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Accounting Policies of BAG Films & Media Ltd. Company
Mar 31, 2025
2.4 Significant Accounting Policies
The significant accounting policies used in preparation
of the standalone financial statements have been
included in the relevant notes to the standalone financial
statements.
(a) Revenue Recognition
Ind AS 115 ''Revenue from Contracts with Customers''
The Companies (Indian Accounting Standards)
Amendment Rules, 2018 issued by the Ministry of
Corporate Affairs (MCA) notified Ind AS 115"Revenue from
Contracts with Customers" related to revenue recognition
which replaces all existing revenue recognition standards
and provide a single, comprehensive model for all
contracts with customers. The revised standard contains
principles to determine the measurement of revenue and
timing of when it is recognised.
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. Revenue is
measured at the fair value of the consideration received
or receivable All revenues are accounted on accrual basis
except to the extent stated otherwise.
Revenue is measured based on the transaction price,
which is the consideration, adjusted for volume
discounts, service level credits, performance bonuses,
price concessions and incentives, if any, as specified in the
contract with the customer. Revenue also excludes taxes
collected from customers.
Unearned and deferred revenue ("contract liability") is
recognised when there is billings in excess of revenues.
In accordance with Ind AS 37, the Company recognises an
onerous contract provision when the unavoidable costs
of meeting the obligations under a contract exceed the
economic benefits to be received.
Contracts are subject to modification to account for
changes in contract specification and requirements.
The Company reviews modification to contract in
conjunction with the original contract, basis which the
transaction price could be allocated to a new performance
obligation, or transaction price of an existing obligation
could undergo a change. In the event transaction price is
revised for existing obligation a cumulative adjustment is
accounted for. The Company disaggregates revenue from
contracts with customers by geography and nature of
services.
¦ Revenue generated from the commissioned
television programs and Internet series produced for
broadcasters is recognized over the period of time
over the contract period.
¦ Rent income is recognised on accrual basis as per the
agreed terms on straight line basis.
¦ Sale of Rights are recognised in accordance with the
terms of agreements with customers.
¦ Revenue from other services is recognised as and
when such services are completed / performed.
¦ Income from infrastructure support, building rent
and royalty income is recognised based on the terms
of the underlying agreement.
¦ Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate (EIR) applicable.
¦ Revenue from subsidiaries is recognised based on
transaction price which is at arm''s length.
¦ Dividend income on investments is recognised when
the right to receive dividend is established.
The transaction price, being the amount to which the
Company expects to be entitled and has rights to under
the contract is allocated to the identified performance
obligations. The transaction price will also include
an estimate of any variable consideration where the
Company''s performance may result in additional
revenues based on the achievement of agreed targets.
The Company does not expect to have any contracts
where the period between the transfer of the promised
goods or services to the customer and payment by the
customer exceeds one year. As a consequence, the group
does not adjust any of the transaction prices for the time
value of money.
(b) Leases
The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
Company as a Lessee
The Company''s lease asset classes primarily comprise
of lease for land and building. The Company assesses
whether a contract contains a lease, at inception of a
contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To
assess whether a contract conveys the right to control the
use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic
benefits from use of the asset through the period of the
lease and (iii) the Company has the right to direct the use
of the asset. The Company applies a single recognition
and measurement approach for all leases, except for
short-term leases and leases of low-value assets. For
these short-term and low value leases, the Company
recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right
to use the underlying assets as below:
i) Right-of-use Assets
The right-of-use assets are initially recognised at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses, if any. Right-of-use assets are
depreciated from the commencement date on a straight¬
line basis over the shorter of the lease term and useful life
of the underlying asset.
ii) Lease Liabilities
The lease liability is initially measured at the present
value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease
or, if not readily determinable, using the incremental
borrowing rates. The lease liability is subsequently
remeasured by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying
amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrence
of certain events such as a change in the lease term or
a change in an index or rate used to determine lease
payments. The remeasurement normally also adjusts the
leased assets.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.
Company as a Lessor
Leases for which the Company is a lessor is classified as
finance or operating lease. Leases in which the Company
does not transfer substantially all the risks and rewards
incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted for
on a straight-line basis over the lease terms. Initial direct
costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased
asset and recognised over the lease term on the same
basis as rental income. Contingent rents are recognised
as revenue in the period in which they are earned.
[c> Property, Plant and Equipment
Property, plant and equipment are stated at costs less
accumulated depreciation (other than freehold land)
and impairment loss, if any. The cost includes purchase
price net of any trade discounts and rebates, any import
duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly
attributable expenditure on making the asset ready for
its intended use, other incidental expenses and interest
on borrowings attributable to acquisition of qualifying
fixed assets up to the date the asset is ready for its
intended use. Subsequent expenditure on fixed assets
after its purchase / completion is capitalised only if such
expenditure results in an increase in the future benefits
from such asset beyond its previously assessed standard
of performance.
Depreciation is provided for property, plant and
equipment on pro-rata basis over the estimated useful life
from the date the assets are ready for intended use. The
estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis.
The carrying amount of an item of property, plant and
equipment shall be derecognised on disposal or when
no future economic benefits are expected from its use or
disposal. Gains or losses arising on retirement or disposal
of property, plant and equipment are recognised in the
standalone statement of profit and loss.
The Management believes that the useful lives best
represents the period over which the management
expects to use these assets based on an internal
assessment and technical evaluation where necessary.
Capital work-in-progress:
Amount paid towards the acquisition of property, plant
and equipment outstanding as of each reporting date
and the cost of property, plant and equipment not ready
for intended use before such date are disclosed under
capital work-in-progress. The capital work- in-progress is
carried at cost, comprising direct cost, related incidental
expenses and attributable interest.
Depreciation is not recorded on capital work-in-progress
until construction and installation are complete and the
asset is ready for its intended use.
Impairment
Property, plant and equipment are evaluated for
recoverability whenever events or changes in
circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of impairment
testing, the recoverable amount (i.e. the higher of the fair
value less cost to sell and the value-in-use) is determined
on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those
from other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit (CGU) to
which the asset belongs.
If such assets are considered to be impaired, the
impairment to be recognized in the Statement of Profit
and Loss is measured by the amount by which the carrying
value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed in the
Statement of Profit and Loss if there has been a change in
the estimates used to determine the recoverable amount.
The carrying amount of the asset is increased to its
revised recoverable amount, provided that this amount
does not exceed the carrying amount that would have
been determined (net of any accumulated depreciation)
had no impairment loss been recognized for the asset in
prior years.
(d> Financial Instruments
Financial assets and liabilities are recognised when the
Company becomes a party to the contractual provisions
of the instrument. Financial assets and liabilities are
initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss)
are added to or deducted from the fair value measured on
initial recognition of financial asset or financial liability.
Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with
banks. Cash equivalents are short- term balances (with an
original maturity of three months or less from the date
of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised
cost if these financial assets are held within a business
whose objective is to hold these assets in order to collect
contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the
principal amount outstanding.
Financial Assets at Fair Value through other
Comprehensive Income
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held
within a business whose objective is achieved by both
collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset
gives rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial Assets at Fair Value through Profit or Loss
Financial assets are measured at fair value through profit
or loss unless it is measured at amortised cost or at fair
value through other comprehensive income on initial
recognition. The transaction costs directly attributable
to the acquisition of financial assets and liabilities at fair
value through profit or loss are immediately recognised
in profit or loss.
Financial Liabilities at Fair Value through Profit or
Loss
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL
if it is classified as held for trading, or it is a derivative or
it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains
and losses, including any interest expense, are recognised
in profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest
method. Interest expense and foreign exchange gains
and losses are recognised in profit or loss. Any gain or loss
on derecognition is also recognised in profit or loss.
Derecognition
Financial Assets
The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial asset
expire, or it transfers the rights to receive the contractual
cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are
transferred or in which the Company neither transfers
nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial
asset. If the Company enters into transactions whereby
it transfers assets recognised on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred assets
are not derecognized.
Financial Liabilities
The Company derecognises a financial liability when
its contractual obligations are discharged or cancelled,
or expire. The Company also derecognises a financial
liability when its terms are modified and the cash flows
under the modified terms are substantially different. In
this case, a new financial liability based on the modified
terms is recognised at fair value. The difference between
the carrying amount of the financial liability extinguished
and the new financial liability with modified terms is
recognised in profit or loss.
Impairment of Financial Assets (other than at Fair
Value)
The Company assesses at each date of balance sheet
whether a financial asset or a group of financial assets
is impaired. Ind AS 109 requires expected credit losses
to be measured through a loss allowance. The Company
recognises lifetime expected losses for all contract assets
and / or all trade receivables that do not constitute
a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal
to the 12 month expected credit losses or at an amount
equal to the life time expected credit losses if the credit
risk on the financial asset has increased significantly since
initial recognition.
