a) Basis of Accounting :
 
 The financial statements are prepared to comply in all material aspects
 with all the applicable accounting principles in India, the applicable
 accounting standards notified u/s 211(3C) of the Companies Act, 1956
 and the relevant provisions of the Companies Act, 1956.
 
 b) Fixed Assets and Depreciation :
 
 (i) Fixed assets are stated at cost of acquisition less accumulated
 depreciation. The Company capitalises all costs relating to the
 acquisition and installation of fixed assets.
 
 (ii) Depreciation is provided based on management estimate of useful
 lives of the fixed assets, on the straight line method prorata to the
 period of use or at the rates prescribed in Schedule XIV of the
 Companies Act, 1956, whichever is higher. The management has estimated
 the useful life of Plant & Machinery to be 12 years (lower useful life
 than that prescribed by Schedule XIV of the Companies Act, 1956).
 
 (iii) Fixed Assets individually costing Rs. 5,000 or less are fully
 depreciated in the year of acquisition.
 
 (iv) Leasehold Improvements are amortised over the period of lease.
 
 c) Investments :
 
 (i) Long term investments (including joint ventures) are stated at
 cost, except where there is a diminution in value other than temporary,
 in which case requisite provision is made to write down the carrying
 value to recognise such decline.
 
 (ii) Current investments are stated at cost or fair value, whichever is
 lower.
 
 d) Inventories :
 
 (i) The Company amortises 60% of the cost of movie rights acquired or
 produced by it, on first theatrical release of the movie. The said
 amortisation pertaining to Domestic Theatrical Rights, International
 Theatrical Rights, Television Rights, Music Rights, Video Rights and
 others is made proportionately based on Management estimate of revenues
 from each of these rights. In case the aforesaid rights are not
 exploited along with or prior to the first theatrical release,
 proportionate cost of the said right is carried forward to be written
 off as and when such right is commercially exploited or at the end of
 one year from the date of first theatrical release, which ever occurs
 earlier.
 
 (ii) Balance 40% is amortised over the balance license period or based
 on management estimate of future revenue potential, as the case may be.
 
 (iii) Acquired rights pertaining to movies, animation & other content,
 are amortised on the exploitation of such rights based on the
 management estimates of revenue potential.
 
 (iv) Projects in progress and Movies under Production are stated at
 cost. Cost comprises of material cost, cost of services, other expenses
 and advances paid. Costs get accumulated till the first theatrical
 release of the movie.
 
 (v) Pilot episodes are stated at cost. Pilots are written off at the
 end of 3 years from the year of production of respective pilot, in case
 the same is not developed into a serial.  Raw Stock, Digital Video
 Discs/Compact Discs stock and unutilised Free Commercial Time are
 stated at lower of cost or net realisable value.
 
 (vi) The borrowing cost directly attributable to a movie is capitalised
 as part of the cost of movie. In case of general borrowings, borrowing
 cost eligible for capitalisation for movie projects is deter mined by
 applying a weighted average capitalisation rate to the expenditure on
 that movie.  
 
 (vii) The Company evaluates the realisable value and/or revenue
 potential of inventory on an annual basis based on market conditions
 and future demand and appropriate write down is made in cases where
 accelerated write down is warranted.
 
 e) Current Taxation :
 
 Provision for Current tax (including Wealth Tax) has been made in
 accordance with the Income tax and Wealth tax laws prevailing for the
 year.
 
 f) Deferred Taxation :
 
 Deferred tax is recognised, subject to the consideration of prudence,
 on timing differences, being the difference between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred tax assets are not
 recognised on unabsorbed depreciation and carry forward of losses
 unless there is virtual certainty that sufficient future taxable income
 will be available against which such deferred tax assets can be
 realised.
 
 g) Foreign Currency Transactions :
 
 The transactions in foreign exchange are accounted at the exchange rate
 prevailing on the date of transaction.  Monetary assets and liabilities
 as at the Balance sheet date are translated at the rate of exchange
 prevailing at the date of the Balance sheet.
 
 Non-monetary foreign currency items are carried at cost. Gains and
 losses resulting from the settlement of such transactions and from the
 translation of monetary assets and liabilities denominated in foreign
 currencies are recognised in the Profit and Loss Account. Premium or
 discount in respect of forward contract is accounted over the period of
 the contract.
 
 h) Revenue Recognition :
 
 (i) Revenues on commissioned television programmes, animation
 programmes and dubbing are recognised on delivery. The amount
 recognised is the predetermined price, the collection of which is
 reasonably assured.
 
