Accounting Policies of Deccan Chronicle Holdings Ltd. Company

Sep 30, 2012

1.1. Basis for preparation of financial statements

The financial statements have been prepared in accordance with the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 to the extent applicable. The accounts are prepared under historical cost convention and ongoing concern basis, with revenue recognized, expenses accounted on their accrual and in accordance with Generally Accepted Accounting Principles in India. The accounting policies have been consistently applied and followed by the Company.

1.2. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements and of the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods.

1.3. Inventory

Raw materials, stores, spares and& consumables useable in the printing and publication of newspapers and periodicals are valued at cost on FIFO basis. Cost includes applicable taxes, duties and transportation, handling and interest cost. Inventories of Odyssey stores are valued at the lower of cost and net realizable value. Cost is determined by the weighted average cost method.

1.4. Fixed assets and depreciation

Fixed Assets are stated at cost of acquisition less accumulated depreciation. Expenditure which are of capital in nature are capitalized at cost, which comprises of purchase price (net of rebates and discounts), import duties, levies and all other expenditure directly attributable to cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to put to use. Depreciation on fixed assets is provided on the basis of Straight Line Method, at the rates and in the manner prescribed in the Schedule XIV to the Companies Act, 1956. On additions and disposals, depreciation is provided for the period of use during the period under report. Brand and Editorial content property rights relating to Asian Age grouped under Intangibles which we are acquired are amortized on straight line basis over period often years.

1.5. Capital work in progress

Advances paid towards the acquisition of fixed assets and direct expenses pertaining to the cost of those assets, not put to use before the period end are disclosed under ''Capital work in progress''.

1.6. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Specifically, the following basis is adopted.

Advertisements: Advertisement revenue is recognized, net of discount and commission, as and when advertisement is published/sold. Further, advertisement revenue earned, as per arrangement with BCCI, from sale of media rights, ticket revenue from the viewer ship in stadium, sponsorship and in-stadia advertisement etc., are recognized on accrual / intimation by BCCI.

Circulation Revenue: Circulation revenue is recognized, net of commission, on dispatch of newspapers and periodicals.

Sale of merchandise: Revenue from sale of merchandise is recognized when significant risks and rewards in respect of ownership of products are transferred to the customer.

Other Operating Income: Sale of scrap is recognized upon passing of title/sale invoice is made and interest income is recognized on time proportionate basis.

1.7. Foreign currency transactions

Foreign exchange transactions are accounted at the rates prevailing on the date of transactions. Monetary assets and liabilities relating to foreign currency transactions unsettled at the end of the period are translated at period end rates. The difference in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in the Statement of Profit and Loss.

1.8. Retirement benefits

Retirement benefits in the form of Provident Fund are charged to the Statement of Profit & Loss of the period when the contributions to the respective funds are due and/or paid. Gratuity, which is a defined benefit plan, is provided as per actuarial valuation, determined by an independent actuary, as on balance sheet date.

1.9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such asset. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.10. Leases

Assets taken on finance lease are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and interest cost, so as to obtain a constant periodic rate of interest on outstanding liability for each period. Operating leases in respect of office and other equipment, house for employees, Office buildings are cancelable/ renewable by mutual consent on agreed terms. Lease payments under an operating lease are recognized as an expense in the Statement of Profit and Loss.

1.11. Earnings per share

Basic and Diluted Earnings Per Share (EPS) is reported in accordance with Accounting Standard 20 on Earning Per Share. EPS is computed by dividing the net profit or loss after tax for the period by weighted average number of Equity shares outstanding during the period. Diluted EPS is computed by dividing the net profits or loss after tax for the period by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

1.12. Taxation

Provision for Current tax is made based on the tax liability computed in accordance with the relevant tax rates and provisions of Income Tax Act, 1961. Deferred tax is measured based on the tax rates and tax laws enacted or substantially enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.

1.13. impairment of Fixed assets

An Asset is treated as impaired when the carrying value of assets exceeds its recoverable value. An impairment loss is charged to Statement of Profit & Loss as an expense immediately, when the asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount based on external and internal sources of information.

1.14. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is a present obligation as a result of past obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation ore present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation ore present obligation that the likelihood of outflow of resources is remote, no provision is made.

1.15. Cash Flow Statement

The Cash Flow Statement is prepared under the indirect method as per Accounting Standard 3"Cash Flow Statement".

1.16. Segment Reporting

The Company is primarily in the business of printing and publication of newspapers and periodicals and related advertisement revenues. The Company''s operations are geographically spread across India and do not have any operations in economic environments with different risks and returns. Accordingly, pursuant to the accounting standards, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment.

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Mar 31, 2011

Company overview

The Company is in the businesses of Printing and publication of newspapers and periodicals, sports and entertainment under the Brand "Deccan Chargers", chain of leisure stores offering various consumer lifestyle products under the Brand "Odyssey".

