a.  Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention to comply in all material aspects with all the applicable
 accounting principles in India, the applicable accounting standards
 notified under section 211(3C) of the Companies Act, 1956 and the
 relevant provisions of the Companies Act, 1956.
 
 The Company follows mercantile system of accounting and recognizes
 items of income and expenditure on accrual basis.
 
 b.  Fixed Assets
 
 Fixed assets are stated at their original cost and include all expenses
 relating to acquisition and installation. Fixed Assets include digital
 satellite receivers, included under Plant and Machinery, generally
 installed at the premises of the channel partner.
 
 c.  Intangible Assets
 
 Acquired Intangible Assets expected to provide future enduring benefits
 are stated at their original cost and include all expenses relating to
 acquisition and installation.
 
 d.  Depreciation/ Amortisation
 
 - Depreciation on Fixed Assets (other than Leasehold Improvements,
 Digital Satellite Receiver boxes and Intangibles) is provided on
 straight-line method at the rates prescribed in Schedule XIV on triple
 shift basis.
 
 - Leasehold Land and Leasehold Improvements are written off over the
 period of the lease.
 
 - Assets costing less than Rs.5000/- are depreciated over a period of
 12 months.
 
 - Digital Satellite Receiver Boxes (included in Plant & Machinery) are
 being depreciated over the useful life of 3 years at the rate of 33.33%
 per annum on straight-line method.
 
 - Intangible Assets are amortised on a Straight Line basis over their
 estimated useful life on a case to case basis.
 
 e.  Revenue recognition
 
 Income from broadcasting operations: Advertisement Revenue is
 recognized for the period for which services have been provided and for
 which there is certainty of ultimate collection, Subscription revenue
 is recognized on the basis of the terms of the contract with the
 distributor.
 
 f.  Investments
 
 Long-term investments are stated at cost of acquisition. Provision is
 made for diminution, other than temporary, in the carrying value
 thereof, in valuation of investments. Current Investments are stated at
 lower of cost or fair value.
 
 g.  Employee benefits
 
 (a) Short Term Employee Benefits
 
 Short term employee benefits are recognised in the period during which
 the services have been rendered.
 
 (b) Long Term Employee Benefits
 
 i) Defined Contribution plan
 
 Company''s Contributions to Provident Fund, Employees'' State Insurance
 Scheme and Employee Pension Scheme, which are Defined Contribution
 Schemes, are expensed in the Profit and Loss Account at the year when
 the contributions are due. The Company has no further obligations under
 these plans beyond its monthly contributions to the respective
 government funds.
 
 (ii) Defined benefit plan
 
 The Company provides for the liability at year end on account of
 gratuity and leave encashment as per the actuarial valuation carried
 out by independent actuary at the year end as per the Projected Unit
 Credit Method.  Actuarial gains and losses comprise experience
 adjustments and the effects of changes in actuarial assumptions and are
 recognized immediately in the Profit and Loss Accounts as income or
 expense.  The Gratuity Plan of the Company provides a lump sum payment
 to vested employees at retirement or termination of employment based on
 the respective employee salary and years of employment with the
 Company. Gratuity Fund is recognized by the income tax authorities and
 is administered and managed by the Life Insurance Corporation of India
 (LIC).  
 
 (iii) Termination benefits are recognized as an expense immediately.
 
 h.  Foreign currency transactions
 
 - Foreign exchange transactions during the year are recorded at the
 exchange rates prevailing on the dates of the transactions. Gains or
 losses arising out of fluctuations in rate between transaction date and
 settlement date are recognized in the Profit and Loss account.
 
 - Monetary Assets and Liabilities are translated at the exchange rates
 prevailing at year-end rate and the resultant gain/loss is recognized
 in the Profit and Loss Account.
 
 i.  Taxes on Income
 
 Tax expense for the Year, comprising current tax and deferred tax is
 included in determining the net profit for the year. Current Tax is
 determined based on liability computed in accordance with relevant tax
 rates and tax laws.
 
 Deferred tax is recognized for all timing differences arising between
 accounting income and taxable income and are measured at the tax rates
 and tax laws that have been enacted or substantively enacted as on the
 balance sheet date.
 
 Deferred tax assets are carried forward to the extent there is
 reasonable certainly that sufficient future taxable profits will be
 available against which such defereed tax assets can be realized.
 
 j.  Leases
 
 Lease of assets under which significant risks and rewards of ownership
 are effectively retained by the lesses. Lease payments under an
 operating lease are recognized as expense in the profit and loss
 account, on a straight line basis over the lease term.
 
 k.  Earnings per Share
 
 Basic Earning Per Share is calculated by dividing the net profit or
 loss for the year attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the year.
 
 For calculating diluted number of shares the net Profit/ (loss) for the
 year attributable to equity shareholders and the weighted aveage number
 of shares outstanding the year are adjusted for the effects of all
 diluted potential equity shares.
 
 I.  Borrowing Cost
 
 Borrowing costs attributable to the acquisition or construction of a
 qualifying asset is capitalized as a part of the cost of that asset.
 Other borrowing costs are recognized as an expense in the period in
 which they are incurred.
 
 m.  Employee stock based compensation
 
 The Company calculates the employee stock compensation expense on the
 intrinsic value method wherein the excess of market price of underlying
 equity shares as on the date of the grant of options over the exercise
 price of the options given to employees under the Employee Stock Option
 Scheme of the Company, is recognized as deferred principles in
 accordance with guidelines of Securities and Exchange Board of India
 and guidance note issued by the Institute of Chartered Accountants of India.
 
 n.  Provisions and Contingencies
 
 Provisions are recognized when the Company has a present obligation as
 a result of past event and it is more likely than not that an outflow
 of resources will be required to settle the obligation and the amount
 has been reliably estimated. These are reviewed at each balance sheet
 date and adjusted to reflect the current best estimates. A disclosure
 for contingent liabilities made when this is a possible obligation or a
 present obligation that probably will not require an outflow of
 resource or where a reliable entrance of obligation cannot be made. 
 
 o.  Impairment of Assets
 
 Management periodically assesses using, external and internal sources,
 whether there is an indiration that an asset may be impaired.
 Impairment occurs where the carrying value exceeds the present value of
 future cash flows expected to arise from the continuing use of the
 asset and its eventual disposal. The impairment loss to be expenseded
 is determined as the excess of the carrying amount over the higher of
 the asset''s net sales price or present value as determined above.