(e) Investments in Subsidiaries:
Investments in Subsidiaries are carried at cost less
accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of
the investment is assessed and written down immediately
to its recoverable amount. On disposal of investments in
subsidiaries, associates and joint venture, the difference
between net disposal proceeds and the carrying amounts
are recognised in the Statement of Profit and Loss.
(f) Inventories:
Inventories are valued at the lower of cost and net
realisable value. Cost is computed on a weighted average
basis.
Cost of raw materials and stores and spares includes
cost of purchase and other costs incurred in bringing
the inventories to their present location and condition.
The this items are valued at net realisable value if the
finished products in which they are to be incorporated
are expected to be sold at a loss.
Cost of finished goods and work-in-progress include
all costs of purchases, conversion costs and other costs
incurred in bringing the inventories to their present
location and condition. The net realisable value is the
estimated selling price in the ordinary course of business
less the estimated costs of completion and estimated
costs necessary to make the sale.
(g) Cash and Cash Equivalents:
The Company considers all highly liquid investments,
which are readily convertible into known amounts of
cash that are subject to an insignificant risk of change in
value, to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted for
withdrawal and usage.
Mar 31, 2024
2.4 Significant Accounting Policies
The significant accounting policies used in preparation of the standalone financial statements have been included in the relevant notes to the standalone financial statements.
(a) Revenue Recognition
Ind AS 115 ''Revenue from Contracts with Customers''
The Companies (Indian Accounting Standards) Amendment Rules, 2018 issued by the Ministry of Corporate Affairs (MCA) notified Ind AS 115"Revenue from Contracts with Customers" related to revenue recognition which replaces all existing revenue recognition standards and provide a single, comprehensive model for all contracts with customers. The revised standard contains principles to determine the measurement of revenue and timing of when it is recognised.
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. Revenue is measured at the fair value of the consideration received or receivable All revenues are accounted on accrual basis except to the extent stated otherwise.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Unearned and deferred revenue ("contract liability") is recognised when there is billings in excess of revenues.
In accordance with Ind AS 37, the Company recognises an
onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.
Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation a cumulative adjustment is accounted for. The Company disaggregates revenue from contracts with customers by geography and nature of services.
¦ Revenue generated from the commissioned television programs and Internet series produced for broadcasters is recognized over the period of time over the contract period.
¦ Rent income is recognised on accrual basis as per the agreed terms on straight line basis.
¦ Sale of Rights are recognised in accordance with the terms of agreements with customers.
¦ Revenue from other services is recognised as and when such services are completed / performed.
¦ Income from infrastructure support, building rent and royalty income is recognised based on the terms of the underlying agreement.
¦ Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable.
¦ Revenue from subsidiaries is recognised based on transaction price which is at arm''s length.
¦ Dividend income on investments is recognised when the right to receive dividend is established.
The transaction price, being the amount to which the Company expects to be entitled and has rights to under the contract is allocated to the identified performance obligations. The transaction price will also include an estimate of any variable consideration where the Company''s performance may result in additional revenues based on the achievement of agreed targets.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.
(b) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a Lessee
The Company''s lease asset classes primarily comprise of lease for land and building. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets as below:
i) Right-of-use Assets
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straightline basis over the shorter of the lease term and useful life of the underlying asset.
ii) Lease Liabilities
The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease
payments. The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Company as a Lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
(c) Property, Plant and Equipment
Property, plant and equipment are stated at costs less accumulated depreciation (other than freehold land) and impairment loss, if any. The cost includes purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Depreciation is provided for property, plant and equipment on pro-rata basis over the estimated useful life from the date the assets are ready for intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the standalone statement of profit and loss.
The Management believes that the useful lives best represents the period over which the management expects to use these assets based on an internal assessment and technical evaluation where necessary.
Capital work-in-progress:
Amount paid towards the acquisition of property, plant and equipment outstanding as of each reporting date
and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work-in-progress. The capital work- in-progress is carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Impairment
Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.
(d) Financial Instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short- term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business
whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through other Comprehensive Income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through Profit or Loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition
Financial Assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial Liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Impairment of Financial Assets (other than at Fair Value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(e) Investments in Subsidiaries, Associates and Joint Ventures:
Investments in Subsidiaries, Associates and Joint Ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, associates and joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.
(f) Inventories:
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis.
Cost of raw materials and stores and spares includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. The aforesaid items are valued at net realisable value if the finished products in which they are to be incorporated are expected to be sold at a loss.
Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present
location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
(g) Cash and Cash Equivalents:
The Company considers all highly liquid investments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Mar 31, 2023
1. COMPANY INFORMATION
The Company was incorporated on January 22, 1993. It is a Public Company domiciled in India and its shares are listed on BSE Limited [BSE] and National Stock Exchange of India Limited [NSE]. The main business of the Company is content production, distribution and allied activities. The Company provides infrastructural support for content production.
NOTE 2 BASIS OF PREPARATION, MEASUREMENT AND SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation and Measurement
(a) Basis of preparation
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
The standalone financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013.
An asset is treated as current when it is
> Expected to be realised or intended to be sold or consumed in normal operating cycle:
> Held primarily for the purpose of trading;
> Expected to be realised within twelve months after the reporting period; or
> Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is treated as current when
> It is expected to be settled in normal operating cycle;
> It is held primarily for the purpose of trading;
> It is due to be settled within twelve months after the reporting period; or
> There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and deferred tax liabilities are classified as non- current assets and liabilities
Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
The standalone financial statements are presented in Indian National Rupee (INR), the functional currency of the Company. Items included in the standalone financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the ''functional currency''). Foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction. Foreign exchange gains and losses from settlement of these transactions are recognised in the standalone statement of profit and loss. Foreign currency denominated monetary assets and liabilities are translated into functional currency at exchange rates in effect at the balance sheet date, the gain or loss arising from such translations are recognised in the standalone statement of profit and loss.
All amounts included in the financial statements are reported in lakhs of Indian rupees except share and per share data, unless otherwise stated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.
The standalone financial statements of the Company for the year ended 31 March, 2023 were approved by the Board of Directors on 29 May, 2023.
(b) Basis of measurement
These financial statements are prepared under the historical cost convention unless otherwise indicated.
The accounting policies adopted are the same as those which were applied for the previous financial year.
2.2 Key Accounting Estimates and Judgements
The preparation of the standalone financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively.
The Company uses the following critical accounting estimates in preparation of its standalone financial statements:
Impairment of Investments in Subsidiaries
The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss.
Useful lives of Property, Plant and Equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Valuation of Deferred Tax Assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period.
Fair Value Measurement of Financial Instruments
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Provisions and Contingent Liabilities
A provision is recognised when the Company has a present obligation as a result of past event and 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 (excluding retirement benefits and compensated absences) 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. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.
2.3 New and amended standards adopted by the Company
The Ministry of Corporate Affairs had vide notification dated March 23, 2022 notified Companies (Indian
Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective April 1,2022. These amendments did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
New and amended standards issued but not effective
The Ministry of Corporate Affairs has vide notification dated March 31, 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the ''Rules'') which amends certain accounting standards, and are effective April 1 2023.
The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.
These amendments are not expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions. Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12 as the companies accounting policy already complies with the now mandatory treatment
2.4 Significant Accounting Policies
The significant accounting policies used in preparation of the standalone financial statements have been included in the relevant notes to the standalone financial statements.
(a) Revenue Recognition
Ind AS 115 ''Revenue from Contracts with Customers''
The Companies (Indian Accounting Standards) Amendment Rules, 2018 issued by the Ministry of Corporate Affairs (MCA) notified Ind AS 115"Revenue from Contracts with Customers" related to revenue recognition which replaces all existing revenue recognition standards and provide a single, comprehensive model for all contracts with customers. The revised standard contains principles to determine the measurement of revenue and timing of when it is recognised.
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. Revenue is measured at the fair value of the consideration received or receivable All revenues are accounted on accrual basis except to the extent stated otherwise.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Unearned and deferred revenue ("contract liability") is recognised when there is billings in excess of revenues.
In accordance with Ind AS 37, the Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.
Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation a cumulative adjustment is accounted for. The Company disaggregates revenue from contracts with customers by geography and nature of services.
¦ Revenue generated from the commissioned television programs and Internet series produced for broadcasters is recognized over the period of time over the contract period.
¦ Rent income is recognised on accrual basis as per the agreed terms on straight line basis.
¦ Sale of Rights are recognised in accordance with the terms of agreements with customers.
¦ Revenue from other services is recognised as and when such services are completed / performed.
¦ Income from infrastructure support, building rent and royalty income is recognised based on the terms of the underlying agreement.
¦ Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate (EIR) applicable.
¦ Revenue from subsidiaries is recognised based on transaction price which is at arm''s length.
