1. Significant Accounting Policies (a) Basis of the Preparation of the Financial Statements These Financial Statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain Tangible Fixed Assets which are being carried at revalued amounts (as indicated in Notes 9.1,9.2,9.3 and 9.4). Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies ( Accounts ) Rules,2014, till the standards of Accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements are brpared to comply in all material aspects, with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules 2006 as amended] and the other relevant provisions of the Companies Act, 2013. All assets and liabilities have been classified as current or non current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products / service and the time between the acquisition of assets for processing / providing the services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non current classification of assets and liabilities. (b) Use of Estimates The brparation of the financial statements in conformity with the generally accepted accounting principles in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the balance sheet date, the reported amount of revenue and expenses for the period and disclosure of contingent liability as at the balance sheet date. The estimates and assumptions used in the financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from estimates. (c) Fixed Assets (i) Tangible Assets Tangible Fixed Assets are stated at their original cost less debrciation, where applicable, other than revalued items which are stated at valuation less debrciation, where applicable, as referred to in Notes 9.1,9.2,9.3 and 9.4. Impairment loss is recognised wherever the carrying amount of tangible fixed assets of a cash generating unit exceeds its recoverable amount ( i.e. higher of net selling price and value in use). (ii) Intangible Assets The cost incurred for producing / purchasing feature films wherein future economic benefits are established to accrue over medium to long term period are recognised as intangible asset in the year of release at 50% of the cost of making the film including negatives or purchase cost. Outright acquisition of music copyrights wherein future economic benefits are established are capitalised. Softwares are capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs includes license fees and cost of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. Impairment loss is recognised wherever the carrying amount of intangible fixed assets of a cash generating unit exceeds its recoverable amount ( i.e. higher of net selling price and value in use). (d) Debrciation / Amortisation Debrciation on original cost and amount added on revaluation of tangible fixed assets is provided on a pro rata basis on the straight line method based on the estimated useful lives of the asset as brscribed under Schedule II to the Companies Act, 2013 which is in line with the technical evaluation carried out in 2014-15 by the Company's expert. Aforesaid technical evaluation carried out in 2014-15 have been revisited by the Company's management during the year and no change to the evaluated life considered necessary. Feature Films / Music Copyrights are amortised on straight line basis over a period of 1-10 years. The Company reviews the expected future revenue potential at the end of each accounting period and recognises impairment loss, where required. Software’s are amortised on a straight line basis over a period of three years from the date of capitalization. (e) Investments Long term investments are stated at cost / cost less write down. Provision for diminution is made to recognise a decline other than temporary in the carrying amount of long term investments as determined by the Board of Directors on periodical review. Current investments are carried at lower of cost and fair value. (f) Inventories Inventories are valued at lower of cost and net realisable value. (i) Finished Goods The cost is determined on specific identification / weighted average basis, as considered appropriate by the Company, and includes, where applicable, appropriate share of overheads. Provision is made for obsolete / slow moving / defective stocks, where necessary. (ii) Television Serials Television serials under production are included under 'Work-in-Progress' at cost or under. Untelecasted television serials are stated at lower of cost and net expected revenue and included under 'Finished Goods'. (g) Employee Benefits Short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee services are rendered. Contribution towards superannuation at rates specified in related approved scheme covering eligible employees opting for such contribution is recognised as expense and funded. Liability towards gratuity (defined benefit), covering eligible employees, is provided on the basis of year-end actuarial valuation using Projected Unit Credit Method. Gratuity is funded. Accrued liability towards leave encashment benefits (defined benefit), covering eligible employees, evaluated on the basis of year-end actuarial valuation using Projected Unit Credit Method is recognised as charge. Contribution towards provident fund to Government administered provident fund is recognised as expense. Actuarial gains / losses arising in Defined Benefit Plans are recognised immediately in the Statement of Profit and Loss as income / expense for the year in which they occur. Termination benefits rebrsent compensation towards Voluntary Retirement Scheme which is expensed on accrual of liability. (h) Sales and Licence Fees Revenue from sales is recognised on transfer of significant risks and rewards of ownership to customers based on agreement with the customers. Licence Fees rebrsent income from music rights. Revenue relating to