The Company is the publisher of the largest circulated English Newspaper in South India – "Deccan Chronicle" with a circulation of over 1.426 Million Copies per day (Source: ABC Jan-June' 2011) across Andhra Pradesh, Tamil Nadu and Karnataka. The Company also publishes another English daily "The AsianAge", English Financial Newspaper "Financial Chronicle" and "Andhra Bhoomi" a Telugu Daily, weekly, monthly.

The Company is the owner of the Hyderabad Franchise of the Indian Premier League (IPL) "Deccan Chargers", created by the Board of Control for Cricket in India (BCCI).

Odyssey aims to fulfill the aspirational needs of consumer, positioned as neighborhood leisure store offering consumer lifestyle products like books, music, stationery, gift items, toys, pens, eye-ware etc., having stores spread across the States of Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and National Capital Region.

1.1. Basis for preparation of financial statements

The financial statements have been prepared to comply in all material respects with mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006. The accounts are prepared under historical cost convention and on going concern basis, with revenue recognized, expenses accounted on their accrual and in accordance with Generally Accepted Accounting Principles in India. The accounting policies have been consistently applied by the company.

1.2. Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

1.3. Inventory

Raw materials, stores, spares & consumables useable in the printing and publication of newspapers and periodicals are valued at cost on FIFO basis. Cost includes applicable taxes, duties and transportation, handling and interest cost. Inventories of Odyssey are valued at the lower of cost and net realizable value. Cost is determined by the weighted average cost method. There is no work-in-process and finished stock.

1.4. Fixed assets and depreciation

Assets are stated at cost of acquisition less accumulated depreciation. Expenditure which are of capital in nature are capitalized at cost, which comprises of purchase price (net of rebates and discounts), import duties, levies and all other expenditure directly attributable to cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Depreciation on fixed assets is provided on the basis of Straight Line Method, at the rates and in the manner prescribed in the Schedule XIV to the Companies Act, 1956. On additions and disposals, depreciation is provided for the period of use during the year under report. Brand and Editorial content property rights which are acquired are amortized on straight line basis over period of ten years and other expenditure is amortized equally over a period of five years.

1.5. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Specifically, the following basis is adopted;

Advertisements: Advertisement revenue is recognized, net of discount and commission, as and when advertisement is published. Further, advertisement revenue earned, as per arrangement with BCCI, from sale of media rights, sponsorship and in stadia advertisement etc., are recognized on accrual / intimation of BCCI.

Circulation Revenue: Circulation revenue is recognized, net of commission, on dispatch of newspapers and periodicals.

Sale of merchandise: Revenue from sale of merchandise is recognized when significant risks and rewards in respect of ownership of products are transferred to the customer.

Other Operating Income: Ticket revenue from the viewership in stadium, sale of scrap and interest income etc., is recognized as other income.

1.6. Capital work in progress

Advances paid towards the acquisition of fixed assets and direct expenses pertaining to the cost of assets, not put to use before the year end are disclosed under 'Capital work in progress'

1.7. Foreign currency transactions

Foreign exchange transactions are accounted at the rates prevailing on the date of transactions. Monetary assets and liabilities relating to foreign currency transactions unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in the Profit and Loss Account.

1.8. Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as 'Current Investments'. All other investments are classified as 'Long-Term Investments' and carried at cost of acquisition.

1.9. Amalgamations

Pursuant to Sec 394 of the Companies Act, 1956 the Hon' ble High Court of Andhra Pradesh vide its order dated March 12, 2010 sanctioned the scheme of amalgamation of Sieger Solutions Limited, Asianage Holdings Limited and Deccan Chronicle Bangalore Limited with the Company from the appointed date of April 1, 2009.

Pursuant to Sec 394 of the Companies Act, 1956 the Hon' ble High Court of Andhra Pradesh sanctioned the schemes of amalgamation of a) Netlink Technologies Ltd. b) Deccan Chargers Sporting Ventures Ltd. and Odyssey India Ltd. with the Company vide its orders dated March 9, 2011 and April 15, 2011 respectively, from the appointed date of April 1, 2010.

1.10. Retirement benefits

Retirement benefits in the form of Provident Fund are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. Gratuity, which is a defined benefit plan, is provided as per actuarial valuation, determined by an independent actuary, as on balance sheet date.

1.11. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such asset. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue account.

1.12. Leases

Assets taken on finance lease are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and interest cost, so as to obtain a constant periodic rate of interest on outstanding liability for each period. Operating leases in respect of office & other equipment, house for employees, Office buildings are cancelable / renewable by mutual consent on agreed terms. Lease payments under an operating lease are recognized as an expense in the Profit and Loss account.

1.13. Earnings per share

Basic and Diluted Earnings Per Share (EPS) is reported in accordance with Accounting Standard 20 on Earning Per Share. EPS is computed by dividing the net profit or loss after tax for the year by weighted average number of Equity shares outstanding during the year. Diluted EPS is computed by dividing the net profits or loss after tax for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

1.14. Taxation

Provision for Current tax is made based on the liability computed in accordance with the relevant tax rates and provisions of Income Tax Act, 1961. Provision for deferred tax is made for timing differences arising between the taxable and accounting income computed using the tax rates and the laws that have been enacted or substantively enacted as of the balance sheet date.