¦ Dividend income on investments is recognised when the right to receive dividend is established.
The transaction price, being the amount to which the Company expects to be entitled and has rights to under the contract is allocated to the identified performance obligations. The transaction price will also include an estimate of any variable consideration where the Company''s performance may result in additional revenues based on the achievement of agreed targets.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.
(b) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a Lessee
The Company''s lease asset classes primarily comprise of lease for land and building. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets as below:
i) Right-of-use Assets
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straightline basis over the shorter of the lease term and useful life of the underlying asset.
ii) Lease Liabilities
The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying
amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Company as a Lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
(c) Property, Plant and Equipment
Property, plant and equipment are stated at costs less accumulated depreciation (other than freehold land) and impairment loss, if any. The cost includes purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Depreciation is provided for property, plant and equipment on pro-rata basis over the estimated useful life from the date the assets are ready for intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the standalone statement of profit and loss.
The Management believes that the useful lives best represents the period over which the management expects to use these assets based on an internal
assessment and technical evaluation where necessary. Capital work-in-progress:
Amount paid towards the acquisition of property, plant and equipment outstanding as of each reporting date and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work-in-progress. The capital work- in-progress is carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Impairment
Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.
(d) Financial Instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short- term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through other Comprehensive Income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through Profit or Loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition Financial Assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial Liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Impairment of Financial Assets (other than at Fair Value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(e) Investments in Subsidiaries, Associates and Joint Ventures:
Investments in Subsidiaries, Associates and Joint Ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, associates and joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.
(f) Inventories:
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis.
Cost of raw materials and stores and spares includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. The
aforesaid items are valued at net realisable value if the finished products in which they are to be incorporated are expected to be sold at a loss.
Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
(g) Cash and Cash Equivalents:
The Company considers all highly liquid investments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
(h) Provisions and Contingent Liabilities:
The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are recognised when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the standalone financial statements.
(i) Expenditure:
Expenses are accounted on accrual basis.
(j) Employee benefits
Employee benefits include contribution to provident fund, superannuation fund, gratuity fund, compensated absences, pension and employee state insurance scheme.
Short Term Employee Benefits
Short term employee benefits including salaries and performance incentives, are charged to standalone statement of profit and loss on an undiscounted, accrual basis during the period of employment.
Defined Benefit Plans
Gratuity and Pension are defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations, being carried out at the date of each statement of financial position. The retirement benefit obligations recognised in the statement of financial position represents the present value of the defined obligations reduced by the fair value of scheme assets. Any, asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. Under a defined benefit plan, it is the Company''s obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Company.
Defined Contribution Plans
Contributions to defined contribution plans like provident fund and superannuation, funds are recognised as expense when employees have rendered services entitling them to such benefits.
Compensated absences
Compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related services are stated as undiscounted liability at the balance sheet date. Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are stated as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date.
(k) Income Taxes:
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable/ receivable on the taxable income/ loss for the year using applicable tax rates for the relevant period, and any adjustment to taxes in respect of previous years. Interest expenses and penalties, if any, related to income tax are included in finance cost and other expenses respectively. Interest Income, if any, related to Income tax is included in Other Income.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
Uncertain Tax Position
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. The provision is estimated based on one of two methods, the expected value method (the sum of the probability weighted amounts in a range of possible outcomes) or the single most likely amount method, depending on which is expected to better predict the resolution of the uncertainty.
(l) Foreign Currencies:
1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The Company''s financial statements are presented in Indian rupee (INR) which is also the Company''s functional and presentation currency.
2. Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transaction and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rate are generally recognised in the statement of profit and loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
3. Exchange Differences
Exchange differences arising on settlement or translation of monetary items are recognized as income or expense in the period in which they arise with the exception of exchange differences on gain or loss arising on translation of non-monetary items measured at fair value which is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).
(m) Earnings Per Share:
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity 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 equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
(n) Borrowings and Borrowing Costs
Borrowing cost includes interest and other costs incurred in connection with the borrowing of funds and charged to Statement of Profit & Loss on the basis of effective interest rate (EIR) method. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are recognized as expense in the period in which they occur.
(o) Dividend Distributions
The Company recognizes a liability to make the payment of dividend to owners of equity, when the distribution is authorised and the distribution is no longer at the
discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
(p) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of directors monitors the operating results of all product segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the financial statements.
The operating segments have been identified on the basis of the nature of products/services. Further:
1. Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter - segment revenue.
2. Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under unallocable expenditure.
3. Income which relates to the Company as a whole and not allocable to segments is included in unallocable income.
4. Segment results includes margins on intersegment sales which are reduced in arriving at the profit before tax of the Company.
5. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.
6. Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated business.
(q) Fair Value Measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
(i) In the principal market for asset or liability, or
(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non- financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1- Quoted(unadjusted) market prices in active markets for identical assets or liabilities
Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization ( based on the lowest level input that is significant to fair value measurement as a whole ) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Mar 31, 2018
(b) Basis of measurement
These financial statements are prepared under the historical cost convention unless otherwise indicated.
2.2 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and reported amounts of assets, liabilities, income, expenses etc. at the date of these financial statements and reported amount of revenues and expenses for the year presented.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisons to accounting estimates are recognized in the period in which the estimate is revised and future periods affected.
2.3 SIGNIFICANT ACCOUNTING POLICIES
(a) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current and non-current classification.
Assets
An asset is classified as current when it satisfies any of the following criteria:
- Expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;
- Held primarily for the purpose of being traded;
- Expected to be realized within twelve months after the reporting period; or
- Cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
Current assets include the current portion of noncurrent financial assets. All other assets are classified as non-current.
to the financial statements for the year ended 31st
March, 2018
1. CORPORATE INFORMATION
The Company was incorporated on January 22, 1993. It is a Public Limited Company domiciled in India and is Listed on the BSE Limited [BSE] and National Stock Exchange of India Limited [NSE]. It is one of the largest television content house in India.
2. BASIS OF PREPARATION, MEASUREMENT AND SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION AND MEASUREMENT
(a) Basis of preparation
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
These financial statements for the year ended 31st March, 2018 are the first the Company has prepared under Ind AS. For all periods upto and including the year ended 31st March, 2017 , the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as ''Previous GAAP'') used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended 31st March, 2017 and the opening Balance Sheet as at 1st April, 2016 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company''s Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in note 3.
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the ''date of transition to Ind AS''.
Property, plant and equipment under construction and fixed assets acquired but not put to use at the balance sheet date are classified as capital work in progress.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Depreciation
Based on a technical assessment and a review of past history of asset usage, management of the Company has not revised its useful lives to those referred to under Schedule II to the Companies Act, 2013 (as amended).
Depreciation on property, plant and equipment is provided on written down value method, using the rates arrived at based on the useful lives estimated by the management.
Assets costing 5,000 or less are fully depreciated in the year of purchase.
(c) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Unit''s (''CGU'') fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or cash generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value cost of disposal, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses are recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
- it is expected to be settled in the Company''s normal operating cycle;
- it is held primarily for the purpose of being traded;
- it is due to be settled within twelve months after the reporting date; or
- the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.
The Company has identified twelve months as its operating cycle.
(b) Property, plant and equipment and Depreciation
The Company has elected to continue with the carrying value for all of its property, plant and equipment as recognized in its Indian GAAP financial statements as deemed cost at the transition date, viz., April 1, 2016.
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price ( including all duties and taxes after deducting trade discounts and rebates if any ) and any attributable cost of bringing the asset to its working condition for its intended use. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. Likewise, when a major expenditure is incurred, its cost is recognized in the carrying amount of the plant and equipment, if it increases the future benefits from the existing asset. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure, are charged to the statement of profit and loss for the period during which such expenses are incurred. of interest and other costs that an entity incurs in connection with the borrowing of funds.
(g) Foreign Currency Transactions
Items included in the financial statements are measured using currency of primary economic environment in which the Company operates ("the functional currency"). The financial statements are presented in Indian rupees (INR), the functional currency of the Company.
Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are translated using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value denominated in a foreign currency are translated using the exchange rates that existed when the values were determined.
Exchange differences
All exchange differences arising on settlement / conversion of foreign currency monetary items are included in the statement of profit and loss.
(h) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
- The principal or the most advantageous market must be accessible by the Company
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company''s CGUs to which the individual assets are allocated.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss.
(d) Inventories
Inventories of raw stock consists of tapes, cassettes, compact discs and other electronic devices which are valued at lower of cost or estimated net realizable value.
Costs include the cost incurred in bringing each product to its present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Cost of goods is determined on a FIFO basis.
Appropriate adjustments are made to the carrying value of damaged, slow moving and obsolete inventories based on management''s current best estimate.
