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
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.
i) 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.
ii) Work in progress is stated at cost. Cost comprises of movie
production expenses incurred including artiste and other salaries,
shooting expenses etc.
iii) Cost of production of movies produced and not exploited are valued
after considering a provision of 5% on the cost.
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,
e) DEFERRED TAXATION:
Deferred Tax Liability on timing differences of Book and IT
depreciation and distribution rights is provided for.
f) FOREIGN CURRENCYTRANSACTIONS:
Foreign currency transaction 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
collection 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
f) EXPORT OF SERIALS AND FILMS:
Income recognized on accrual based on export Invoices/ Contracts with
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 year figures have been regrouped / recast wherever