1.15. Interim Financial Reporting

In terms of the Accounting Standard 25 and Clause 41 of the Listing Agreement entered with the stock exchanges, the Company published interim financial results (limited review) of quarters ended June 2010, September 2010, December 2010 and March 2011.

1.16. Impairment of Fixed assets

An Asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged to Profit & Loss account as an expense immediately, when the asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount based on external and internal sources of information.

1.17. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is a present obligation as a result of past obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.18. The cost of operating the franchise 'Deccan Chargers' like remuneration to players and support staff, franchise fee, travelling and hotel accommodation of team, advertisements, promotions and the costs involving sale of merchandise by 'Odyssey' like purchase of books, merchandise, rents, promotional expenses etc., are accounted and grouped in respective natural heads of account in accordance with the Generally Accepted Accounting Principles

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Mar 31, 2010

1.1. Basis for preparation of financial statements

The financial statements have been prepared to comply in all material respects with mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006. The accounts are prepared under historical cost convention and on the going concern basis, with revenue recognized, expenses accounted on their accrual and in accordance with Generally Accepted Accounting Principles in India. The accounting policies have been consistently applied by the company.

1.2. Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

1.3. Fixed assets and depreciation

Assets are stated at cost of acquisition less accumulated depreciation. Expenditure which are of capital in nature are capitalized at cost, which comprises of purchase price (net of rebates and discounts), import duties, levies and all other expenditure directly attributable to cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Depreciation on fixed assets is provided on the basis of Straight Line Method, at the rates and in the manner prescribed in the Schedule XIV to the Companies Act, 1956. On additions and disposals, depreciation is provided for the period of use during the year under report. Brand and Editorial content property rights which are acquired are amortized on straight line basis over period of ten years and other expenditure is amortized equally over a period of five years.

1.4. Impairment of Fixed assets

An Asset is treated as impaired when the carrying of assets exceeds its recoverable value. An impairment loss is charged for when the asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.5. Capital work in progress

Advances paid towards the acquisition of fixed assets and direct expenses pertaining to the cost of assets, not put to use before the year end are disclosed under ‘Capital work in progress

1.6. Inventory

Raw materials, stores, spares & consumables are valued at cost on FIFO basis. Cost includes applicable taxes, duties and transportation, handling and interest cost. There is no work-in-process and finished stock in News Paper Industry.

1.7. Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as ‘Current Investments. All other investments are classified as ‘Long-Term Investments and carried at cost of acquisition.

1.8. Foreign currency transactions

Foreign exchange transactions are accounted at the rates prevailing on the date of transactions. Current Assets and Liabilities in foreign currency outstanding at the close of financial year are calculated at the appropriate exchange rates prevailing at the close of the year. The gain or loss arising on account of decrease / increase in reporting currency due to fluctuations in rates of exchange, in the case of amounts receivable or payable in foreign currency, are recognized in the profit and loss account.

1.9. Retirement benefits

Retirement benefits in the form of Provident Fund are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. Gratuity, which is a defined benefit plan, is provided as per actuarial valuation, determined by an independent actuary, as on balance sheet date.

1.10. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such asset. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue account.

1.11. Taxation

Provision for Current tax is made based on the liability computed in accordance with the relevant tax rates and provisions of Income Tax Act, 1961. Provision for deferred tax is made for timing differences arising between the taxable and accounting income computed using the tax rates and the laws that have been enacted or substantively enacted as of the balance sheet date.

1.12. Earning per share

Basic and Diluted Earning Per Share (EPS) is reported in accordance with Accounting Standard 20 on Earning Per Share. EPS is computed by dividing the net profit or loss after tax for the year by weighted average number of Equity shares outstanding during the year. Diluted EPS is computed by dividing the net profits or loss after tax for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

1.13. Segment reporting

The Company is exclusively engaged in the business of ‘printing & publishing of newspaper and periodicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. The Companys operations are geographically spread within India.

1.14. Going Concern

The Company has taken over as a going concern, the business including all assets, liabilities and other balances of Partnership firm "Deccan Chronicle" with effect from 1st January 2003 and pursuant to Sec 394 of the Companies Act, 1956 the Hon ble High Court of Andhra Pradesh on 20th September 2004 approved the scheme of amalgamation of Deccan Chronicle Private Limited and Nandi Publishers Private Limited (Transferor Companies) with Deccan Chronicle Holdings Limited (Transferee Company) with effect from 1st April 2003.

Pursuant to Sec 394 of the Companies Act, 1956 the Hon ble High Court of Andhra Pradesh on 12th March 2010 approved the scheme of amalgamation of M/s.Sieger Solutions Limited, M/s.Asianage Holdings Limited and Deccan Chronicle Bangalore Limited (Transferor Companies) with Deccan Chronicle Holdings Limited (Transferee Company) with effect from 1st April 2009.

1.15. Revenue recognition

Advertisement revenue is recognized as and when advertisement is published and Circulation revenue is recognized on dispatch (both above revenue are net of discount, commission and rebates).