(e) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit and (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
(f) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist
(i) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Financial assets are subsequently classified as measured at
- mortised cost
- fair value through profit and loss (FVTPL)
- fair value through other comprehensive income (FVTOCI)
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
For the impairment policy on financial assets measured at amortized cost.
Debt instruments at amortized cost
A debt instrument'' is measured at the amortized cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For recurring and non-recurring fair value measurements categorized within Level 3 of the fair value hierarchy, mention a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures and analyses changes in fair value measurements from period to period).
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in Note No. 26.7 & 26.8of the Standalone financial statements. on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and loss account. The Company does not have any financial asset under this category.
In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, the Company doesn''t have any debt instruments that qualify for FVTOCI classification.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. However there are no such instruments that have been classified through FVTOCI and all equity instruments are routed through FVTPL.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
Equity investment in Subsidiary and Joint Venture
Equity investment in Subsidiary and Joint Venture Investment in subsidiary and joint venture is carried at cost in the separate financial statements as permitted under Ind AS 27.
Impairment of Financial Asset
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortized cost e.g. debt securities, deposits, trade receivables and bank balance
- Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
The Company follows ''simplified approach âfor recognition of impairment loss allowance on Trade receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(j) Provisions and Contingent Liabilities:
Provisions
A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. The expense relating to a provision is presented in the statement of profit and loss.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
(k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
- In respect of Commissioned programmes, revenue is recognized as and when the relevant Software
the statement of profit and loss (P&L). This amount is reflected under the head ''other expenses'' in the P&L. The balance sheet presentation for various financial instruments is described below:
- Financial assets measured as at amortized cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company''s balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
Initial recognition measurement
The Company''s financial liabilities include deposits, trade and other payables. These are recognized initially at amortized cost net of directly attributable transaction costs.
Subsequent measurement
After initial recognition, they are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
The EIR amortization is included as finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.
(n) Earning per share (EPS)
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 number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split and reverse share split that have changed the number of equity shares outstanding, without a corresponding change in resources.
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.
(o) Segment reporting
Based on internal reporting provided to the Chief operating decision maker(CODM) as defined in IND AS 108, the Company''s operations predominantly related to audio-video production, movies and leasing of property & broadcasting equipmentâs. The management committee reviews and monitors the operating results of the business segment for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.
programme is delivered to the customers. Production expenses are net of recoveries, if any.
- Rental income arising from operating leases on equipment is accounted for based on the terms of the agreements and is included in other operating income in the statement of profit or loss.
- Sale of Rights are recognized in accordance with the terms of agreements with customers.
- Income from infrastructure support, building rent and royalty income is recognized based on the terms of the underlying agreement.
- Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
(l) Expenditure:
Expenses are accounted on accrual basis.
(m) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes the contribution payable to the provident fund scheme as an expenditure when the employee renders the related service.
Gratuity liability is a defined benefit obligation. The cost of providing benefits under the plan is determined on the basis of actuarial valuation at each year-end using the projected unit credit method.
Remeasurement, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (''OCI'') in the period in which they occur.
Remeasurement is not reclassified to profit or loss in subsequent periods.
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences could be utilized.
- Minimum alternate tax
Minimum alternate tax (''MAT'') paid in a year is charged to the statement of profit and loss as current tax. The Group recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Group will pay normal income tax during the specified period,
i.e., the period for which MAT credit is allowed to be carried forward. The said asset is recognized as "MAT Credit Entitlement" as deferred tax asset, and is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement."
Mar 31, 2015
1.1 Basis of accounting and preparation of financial statements
These financial statements have been prepared under the historical cost
convention on a going concern basis, on the accrual basis of accounting
in accordance with the Generally Accepted Accounting Principles (GAAP)
in India. Indian GAAP comprises mandatory accounting standards as
specified under the section 133 of the Companies Act, 2013 read with
Rule 7 of Companies (Accounts) Rules, 2014 and other accounting
pronouncements of the Institute of Chartered Accountants of India.
1.2 Use of Estimates
The preparation of the financial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
1.3 CurrentÂnon-current classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the
following criteria:
(a) it is expected to be realised in, or is intended for sale or
consumption in, the Company's normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realised within 12 months after the reporting
date; or
(d) it is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non- current financial
assets. All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the
following criteria:
(a) it is expected to be settled in the Company's normal operating
cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date;
or
(d) the Company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
Current liabilities include current portion of non-current financial
liabilities. All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents.
1.4 Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is first exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-of on first telecast or on after the review of
realisability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) Â at actual unamortized cost or net
realizable value whichever is lower.
The company amortizes 75% of the cost of movie rights acquired or
produced by it, on the first theatrical release of the movie. The said
amortization is made proportionately on Domestic Theatrical Rights,
International Theatrical Rights and Video Rights based on Management
estimate of revenues from each of these rights. In case of aforesaid
rights are not exploited along with or prior to the first theatrical
release, proportionate appropriated cost of the said right is carried
forward to be written of as and when such right is commercially
exploited or at the end of one year from the date of first theatrical
release, whichever occurs earlier. Balance 25% is amortised over the
balance license period or based on management estimate of future
revenue potential, as the case may be. Thus inventory comprises of
unamortized cost of such movie rights.
Appropriate adjustments are made to the carrying value of damaged, slow
moving and obsolete inventories based on management's current best
estimate.
1. 5 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk
of changes in value.
1.6 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.7 Depreciation
Depreciation on fixed asset is provided on Written down Value method at
the rates and in the manner prescribed in schedule II of the Companies
Act, 2013.
1.8 Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
Sale of Rights recognized as revenue as per the terms of the lease
agreement.
Royalty income is recognised based on the terms of the underlying
agreement.
In all other cases, revenue is recognized when no significant
uncertainty as to its determination or realization exists.
1.9 Other Income
Interest income is recognised using the time proportion method, based
on the transactional interest rates..
Dividend income is recognised when the right to receive payment is
established.
1.10 Fixed Assets & Capital Work-in-Progress
Tangible fixed assets
The Fixed assets are stated at cost less accumulated depreciation and
impairment. The cost of fixed assets includes interest on borrowings
attributable to acquisition of qualifying fixed assets up to the date
the asset is ready for its intended use and other incidental expenses
incurred up to that date. Cost includes capital cost, freight,
installation cost, duties and taxes and other incidental expenses
incurred during the construction/ installation and attributable to
bringing the asset to its intended use. Fixed assets are further
adjusted by the amount of CENVAT credit available, wherever applicable.
Subsequent expenditure relating to fixed assets is capitalized only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Depreciation on fixed assets is provided as per WDV basis, based on the
rates as per useful life prescribed in Schedule II to the Companies
Act, 2013.
Depreciation is provided on a pro-rata basis i.e. from the date on
which asset is ready for use.
Depreciation for the year is recognised in the Statement of Profit and
Loss.
A fixed asset is eliminated from the financial statements on disposal
or when no further benefit is expected from its use and disposal.
Losses arising from retirement or gains or losses arising from disposal
of fixed assets which are carried at cost are recognized in the
Statement of Profit and Loss.
Capital work-in-progress
Capital work in progress comprises of cost of fixed assets that are not
yet ready for their intended use and outstanding advances paid to
acquire fixed assets, at the balance sheet date.
1.11 Intangible Fixed Assets
The Intangible assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/ installation and attributable to bringing the asset to
its intended use. Fixed assets are further adjusted by the amount of
CENVAT credit available, wherever applicable.
Subsequent expenditure is capitalised only when it increases the future
economic benefits from the specific asset to which it relates.
An intangible asset is derecognized on disposal or when no future
economic benefits are expected from its use and disposal.
Losses arising from retirement and gains or losses arising from
disposal of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are
recognised in the Statement of Profit and Loss.
1.12 Foreign Currency Transactions
a) Transactions in foreign currency are recorded at the rates of
exchange in force at the time the transactions are effected. All
monetary assets and liabilities denominated in foreign currency are
restated at the year-end exchange rate. All nonmonetary assets and
liabilities are stated at the rates prevailing on the dates of the
transactions. Gains / (losses) arising out of fluctuations in the
exchange rates are recognised as income / expense in the period in
which they arise
b) In the cases of exchange difference on reporting long term monetary
items, the company has opted to avail the option provided under
paragraph 46A of Accounting Standard 11 "The Effects of Changes in
Foreign Exchange Rates" inserted vide notification dated 29 December
2011. Consequently, the exchange differences arising on reporting of
long term foreign currency monetary items on account of a depreciable
asset is adjusted in the cost of depreciable asset and would be
depreciated over the balance life of the asset.
In cases other than the depreciable assets exchange differences is
accumulated in a Foreign Currency Monetary Item Translation Difference
Account, and amortized over the balance period of such long term asset
or liability.
c) Investments in foreign entities are recorded at the exchange rate
prevailing on the date of making the investments.
d) The Company does not have any outstanding foreign exchange forward
contracts or other derivative instruments for the purpose of hedging
the risk associated with foreign exchange exposures as at the year end.
