a.  Basis of Preparation
 
 the financial statements have been prepared to comply in all material
 respects in respects with the Notified accounting standards by
 companies accounting standards rules, 2006 (as amended) and the
 relevant provisions of the companies act, 1956. the financial
 statements have been prepared under the historical cost convention on
 an accrual basis. the accounting policies have been consistently
 applied by the company, are consistent with those used in the previous
 year.
 
 b.  Use of Estimates
 
 the preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 period. although these estimates are based upon management''s best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 c.  Fixed Assets
 
 fixed assets are stated at cost less accumulated depreciation. cost
 comprises the purchase price and any attributable cost of bringing the
 asset to its working condition for its intended use. Borrowing costs
 relating to acquisition of fixed assets which takes substantial period
 of time to get ready for its intended use are also included to the
 extent they relate to the period till such assets are ready to be put
 to use.
 
 d.  Depreciation
 
 Depreciation is provided using the straight Line method as per the
 useful lives of the assets estimated by the management, or at the rates
 prescribed under schedule XiV of the companies act, 1956 whichever is
 higher.
 
 e.  Intangible Assets
 
 Film Rights
 
 the company amortizes film costs using the individual-film-forecast
 method. under the individual-film- forecast method, such costs are
 amortized for each film in the ratio that current period revenue for
 such films bears to management''s estimate of remaining unrecognized
 ultimate revenue as at the beginning of the current fiscal year.
 management regularly reviews and revises, where necessary, its total
 estimates on a film- by-film basis, which may result in a change in the
 rate of amortization and/or a write down of the intangible asset to
 fair value.
 
 Software
 
 software is amortized on straight line basis over its estimate of
 useful life which is estimated to be six years.
 
 f.  Impairment
 
 the carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal/external
 factors. an impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount. the recoverable amount is
 the greater of the asset''s net selling price and value in use. in
 assessing value in use, the estimated future cash flows are discounted
 to their present value at the weighted average cost of capital.
 
 g.  Leases
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased item are classified as
 operating leases. operating lease payments are recognized as an expense
 in the profit and Loss account on a straight line basis over the leased
 term.
 
 h.  Investments
 
 investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. all other
 investments are classified as long-term investments. current
 investments are carried at lower of cost and fair value determined on
 an individual investment basis. Long-term investments are carried at
 cost. However, provision for diminution in value is made to recognize a
 decline other than temporary in the value of the investments.
 
 i.  Revenue Recognition
 
 revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the company and the revenue can be
 reliably measured.
 
 technical services receipts are recognized on the basis of services
 rendered and when no significant uncertainty exists as to its
 determination or realisation using proportionate completion method.
 
 unbilled revenue represents revenue recognized based on proportionate
 completion not yet invoiced to the customers.
 
 revenue from tV program production services are recognized on delivery
 of the episodes.
 
 interest income is recognized on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 Dividends are recognized when the shareholders'' right to receive
 payment is established by the Balance sheet date.  Dividend from
 subsidiaries is recognized even if same are declared after the balance
 sheet date but pertains to period on or before the date of Balance
 sheet as per the requirement of schedule Vi of the companies act, 1956.
 
 undertaking fees is recognized on accrual basis over the tenure of the
 undertaking given.
 
 j.  Foreign Currency Transactions Initial Recognition
 
 foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 transaction.
 
 Conversion
 
 foreign currency monetary items are reported using the closing rate.
 Non-monetary items which are carried in terms of historical cost
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transaction; and non-monetary items which are
 carried at the fair value or other similar valuation denominated in a
 foreign currency are reported using the exchange rates that existed
 when the values were determined.
 
