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:
 
 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.
 
 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 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
 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 year figures have been regrouped / recast wherever
 necessary.