1.13 Investments
Non Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
1.14 Employee Benefits
The company has contributed to employee's provident fund as per
provisions of the Employee's Provident Fund Act, 1952 and is charged to
Statement of Profit and Loss.
The company has contributed to employee's state insurance fund as per
provisions of the ESI Act, 1948 and is charged to Statement of Profit
and Loss.
As per the Company's policy, the gratuity is payable as per the
provisions of the payment of Gratuity Act. Liability in respect of
Gratuity is provided for on the basis of an actuarial valuation as at
the date of Balance Sheet.
Bonus is paid and charged to Statement of Profit and Loss as per the
provisions of "The Payment of Bonus Act, 1965".
1.15 Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when first put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.16 Segmental Reporting
Primary segments: The company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property &
broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifiable expenses are accounted for directly in respective
segments. Overheads are apportioned pro- rata on revenues.
1.17 Operating Lease
The Company has given broadcasting equipments under operating leases.
These lease agreements are normally renewable on expiry. The rental
income on operating leases is credited to Statement of Profit and Loss.
1.18 Earnings per Share (EPS)
The Company reports Basic Earning per equity share in accordance with
the Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic Earnings per equity share has been
computed by dividing the net profit after tax by the weighted average
number of equity shares outstanding during the year.
The number of shares used in computing the diluted earning per share
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.19 Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period).
Income-tax expense is recognised in Statement of Profit or Loss except
that tax expense related to items recognised directly in reserves is
also recognized in those reserves.
Current tax is measured at the amount expected to be paid to (recovered
from) the taxation authorities, using the applicable tax rates and tax
laws. Deferred tax is recognised in respect of timing differences
between taxable income and accounting income i.e. differences that
originate in one period and are capable of reversal in one or more
subsequent periods. The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be
realised in future; however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognised only if there is a virtual certainty supported by convincing
evidence that sufficient future taxable income will be available
against which such deferred tax assets can be realised. Deferred tax
assets are reviewed as at each balance sheet date and written down or
written-up to reflect the amount that is reasonably/virtually certain
(as the case may be) to be realised.
Minimum Alternative Tax ('MAT') under the provisions of the Income-tax
Act, 1961 is recognised as current tax in the Statement of Profit and
Loss. The credit available under the Act in respect of MAT paid is
recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the period
for which the MAT credit can be carried forward for set-of against the
normal tax liability. MAT credit recognised as an asset is reviewed at
each balance sheet date and written down to the extent, the aforesaid
convincing evidence no longer exists.
Deferred tax in respect of timing differences which reverse after the
tax holiday period is recognised in the year in which the timing
differences originate.
1.20 Impairment of Assets
The carrying values of all assets are reviewed at each reporting date
to determine if there is an indication of any impairment. If any
indication exists, the asset's recoverable amount is estimated. For
assets that are not yet available for use, the recoverable amount is
estimated at each reporting date. An impairment loss is recognized
whenever the carrying amount of an asset, or its cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in
the Statement of Profit and Loss. An impairment loss is reversed if
there is a change in the estimate used to determine the recoverable
amount. An impairment loss is reversed only to the extent the carrying
amount of the asset that does not exceed the carrying amount that would
have been determined net of depreciation or amortisation, if no
impairment loss had been recognised.
1.21 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilizing the credits.
Mar 31, 2014
A. Term loan from banks:
Term loans are secured by exclusive Charge on Land and Building at the
Film city Noida, all current assets and all other moveable fixed assets
of B.A.G. Films and Media Limited.
B. Vehicle Loans from banks:
Vehicle Loan taken from HDFC Bank and Bank of India secured by vehicle
financed by bank and repayable as per repayment schedule issued by the
Bank.
C. Security Deposit:
Security deposit received against letting out of building premises,
Studio for office use and Shooting purpose, repayment as per agreed
terms of the contract.
Disclosure in relation to default in repayment of loans and interest in
respect of the following:
A. Term loans from banks:
No default has been made in repayment of Principal and interest on term
loan during the financial year ended 31 March 2014
B. Vehicle Loans from banks:
No default has been made in repayment of Principal and interest on
Vehicle loan during the financial year ended 31 March 2014
Note-21
Corporate Information
The Company was incorporated on January 22, 1993. It is one of the
largest television content houses in India under the brand name "Studio
24".
Note - 22
Significant Accounting Policies
22.1 Basis of accounting and preparation of fnancial statements
The financial statements of the company have been prepared in accordance
with Generally Accepted Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards notified under the 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 the Mercantile System
of accounting and in accordance with the accounting standards referred
to in Section 211(3C) of the Companies Act, 1956, to the extent
applicable. The accounting policies adopted in the preparations of the
financial statements are consistent with those followed in the previous
year.
22.2 Use of Estimates
The preparation of the financial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
22.3 Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is first exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-off on first telecast or on after the review of
reliability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) Â at actual unamortized cost or net
realizable value whichever is lower.
The company amortizes 75% of the cost of movie rights acquired or
produced by it, on the first theatrical release of the movie. The said
amortization is made proportionately on Domestic Theatrical Rights,
International Theatrical Rights and Video Rights based on Management
estimate of revenues from each of these rights. In case of aforesaid
rights are not exploited along with or prior to the first theatrical
release, proportionate appropriated 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, whichever occurs earlier. Balance 25% is amortised over the
balance license period or based on management estimate of future
revenue potential, as the case may be. Thus inventory comprises of
unamortized cost of such movie rights.
22.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk
of changes in value.
22.5 Cash fowl statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non- cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based
on the available information.
22.6 Depreciation
Depreciation on fxed asset is provided on Written down Value method at
the rates and in the manner prescribed in schedule XIV of the Companies
Act, 1956.
22.7 Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Interest is recognized using time proportion method.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
Sale of Rights recognized as revenue as per the terms of the lease
agreement.
In all other cases, revenue is recognized when no significant
uncertainty as to its determination or realization exists.
22.8 Other Income
Interest income is accounted on accrual basis.
22.9 Fixed Assets & Capital Work-in-Progress
Tangible fixed assets
The Fixed assets are stated at cost less accumulated depreciation and
impairment. The cost of fixed assets includes interest on borrowings
attributable to acquisition of qualifying fixed assets up to the date
the asset is ready for its intended use and other incidental expenses
incurred up to that date. Cost includes capital cost, freight,
installation cost, duties and taxes and other incidental expenses
incurred during the construction/installation and attributable to
bringing the asset to its intended use. Fixed assets are further
adjusted by the amount of CENVAT credit available, wherever applicable.
Subsequent expenditure relating to fixed assets is capitalized only if
such expenditure results in an increase in the future benefits from such
asset beyond its previously assessed standard of performance.
Capital work-in-progress
Capital work in progress comprises of cost of fixed assets that are not
yet ready for their intended use and outstanding advances paid to
acquire fixed assets, at the balance sheet date.
22.10 Intangible Fixed Assets
The Intangible assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/installation and attributable to bringing the asset to its
intended use. Fixed assets are further adjusted by the amount of CENVAT
credit available, wherever applicable.
22.11 Foreign Currency Transactions
As per Companies (Accounting Standard) Rules 2006, exchange difference
arising on settlement or restatement of foreign currency denominated
liabilities relating to the acquisition of fixed assets, which is in
accordance with Accounting Standard-11 issued by the Institute of
Chartered Accountants of India are recognized in the Statement of Profit
& Loss account.
As per Schedule-VI of the Companies Act, 1956 exchange differences
arising on foreign currency denominated liabilities relating to the
Capital work in progress/Capital advance forms part of the Capital Work
in progress/Capital Advance.
22.12 Investments
Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
22.13 Employee Benefits
The company has contributed to employee''s provident fund as per
provisions of the Employee''s Provident Fund Act, 1952 and is charged to
Statement of Proft and Loss.
The company has contributed to employee''s state insurance fund as per
provisions of the ESI Act, 1948 and is charged to Statement of Profit
and Loss.
As per the Company''s policy, the gratuity is payable as per the
provisions of the payment of Gratuity Act. Liability in respect of
Gratuity is provided for on the basis of an actuarial valuation as at
the date of Balance Sheet.
Bonus is paid and charged to Statement of Profit and Loss as per the
provisions of "The Payment of Bonus Act, 1965".
22.14 Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when first put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
22.15 Segmental Reporting
Primary segments: The company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property &
broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifiable expenses are accounted for directly in respective segments.
Overheads are apportioned pro-rata on revenues.
22.16 Operating Lease
The Company has given broadcasting equipments under operating leases.
These lease agreements are normally renewable on expiry. The rental
income on operating leases is credited to Statement of Profit and Loss.