 (ii) Revenues from sale of airtime (net of agency commission) are
 recognised when the related advertisements or commercials appears
 before the public, i.e. on telecast.
 
 (iii) Revenues from licensing and distribution of television programmes
 and movies are recognised in accordance with the licensing and
 distribution agreement or on physical delivery of the programmes /
 movies, whichever is later. Home Video sales are recognised as per
 underlying agreements based on delivery.
 
 (iv) Dividend is recognised when the right to receive the dividend is
 unconditionally established at the Balance Sheet date.
 
 i) Retirement Benefits :
 
 (i) Long Term Employee Benefits :
 
 In case of Defined Contribution plans, the Companys contributions to
 these plans are charged to the Profit and Loss Account as incurred.
 Liability for Defined Benefit plans is provided on the basis of
 valuations, as at the Balance Sheet date, carried out by an independent
 actuary. The actuarial valuation method used for measuring the
 liability is the Projected Unit Credit method.  The obligations are
 measured as the present value of estimated future cash flows discounted
 at rates and reflecting the prevailing market yields of Indian
 Government securities as at the Balance Sheet date for the estimated
 term of the obligations. The estimate of future salary increase
 considered takes into account the inflation, seniority, promotion and
 other relevant factors. The expected rate of return of plan assets is
 taken at the rate of return on Government securities. Plan assets are
 measured at fair value as at the Balance Sheet date.
 
 (ii) Actuarial gains and losses comprise experience adjustments and the
 effects of changes in actuarial assumptions and are recognised in the
 Profit and Loss Account in the year in which they arise.
 
 j) Borrowing Costs :
 
 Borrowing costs that are attributable to the acquisition and
 construction of a qualifying asset are capitalised as a part of the
 cost of the asset. Other borrowing costs are recognised as an expense
 in the year in which they are incurred.
 
 k) Lease :
 
 Finance Leases
 
 Assets acquired under finance lease are recognised as assets with
 corresponding liabilities in the Balance Sheet at the inception of the
 lease at amounts equal to lower of the fair value of the leased asset
 or at the present value of the minimum lease payments.
 
 These leased assets are depreciated in line with the Companys policy
 on depreciation of fixed assets.  The interest is allocated to periods
 during the lease term so as to produce a constant periodic rate of
 interest on the remaining balance of the liability for each period.
 
 Operating Leases
 
 Lease payments for operating leases are recognised as expense on a
 straight-line basis over the lease term. Initial direct costs are
 recognised immediately as an expense.
 
 l) Impairment of Assets :
 
 The Company assesses at each balance sheet date whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount of the asset. If
 such recoverable amount of the asset or the recoverable amount of the
 cash generating unit to which the asset belongs 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
 recognised in the Profit & 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 asset is
 reflected at the recoverable amount.
 
 m) Employee Stock Option Schemes (ESOP) :
 
 The Company accounts for compensation expense under the Employee Stock
 Option Schemes using the
 
 intrinsic value method as permitted by the Guidance Note on Accounting
 for Employee Share-based Payments issued by the Institute of Chartered
 Accountants of India.
 
 The difference between the market price and the exercise price as at
 the date of the grant is treated as compensation expense and charged
 over the vesting period.
 
 n) Earnings Per Share :
 
 Basic earnings per share are computed by dividing the net profit after
 tax by the weighted average number of equity shares outstanding during
 the period. Diluted earnings per share is computed by dividing the net
 profit after tax by the weighted average number of equity shares
 considered for deriving basic earnings per share and also the weighted
 average number of equity shares that could have been issued upon
 conversion of all dilutive potential equity shares.
 
 The dilutive potential equity shares are adjusted for the proceeds
 receivable had the shares been actually issued at fair value, which is
 the average market value of the outstanding shares. Dilutive potential
 equity shares are deemed converted at the beginning of the period,
 unless issued at a later date.
 
 o) Provisions and Contingent Liabilities :
 
 The Company recognises a provision when there is a present obligation
 as a result of a past event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of the
 obligation.
 
 A disclosure for a contingent liability is made when there is a
 possible obligation or a present obligation that may, but probably will
 not, require an outflow of resources. Where there is a possible
 obligation or a present obligation that the likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 
 p) Use of Estimates :
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities and
 disclosure of contingent liabilities on the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting period.
 
 Differences between actual results and estimates are recognised in the
 periods in which the results are known/materialise.