 Exchange Differences
 
 exchange differences, in respect of accounting periods commencing on or
 after December 7, 2006, arising on reporting of long-term foreign
 currency monetary items at rates different from those at which they
 were initially recorded during the period, or reported in previous
 financial statements, in so far as they relate to the acquisition of a
 depreciable capital asset, are added to or deducted from the cost of
 the asset and are depreciated over the balance life of the asset, and
 in other cases, are accumulated in a foreign currency monetary item
 translation Difference account in the enterprise''s financial
 statements and amortized over the balance period of such long- term
 asset/liability but not beyond accounting period ending on or before
 march 31, 2012.
 
 exchange differences arising on the settlement of monetary items not
 covered above, or on reporting such monetary items of company at rates
 different from those at which they were initially recorded during the
 year, or reported in previous financial statements, are recognized as
 income or as expenses in the year in which they arise.
 
 k.  Income Taxes
 
 tax expense comprises of current, deferred and fringe benefit tax.
 current income tax and fringe benefit tax is measured at the amount
 expected to be paid to the tax authorities in accordance with the
 income tax act, 1961 enacted in india. Deferred income taxes reflects
 the impact of current year timing differences between taxable income
 and accounting income for the year and reversal of timing differences
 of earlier years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets and deferred tax liabilities are offset, if a legally
 enforceable right exists to set off current tax assets against current
 tax liabilities and the deferred tax assets and deferred tax
 liabilities relate to the taxes on income levied by same governing
 taxation laws. Deferred tax assets are recognized only to the extent
 that there is reasonable certainty that sufficient future taxable
 income will be available against which such deferred tax assets can be
 realised. in situations where the company has unabsorbed depreciation
 or carry forward tax losses, all deferred tax assets are recognized
 only if there is virtual certainty supported by convincing evidence
 that they can be realised against future taxable profits.
 
 at each balance sheet date the company re-assesses unrecognized
 deferred tax assets. it recognizes unrecognized deferred tax assets to
 the extent that it has become reasonably certain or virtually certain,
 as the case may be that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.
 
 the carrying amount of deferred tax assets are reviewed at each balance
 sheet date. the company writes-down the carrying amount of a deferred
 tax asset to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realised. any such write-down is reversed to the extent that it becomes
 reasonably certain or virtually certain, as the case may be, that
 sufficient future taxable income will be available.
 
 minimum alternative tax (mat) credit is recognized as an asset only
 when and to the extent there is convincing evidence that the company
 will pay normal income tax during the specified period. in the year in
 which the mat credit becomes eligible to be recognized as an asset in
 accordance with the recommendations contained in guidance Note issued
 by the institute of chartered accountants of india, 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.
 
 l.  Segment Reporting
 
 the company''s operations predominantly relate to providing end-to-end
 post production services to the media '' and entertainment industry
 viz., films and television. the company''s operating businesses are
 organized and managed according to the services and are identified as
 reportable segment based on the dominant source and nature of risks and
 returns as primary and secondary segments. the analysis of geographical
 segments is based on the areas in which major operating divisions of
 the company operate.
 
 m.  Earnings Per Share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period. the
 weighted average numbers of equity shares outstanding during the period
 are adjusted for events of bonus issue; bonus element in a rights issue
 to existing shareholders; share split; and reverse share split
 (consolidation of shares).
 
 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.
 
 n.  Provisions
 
 a provision is recognized when an enterprise has a present obligation
 as a result of past event; it is probable that an outflow of resources
 will be required to settle the obligation, 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 date and adjusted to reflect the current best
 estimates.
 
 o.  Cash & Cash Equivalents
 
 cash and cash equivalents in the balance sheet comprise cash at bank
 and in hand, short term investments with original maturity of three
 months or less and fixed deposits with banks.
 
 p.  Derivative Instruments
 
 as per the icai announcement, accounting for derivative contracts,
 other than those covered under as-11, are marked to market on a
 portfolio basis, and the net loss after considering the offsetting
 effect on the underlying hedge item is charged to the income statement.
 Net gains, if any, are ignored.
 
 q.  Retirement and other Employee Benefits
 
 post employment benefits and other long term benefits:
 
 retirement benefits in the form of provident fund and family pension
 fund is a defined contribution scheme and the contributions are charged
 to the profit and loss account of the year when the contributions to
 the respective funds are due. Liability in respect thereof is
 determined on the basis of contributions as required under the
 
 statue/rules. there are no other obligations other than the
 contribution payable to the respective trusts.
 
 gratuity liability is a defined benefit obligation and is provided for
 on the basis of an actuarial valuation done as per projected unit
 credit method, carried out by an independent actuary at the end of the
 year.