22.17 Earnings per Share (EPS)
The Company reports Basic Earning per equity share in accordance with
the Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic Earnings per equity share has been computed
by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the year.
The number of shares used in computing the diluted earning per share
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
22.18 Taxation
Tax expenses for the period comprises of both, current tax and deferred
tax at the applicable enacted or substantively enacted rates. Current
tax represents the amount of income tax payable in respect of the
taxable income for the reporting period. Deferred tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. The deferred tax asset is
recognized and carried forward only to the extent that there is a
virtual certainty that the asset will be realized in future.
22.19 Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication of impairment of carrying amount of the company''s assets.
The recoverable amount of such assets are estimated, if any indication
exists, and impairment loss is recognized wherever the carrying amount
of the assets exceeds its recoverable amount.
22.20 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
22.21 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilizing the credits.
23. As per Accounting Standard (AS)-17 issued by the Institute of
Chartered Accountants of India, segment information has been provided
in the Notes to Consolidated Financial Statements.
24. Employee Stock Option Scheme
The Company instituted the Employee Stock option scheme  ("the BAG
ESOP Scheme") to grant equity to the eligible employees of the company
and its subsidiaries. "the BAG ESOP Scheme" has been approved by the
Shareholders in their Extra-Ordinary General Meeting held on February
13, 2007, for grant of 10,000,000 options representing one share for
each option. The equity shares covered under the scheme shall vest over
a period of five years. Pursuant to the scheme, the ESOP compensation
committee on July 30, 2008 granted 1,150,000 options to employees of
the B.A.G. Films and Media Limited and its subsidiaries.
During the year 1,50,000 vested option lapses on expiry of the exercise
period i.e. 30-07-2013. Fair value of the option has already been
accounted for as employee compensation now reversed and credited to
employee compensation expense.
Mar 31, 2013
1.1 Basis of accounting and preparation of fi nancial statements
The fi nancial statements of the company have been prepared in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notifi ed under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956.The fi nancial
statements have been prepared under the Historical Cost Convention on
the Mercantile System of accounting and in accordance with the
accounting standards referred to in Section 211(3C) of the Companies
Act, 1956, to the extent applicable. The accounting policies adopted in
the preparations of the fi nancial statements are consistent with those
followed in the previous year.
1.2 Use of Estimates
The preparation of the fi nancial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the fi nancial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
1.3 Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is fi rst exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-off on fi rst telecast or on after the review of
realisability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) Â at actual unamortized cost or net
realizable value whichever is lower.
The company amortizes 75% of the cost of movie rights acquired or
produced by it, on the fi rst theatrical release of the movie. The said
amortization is made proportionately on Domestic Theatrical Rights,
International Theatrical Rights and Video Rights based on Management
estimate of revenues from each of these rights. In case of aforesaid
rights are not exploited along with or prior to the fi rst theatrical
release, proportionate appropriated 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 fi rst theatrical
release, whichever occurs earlier. Balance 25% is amortised over the
balance license period or based on management estimate of future
revenue potential, as the case may be. Thus inventory comprises of
unamortized cost of such movie rights.
1.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignifi cant risk
of changes in value.
1.5 Cash flow statement
Cash fl ows are reported using the indirect method, whereby profi t /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non- cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash fl ows from
operating, investing and fi nancing activities of the Company are
segregated based on the available information.
1.6 Depreciation
Depreciation on fi xed asset is provided on Written down Value method
at the rates and in the manner prescribed in schedule XIV of the
Companies Act, 1956.
1.7 Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Interest is recognized using time proportion method.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
In all other cases, revenue is recognized when no signifi cant
uncertainty as to its determination or realization exists.
1.8 Other Income
Interest income is accounted on accrual basis.
1.9 Fixed Assets & Capital Work-in-Progress
Tangible fi xed assets
The Fixed assets are stated at cost less accumulated depreciation and
impairment. The cost of fi xed assets includes interest on borrowings
attributable to acquisition of qualifying fi xed assets up to the date
the asset is ready for its intended use and other incidental expenses
incurred up to that date. Cost includes capital cost, freight,
installation cost, duties and taxes and other incidental expenses
incurred during the construction/installation and attributable to
bringing the asset to its intended use. Fixed assets are further
adjusted by the amount of CENVAT credit available, wherever applicable.
Subsequent expenditure relating to fi xed assets is capitalized only if
such expenditure results in an increase in the future benefi ts from
such asset beyond its previously assessed standard of performance.
Capital work-in-progress
Capital work in progress comprises of cost of fi xed assets that are
not yet ready for their intended use and outstanding advances paid to
acquire fi xed assets, at the balance sheet date.
1.10 Intangible Fixed Assets
The Intangible assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/installation and attributable to bringing the asset to its
intended use. Fixed assets are further adjusted by the amount of CENVAT
credit available, wherever applicable.
1.11 Foreign Currency Transactions
As per Companies (Accounting Standard) Rules 2006, exchange difference
arising on settlement or restatement of foreign currency denominated
liabilities relating to the acquisition of fi xed assets, which is in
accordance with Accounting Standard-11 issued by the Institute of
Chartered Accountants of India are recognized in the Statement of Profit
& Loss.
As per Schedule-VI of the Companies Act, 1956 exchange differences
arising on foreign currency denominated liabilities relating to the
Capital work in progress/Capital advance forms part of the Capital Work
in progress/Capital Advance.
1.12 Government grants, subsidies and export incentives
No Government grants, subsidies and export incentives received during
the fi nancial year 2012-13
1.13 Investments
Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
1.14 Employee Benefi ts
The company has contributed to employee''s provident fund as per
provisions of the Employee''s Provident Fund Act, 1952 and is charged to
Statement of Profi t and Loss.
The company has contributed to employee''s state insurance fund as per
provisions of the ESI Act, 1948 and is charged to Statement of Profi t
and Loss.
As per the Company''s policy, the gratuity is payable as per the
provisions of the Gratuity Act. Liability in respect of Gratuity is
provided for on the basis of an actuarial valuation as at the date of
Balance Sheet.
Bonus is paid and charged to Statement of Profi t and Loss as per the
provisions of "The Payment of Bonus Act, 1965".
1.15 Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when fi rst put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.16 Segmental Reporting
Primary segments: The company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property
and broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifi able expenses are accounted for directly in respective
segments. Overheads are apportioned pro- rata on revenues.
1.17 Operating Lease
The Company has given broadcasting equipments under operating leases.
These lease agreements are normally renewable on expiry. The rental
income on operating leases is credited to Statement of Profi t and
Loss.
1.18 Earnings per Share (EPS)
The Company reports Basic Earning per equity share in accordance with
the Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic Earnings per equity share has been
computed by dividing the net profi t after tax by the weighted average
number of equity shares outstanding during the year.
The number of shares used in computing the diluted earning per share
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.19 Taxation
Tax expenses for the period comprises of both, current tax and deferred
tax at the applicable enacted or substantively enacted rates. Current
tax represents the amount of income tax payable in respect of the
taxable income for the reporting period. Deferred tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. The deferred tax asset is
recognized and carried forward only to the extent that there is a
virtual certainty that the asset will be realized in future.
1.20 Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication of impairment of carrying amount of the company''s assets.
The recoverable amount of such assets are estimated, if any indication
exists, and impairment loss is recognized wherever the carrying amount
of the assets exceeds its recoverable amount.
1.21 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outfl ow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the fi
nancial statements.
1.22 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilizing the credits.
1.23 Miscellaneous Expenditure
A. Preliminary Expenses
Preliminary expenses are amortized over a period of ten years from the
year of commencement of commercial operations.
B. Deferred Revenue Expenditure
Deferred Revenue Expenditures are those expenditures which have been
incurred in an accounting period and they do not create any assets but
their benefi t is spread in more than one accounting period.
Deferred Employee Compensation : 5 Years from the grant of the option
Expenditure incurred up to the date of commencement of commercial
operations, not directly attributable to fi xed assets are charged to
the Statement of profi t and loss during the year as per Accounting
Standard-26 issued by the Institute of Chartered Accountants of India.
1.24 Employees stock option scheme (ESOS)
The Company calculates the employee stock compensation expense based 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 Employee
Compensation expense and is amortized over the vesting period on the
basis of generally accepting accounting principles in accordance with
the guidelines of Securities and Exchange Board of India and guidance
note issued by the Institute of Chartered Accountants of India.
Accordingly, the excess of market price over the issue price of shares
is recognized as employee compensation and is charged the Statement of
profit and loss.
