the carrying amount of MAT Credit
 Entitlement to the extent there is no longer convincing evidence to the
 effect that Company will pay normal Income Tax during the specified
 period. Tax on distributed profits payable in accordance with the
 provisions of section 115 O of the Income Tax Act, 1961 is, in
 accordance with the Guidance Note on Accounting for Corporate Dividend
 Tax, regarded as a tax on distribution of profits and is not considered
 in determination of the profits for the year.''
 13 Impairments
 The Company assesses at each balance sheet whether there is any
 indication that assets may
 - be impaired. If any such indications exist, the Company estimates
 the recoverable amount of the assets or the cash-generating unit and if
 the same is less than its carrying amount, the carrying amount is
 reduced to its recoverable amount The reduction is treated as an
 impairment loss and is recognized in the profit and loss account. If at
 the balance sheet date there is an indication that if a previously
 assessed impairment loss no longer exists, the recoverable amount is
 reassessed and the assets are reflected at the recoverable amount.
 14 Cash & Cash Equivalent
 Cash and cash equivalents for the purposes of cash flow statement
 comprise cash at bank, cash in hand, demand deposits with banks and
 other short-term investments with an original maturity of three months
 or less.
 15 Earnings Per Share
 a) Basic earnings per share are calculated by dividing the net profit
 or loss for the period attributable to equity shareholders (after
 deducting preference dividends and attributable taxes) by the weighted
 average number of equity shares outstanding during the period. Partly
 paid equity shares are treated as a fraction of an equity share to the
 extent that they are entitled to participate in dividends relative to a
 fully paid equity share during the reporting period. The weighted
 average number of equity shares outstanding during the period is
 adjusted for events such as bonus issue, bonus element in a rights
 issue, share split, and reverse share split (consolidation of shares)
 that have changed the number of equity shares outstanding, without a
 corresponding change in resources.
 b) For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 16 Measurement of EBITDA
 As permitted by the Guidance Note on the Revised Schedule VI to the
 Companies Act, 1956, the company has elected to present earnings before
 interest, tax, depreciation and amortization (EBITDA) as a separate
 line item on the face of the statement of profit and loss. The company
 measures EBITDA on the basis of profit/ (loss) from continuing
 operations. In its measurement, the company does not include
 depreciation and amortization expense, finance costs and tax expense.
Source : Dion Global Solutions Limited
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