television serials is recognised on the basis of telecast / delivery of content, as applicable. (i) Other Income Interest: Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend: Dividend income is recognised when the right to receive dividend is established. (j) Royalty Minimum Guarantee Royalty is recognised as expense within the license period or ten years, whichever is earlier. Royalty on sales, other than physical sales, is provided on the basis of management's best estimate of the expenditure required to settle the obligation. Other royalty payments are charged at agreed rates on related sales. (k) Foreign Currency Transactions Transactions in foreign currency are accounted for at the exchange rates brvailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates .The resultant exchange differences arising from settlement of foreign currency transaction and from year-end restatement are recognised in the Statement of Profit and Loss. (l) Borrowing Cost Borrowing costs, if any, attributable to the acquisition and construction of qualifying assets are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in which these are incurred. (m) Taxes on Income Current tax is provided as the amount of tax payable in respect of taxable income for the year measured using the applicable tax rules and laws. Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only if there is a virtual / reasonable certainty, as applicable, in keeping with Accounting Standard 22 on 'Accounting for Taxes on Income' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date. MinimumAlternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax in excess of MAT during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax in excess of MAT during the specified period. (n) Provisions and Contingent Liabilities Provisions are recognised when there is a brsent obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation as at the Balance Sheet date and are not discounted to its brsent value. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. 1.1 Based on valuation reports of valuers, appointed for the purpose, the tangible fixed assets (other than furniture and fittings, office equipment, vehicles and certain items of plant and equipment) were revalued on 31st March, 1984 and again (except for those relating to record making machinery items) on 30th September, 1987 after considering the then (a) current market value/ derived rates attributable to land (b) current replacement cost after debrciation etc. and an amount of Ra. 587.31 lacs and Ra. 628.19 lacs were added to the book value of the related assets (with corresponding credit to Fixed Asset Revaluation Reserve) on 31st March, 1984 and 30th September, 1987 respectively. 1.2 Certain tangible fixed assets of the Company viz Land and Buildings were revalued in June 2003 by registered valuers at the lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs. 2,374.11 lacs were added to the book value of the related assets with utilisation of the corresponding credit amount pursuant to an approved scheme of arrangement. 1.3 Company's land was revalued on 31st March, 2007 by registered valuers, at lower of current replacement cost and realisable value. Resultant incremental value amounting to Rs. 4,421.30 lacs were added to the book value of land with corresponding credit to Revaluation Reserve of Rs. 2,697.56 lacs and utilisation of the balance amount of Rs. 1,723.74 lacs pursuant to a sanctioned scheme of amalgamation of erstwhile Saregama Films Limited with the Company in 2006-07. 1.4 In respect of tangible fixed asset covered by revaluation made in the earlier years, debrciation has been calculated on their respective revalued amounts. Debrciation on account of incremental amount to the extent of Rs 13.68 lacs ( Previous year -Rs.13.68 lacs) has been transferred from Revaluation Reserve to General Reserve. 1.5 Title deeds of the immovable properties as set out in the above table are in the name of the Company. 5. In terms of Accounting Standard (AS) 17 on 'Segment Reporting' notified in the Companies Act, segment information has been brsented in the Consolidated Financial Statements(brpared pursuant to Accounting Standard (AS) 21 on 'Consolidated Financial Statements' and Accounting Standard (AS) 27 on 'Financial Reporting of Interests in Joint Ventures' notified in the Companies Act ) included in the Annual Report for the year. 6. (a) The Company has infused fresh equity of Rs.Nil (2014-15 Rs. 1700 lacs) and provided loans and advances [repayable on demand at the interest rate of 10.95 % p.a.(2014-15 - 14.25% p.a)] of Rs. 7.27 lacs (2014-15 - advances Rs.14.33 lacs) during the year in / to its subsidiary, Kolkata Metro Networks Limited for events business and financial assistance. (b) The Company has invested in equity of Ra. 2.67 lacs ( 2014-15 Rs. 17.80 lacs ) and provided loans and advances [repayable on demand at the interest rate of 10.95 % p.a. (2014-15- 14.25% p.a.)] of Rs. 1201.38 lacs (2014-15 Rs.826.16 lacs) during the year in / to its subsidiary Open Media Network Private Limited for financial assistance. 7. Current Tax provision is net of Minimum Alternate Tax (MAT) credit Rs. 452.32 lacs (2014-15 Rs. 996.03 lacs) relating to earlier years based on income tax computation set out in accounting policy [ Note 1 (m) ] and Company's Return of Income. 8. Previous year's figures have been regrouped or rearranged, where considered necessary, to conform to current year's classification. For Price Waterhouse On behalf of the Board Firm Registration No. 301112 E Chartered Accountants (Pinaki Chowdhury) Partner Membership No. - 057572 T. Paul Company Secretary V. Mehra Managing Director DIN - 03556680 G. B. Aayeer Chief Financial Officer & Director DIN – 00087760 Place : Kolkata, Date : 25th May, 2016 |