Mar 31, 2012
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the 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 the
Mercantile System of accounting and in accordance with the accounting
standards referred to in Section 211(3C) of the Companies Act, 1956, to
the extent applicable. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
1.2 Use of Estimates
The preparation of the financial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
1.3 Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is first exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-off on first telecast and after the review of
readability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) - at actual unamortized cost or net
realizable value whichever is lower. The company amortizes 75% of the
cost of movie rights acquired or produced by it, on the first
theatrical release of the movie. The said amortization is made
proportionately on Domestic Theatrical Rights, International Theatrical
Rights and Video Rights based on Management estimate of revenues from
each of these rights. In case of aforesaid rights are not exploited
along with or prior to the first theatrical release, proportionate
appropriated 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, whichever occurs
earlier. Balance 25% is amortised over the balance license period or
based on management estimate of future revenue potential, as the case
may be. Thus inventory comprises of unamortized cost of such movie
rights.
1.4 Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk
of changes in value.
1.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non- cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.6 Depreciation
Depreciation on fixed asset is provided on Written Down Value method at
the rates and in the manner prescribed in Schedule XIV of the Companies
Act, 1956.
1.7 Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Interest is recognized using time proportion method and dividend income
is recognized when the company's right to receive dividend is
established.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
In all other cases, revenue is recognized when no significant
uncertainty as to its determination or realization exists.
1.8 Other Income
Interest income is accounted on accrual basis.
1.9 Fixed Assets & Capital Work-in-Progress
Tangible fixed assets
The Fixed assets are stated at cost less accumulated depreciation and
impairment. The cost of fixed assets includes interest on borrowings
attributable to acquisition of qualifying fixed assets up to the date
the asset is ready for its intended use and other incidental expenses
incurred up to that date. Cost includes capital cost, freight,
installation cost, duties and taxes and other incidental expenses
incurred during the construction/ installation and attributable to
bringing the asset to its intended use. Fixed assets are further
adjusted by the amount of CENVAT credit available, wherever applicable.
Subsequent expenditure relating to fixed assets is capitalized only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Capital work-in-proaress
Capital work in progress comprises of cost of fixed assets that are not
yet ready for their intended use and outstanding advances paid to
acquire fixed assets, at the balance sheet date.
1.10 Intangible Fixed Assets
The Intangible assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/installation and attributable to bringing the asset to its
intended use. Fixed assets are further adjusted by the amount of CENVAT
credit available, wherever applicable.
1.11 Foreign Currency Transactions
As per Companies (Accounting Standard) Rules 2006, exchange difference
arising on settlement or restatement of foreign currency denominated
liabilities relating to the acquisition of fixed assets, which is in
accordance with Accounting Standard-11 issued by the Institute of
Chartered Accountants of India are recognized in the Profit & Loss
account.
As per Schedule-VI of the Companies Act, 1956 exchange differences
arising on foreign currency denominated liabilities relating to the
Capital work in progress/Capital advance forms part of the Capital Work
in progress/Capital Advance.
1.12 Government grants, subsidies and export incentives
No Government grants, subsidies and export incentives received during
the financial year 2011-12.
1.13 Investments
Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
1.14 Employee Benefits
The Company has contributed to employee's provident fund as per
provisions of the Employee's Provident Fund Act, 1952 and is charged to
Profit and Loss Account.
The Company has contributed to employee's state insurance fund as per
provisions of the ESI Act, 1948 and is charged to Profit and Loss
Account.
As per the Company's policy, the gratuity is payable as per the
provisions of the Gratuity Act. Liability in respect of Gratuity is
provided for on the basis of an actuarial valuation as at the date of
Balance Sheet.
Bonus is paid and charged to Profit and Loss Account as per the
provisions of "The Payment of Bonus Act, 1965".
1.15 Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when first put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.16 Segmental Reporting
Primary segments: The company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property
and broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifiable expenses are accounted for directly in respective
segments. Overheads are apportioned pro- rata on revenues.
1.17 Operating Lease
The Company has. given broadcasting equipments under operating leases.
These lease agreements are normally renewable on expiry. The rental
income on operating leases is credited to profit and losses account
1.18 Earnings Per Share (EPS)
The Company reports basic earning per equity share in accordance with
tfie Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic Earnings per equity share has been computed
by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the year.
The number of shares used in computing the diluted earning per shue
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.19 Taxation
Tax expenses for the period comprises of both, current tax and deferred
tax at the applicable enacted or substantively enacted rates. Current
tax represents the amount of income tax payable in respect of the
taxable income for the reporting period. Deferred tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. The deferred tax asset is
recognized and carried forward only to the extent that there is a
virtual certainty that the asset will be realized in future.
1.20 Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication of impairment of carrying amount of the company's assets.
The recoverable amount of such assets are estimated, if any, indication
exists, and impairment loss is recognized wherever the carrying amount
of the assets exceeds its recoverable amount.
1.21 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
1.22 Service Tax Input Credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilizing the credits.
1.23 Miscellaneous Expenditure
A. Preliminary Expenses
Preliminary expenses are amortized over a period of ten years from the
year of commencement of commercial operations.
B. Deferred Revenue Expenditure Deferred Revenue Expenditures are
those expenditures which have been incurred in an accounting period and
they do not create any assets but their benefit is spread in more than
one accounting period.
Deferred Employee Compensation : 5 Years from the grant of the option
Expenditure incurred up to the date of commencement of commercial
operations, not directly attributable to fixed assets are charged to
the profit and loss account during the year as per Accounting
Standard-26 issued by the Institute of Chartered Accountants of India.
1.24 Employees Stock Option Scheme (ESOS)
The Company calculates the employee stock compensation expense based 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 BAG
ESOP Scheme" of the Company, is recognized as Deferred Employee
Compensation expense and is amortized over the vesting period on the
basis of generally accepting accounting principles in accordance with
the guidelines of Securities and Exchange Board of India and guidance
note issued by the Institute of Chartered Accountants of India.
Accordingly, the excess of market price over the issue price of shares
is recognized as employee compensation and is charged to the profit and
loss account.
Mar 31, 2011
1. Accounting Convention
The financial statements have been prepared under the Historical Cost
Convention on the Mercantile System of accounting and in accordance
with the accounting standards referred to in Section 211(3C) of the
Companies Act, 1956, to the extent applicable.
2. Use of Estimates
The preparation of the financial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
3. Fixed Assets & Capital Work-in-Progress
a. The Fixed assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/installation and attributable to bringing the asset to its
intended use. Fixed asset are further adjusted by the amount of CENVAT
credit, wherever applicable.
b. Capital work in progress comprises of cost of fixed assets that are
not yet ready for their intended use and outstanding advances paid to
acquire fixed assets, at the balance sheet date.
4. Depreciation
Depreciation on fixed asset is provided on Written Down Value method at
the rates and in the manner prescribed in schedule XIV of the Companies
Act, 1956.
5. Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Revenue in respect of various rights attached to the Movies (features
films) is recognized with the licensing agreement or on physical
delivery of movies/required material whichever is later.
Revenue from Interactive voice recording services (IVR) is recognized
on provision of services in terms of revenue sharing arrangements with
telecom operators.
Interest is recognized using time proportion method and dividend income
is recognized when the company's right to receive dividend is
established.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
In all other cases, revenue is recognized when no significant
uncertainty as to its determination or realization exists.
6. Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when first put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
7. Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is first exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-off on first telecast or on after the review of
realisability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) - at actual unamortized cost or net
realizable value whichever is lower. The company amortizes 75% of the
cost of movie rights acquired or produced by it, on the first
theatrical release of the movie. The said amortization is made
proportionately on Domestic Theatrical Rights, International Theatrical
Rights and Video Rights based on Management estimate of revenues from
each of these rights. In case of aforesaid rights are not exploited
along with or prior to the first theatrical release, proportionate
appropriated 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, whichever occurs
earlier. Balance 25% is amortised over the balance license period or
based on management estimate of future revenue potential, as the case
may be. Thus inventory comprises of unamortized cost of such movie
rights.
8. Investments
Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
9. Employee Benefits
a) The company has contributed to Employee's Provident Fund as per
provisions of the Employee's Provident Fund Act, 1952 and is charged to
Profit and Loss Account.
b) The company has contributed to Employee's State Insurance fund as
per provisions of the ESI Act, 1948 and is charged to Profit and Loss
Account.
c) As per the Company's policy, the gratuity is payable as per the
provisions of the Gratuity Act. Liability in respect of Gratuity is
provided for on the basis of an actuarial valuation as at the date of
Balance Sheet.
d) Bonus is paid and charged to Profit and Loss Account as per the
provisions of The Payment of Bonus Act, 1965.
10. Taxation
Tax expenses for the period comprises of both, current tax and deferred
tax at the applicable enacted or substantively enacted rates. Current
tax represents the amount of income tax payable in respect of the
taxable income for the reporting period. Deferred tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. The deferred tax asset is
recognized and carried forward only to the extent that there is a
virtual certainty that the asset will be realized in future.
11. Miscellaneous Expenditure
Miscellaneous expenditure represents Preliminary & Deferred Employee
Compensation, which is carried forward to be charged to revenue:-
Preliminary Expenses 10 Years from the date of
incurring the expenditure
Deferred Employee 5 Years from the grant of
Compensation the option
Expenditure incurred up to the date of commencement of commercial
operations, not directly attributable to fixed assets are charged to
the profit and loss account during the year as per Accounting
Standard-26 issued by the Institute of Chartered Accountants of India.
12. Segmental Reporting
Primary segments: The company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property
and broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifiable expenses are accounted for directly in respective
segments. Overheads are apportioned pro- rata on revenues.
13. Earnings Per Share
The Company reports Basic Earning per equity share in accordance with
the Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic Earnings per equity share has been computed
by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the year.
The number of shares used in computing the diluted earning per share
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
14. Employees stock option scheme (ESOS)
The Company calculates the employee stock compensation expense based 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 Employee
Compensation expense and is amortized over the vesting period on the
basis of generally accepting accounting principles in accordance with
the guidelines of Securities and Exchange Board of India and guidance
note issued by the Institute of Chartered Accountants of India.
Accordingly, the excess of market price over the issue price of shares
is recognized as employee compensation and is charged the profit and
loss account.
15. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication of impairment of carrying amount of the company's assets.
The recoverable amount of such assets are estimated, if any indication
exists, and impairment loss is recognized wherever the carrying amount
of the assets exceeds its recoverable amount.
16. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
17. Foreign Currency Transactions
As per Companies (Accounting Standard) Rules 2006, exchange difference
arising on settlement or restatement of foreign currency denominated
liabilities relating to the acquisition of fixed assets, which is in
accordance with Accounting Standard-11 issued by the Institute of
Chartered Accountants of India are recognized in the Profit & Loss
account.
As per Schedule-VI of the Companies Act, 1956 exchange differences
arising on foreign currency denominated liabilities relating to the
Capital work in progress/Capital advance forms part of the Capital Work
in progress/Capital Advance.
Mar 31, 2010
1. Accounting Convention
The financial statements have been prepared under the Historical Cost
Convention on the Mercantile System of accounting and in accordance
with the accounting standards referred to in Section 211(3C) of the
Companies Act, 1956, to the extent applicable.
2. Use of Estimates
The preparation of the financial statements is in accordance with
Generally Accepted Accounting Principles. It requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and reported amounts of
revenues and expenses during the year. Actual results could differ from
these estimates and a revision to such accounting estimates is
recognized in the accounting period in which such a revision takes
place.
3. Fixed Assets & Capital Work-in-Progress
a. The Fixed assets are stated at cost less accumulated depreciation
and impairment. Cost includes capital cost, freight, installation cost,
duties and taxes and other incidental expenses incurred during the
construction/installation and attributable to bringing the asset to its
intended use. Fixed asset are further adjusted by the amount of CENVAT
credit, wherever applicable.
b. Capital work in progress comprises of cost of fixed assets that are
not yet ready for their intended use and outstanding advances paid to
acquire fixed assets, at the balance sheet date.
4. Depreciation
Depreciation on fixed asset is provided on Written Down Value method at
the rates and in the manner prescribed in schedule XIV of the Companies
Act, 1956.
5. Revenue Recognition
In respect of Commissioned programmes, revenue is recognized as and
when the relevant Software programme is delivered to the customers.
Production expenses are net of recoveries, if any.
Revenue in respect of various rights attached to the Movies (features
films) is recognized with the licensing agreement or on physical
delivery of movies/required material whichever is later.
Revenue from Interactive voice recording services (IVR) is recognized
on provision of services in terms of revenue sharing arrangements with
telecom operators.
Interest is recognized using time proportion method and dividend income
is recognized when the Companys right to receive dividend is
established.
Lease rental on equipment is recognized as revenue as per the terms of
the lease agreement.
In all other cases, revenue is recognized when no significant
uncertainty as to its determination or realization exists.
6. Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of a qualifying asset is capitalized as part of the cost of that asset
when first put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
7. Inventories
Stock of Tapes, Cassettes, Discs and Electronic Devices
Inventories of raw stock consists of tapes, cassettes, compact discs
and other electronic devices which are valued at lower of cost or
estimated net realizable value. Cost is taken on First in First Out
basis (FIFO).
Inventories Related to Television Software and Programme Pilots
The entire cost of the programme is charged to income when the
programme is first exploited. The inventory thus comprises of
unamortized cost of such programmes. In case of Programme Pilots, the
cost is expensed-off on first telecast or on after the review of
realisability.
Inventories Related to Movies (Feature Films)
Movies under production (WIP) - at actual unamortized cost or net
realizable value whichever is lower.
The Company amortizes 75% of the cost of movie rights acquired or
produced by it, on the first theatrical release of the movie. The said
amortization is made proportionately on Domestic Theatrical Rights,
International Theatrical Rights and Video Rights based on Management
estimate of revenues from each of these rights. In case of aforesaid
rights are not exploited along with or prior to the first theatrical
release, proportionate appropriated 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, whichever occurs earlier. Balance 25% is amortised over the
balance license period or based on management estimate of future
revenue potential, as the case may be. Thus inventory comprises of
unamortized cost of such movie rights.
8. Investments
Current investments are stated at cost or fair value whichever is
lower. Long term investments are stated at cost. Provision for
diminution in value of long term investment is made, if the diminution
is other than temporary.
9. Employee Benefits
a) The Company has contributed to Employees Provident Fund as per
provisions of the Employees Provident Fund Act, 1952 and is charged to
Profit and Loss Account.
b) The Company has contributed to Employees State Insurance fund as
per provisions of the ESI Act, 1948 and is charged to Profit and Loss
Account.
c) As per the Companys policy, the gratuity is payable as per the
provisions of the Gratuity Act. Liability in respect of Gratuity and
Leave encashment is provided for on the basis of an actuarial valuation
as at the date of Balance Sheet.
d) Bonus is paid and charged to Profit and Loss Account as per the
provisions of The Payment of Bonus Act, 1965.
10. Taxation
Tax expenses for the period comprises of both, current tax and deferred
tax at the applicable enacted or substantively enacted rates. Current
tax represents the amount of income tax payable in respect of the
taxable income for the reporting period. Deferred tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. The deferred tax asset is
recognized and carried forward only to the extent that there is a
virtual certainty that the asset will be realized in future.
11. Miscellaneous Expenditure
Miscellaneous expenditure represents Preliminary & Deferred Employee
Compensation, which is carried forward to be charged to revenue:-
Preliminary Expenses 10 Years from the date of
incurring the expenditure
Deferred Employee 5 Years from the grant
Compensation of the option
Expenditure incurred up to the date of commencement of commercial
operations, not directly attributable to fixed assets are charged to
the profit and loss account during the year as per Accounting
Standard-26 issued by the Institute of Chartered Accountants of India.
12. Segmental Reporting
Primary segments: The Company has three primary reportable business
segments i.e. audio-video production, movies and leasing of property
and broadcasting equipments.
Secondary segments: The Company caters to the needs of Indian market
representing singular economic environments with similar risks and
rewards and hence there are no reportable geographical segments.
Identifiable expenses are accounted for directly in respective
segments. Overheads are apportioned pro- rata on revenues.
13. Earnings Per Share
The Company reports Basic Earning per equity share in accordance with
the Accounting Standard-20 issued by the Institute of Chartered
Accountants of India. Basic
Earnings per equity share has been computed by dividing the net profit
after tax by the weighted average number of equity shares outstanding
during the year.
The number of shares used in computing the diluted earning per share
comprises of the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
14. Employees Stock Option Scheme (ESOS)
The Company calculates the employee stock compensation expense based 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 Employee
Compensation expense and is amortized over the vesting period on the
basis of generally accepting accounting principles in accordance with
the guidelines of Securities and Exchange Board of India and guidance
note issued by the Institute of Chartered Accountants of India.
Accordingly, the excess of market price over the issue price of shares
is recognized as employee compensation and is charged the profit and
loss account.
15. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication of impairment of carrying amount of the Companys assets.
The recoverable amount of such assets are estimated, if any indication
exists, and impairment loss is recognized wherever the carrying amount
of the assets exceeds its recoverable amount.
16. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
17. Foreign Currency Transactions
As per Companies (Accounting Standard) Rules 2006, exchange difference
arising on settlement or restatement of foreign currency denominated
liabilities relating to the acquisition of fixed assets, which is in
accordance with Accounting Standard-11 issued by the Institute of
Chartered Accountants of India are recognized in the Profit & Loss
account.
As per Schedule-VI of the Companies Act, 1956 exchange differences
arising on foreign currency denominated liabilities relating to the
Capital work in progress/Capital advance forms part of the Capital Work
in progress/Capital Advance.
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