NOTES FORMING PART OF ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES NOTES TO THE FINANCIAL STATEMENTS Nature of Operations The Company was incorporated on June 22, 1992 in the name of VR Mathur Mass Communications Ltd. and subsequently the name has been changed to Gradiente Infotainment Ltd.( w.e.f 09-01-2003). The Company's revenue is generated mainly from advertisement, in Print Media & Electronic Media and TV Serial production for other production houses and own production. 1Significant Accounting Policies i)Basis of Accounting These financial statements are brpared under the historical cost convention and comply in all material aspects with the applicable accounting principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 2013 ("The Act") and the relevant provisions of the Act. ii)Use of Estimates The brparation of financial statements in accordance with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of financial statements and the reported amount of expenses of the year. Actual results could differ from these estimates. Any revision to such accounting estimates is recognized in the accounting period in which such revision takes place. iii)Revenue Recognition Revenue from Advertisement in Print Media & Electronic Media and TV Serial Production is recognized on an accrual basis on fulfilling the terms of contract & publicity of client's commercial, net of service tax. iv)Fixed assets and Debrciation a. Tangible assets Tangible fixed assets are stated at cost less accumulated debrciation. Debrciation on tangible fixed assets is provided on written down value method at the rates and in the manner specified in Schedule II to the Act. The cost of leasehold improvements is amortized over the primary period of lease of the property. Tangible assets individually costing less than Rupees 5,000 are debrciated @ 100% in the year of purchase. v)Software Software obtained initially together with hardware is capitalized along with the cost of hardware and debrciated in the same manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged in the year of purchase. vi)Foreign Currency Transactions Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realization. Monetary items denominated in foreign currency as at the Balance Sheet Date are converted at the exchange rates brvailing on that day. Exchange differences are recognized in the Profit and Loss account. vii)Investments Long term investments are stated at cost. Provision is made for permanent diminution in value, if any. Current investments are stated at lower of cost and market value / repurchase price. vi)Foreign Currency Transactions Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realization. Monetary items denominated in foreign currency as at the Balance Sheet Date are converted at the exchange rates brvailing on that day. Exchange differences are recognized in the Profit and Loss account. vii)Investments Long term investments are stated at cost. Provision is made for permanent diminution in value, if any. Current investments are stated at lower of cost and market value / repurchase price. viii)Retirement Benefits a.Gratuity In accordance with payment of Gratuity Act 1972, company has provided for gratuity, covering the employees of the company who have rendered service for a continuous period of service of not less than five years. The Gratuity plan provides a lump-sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment with the Company. Liabilities with regard to gratuity plan are determined based on estimates at the Balance Sheet date. The company is yet to frame a scheme for making annual contributions to the Employees group for qualifying employees. b.Provident Fund Provident fund contribution is not applicable to the company as the number of employed persons in the company is less than the limit brscribed i.e. 20 persons. ix)Borrowing Cost Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalized as part of cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. x)Taxation Provision for income tax is to be made at the current tax rates based on assessable income or on the basis of Section 115JB of the Income Tax Act, 1961. However, in view of sizable accumulated/un-absorbed business losses of the Company subsisting as on 01.04.2014 that are eligible for carry forward and set off, no tax liability/obligation is reported. Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. xi)Impairment of Assets The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. xii)Provisions and Contingent Liabilities The Company recognizes a provision when there is a brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its brsent date value and are determined based on best estimates of the amount 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. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. 2.Contingent Liabilities a.The Company has defaulted in payment of loan to Andhra Bank for which they have raised a demand of Rs.1.80 crores under one time settlement scheme (OTS) vide letter no.1204/45/26/837 dated 12-03-2004. In response to the above, the company had requested the Bank to favorably consider their settlement offer of Rs.1.00 crore as against the above demand. No further information (acceptance/rejection) is available about the brsent status of the above demand by the Bank and counter settlement offer by the Company. Notwithstanding the above, Bank had proceeded in exercising their enforcement rights and accordingly, auctioned in the year 2006-07, the following 2 properties. •No.301/1, 3rd Floor of Krishna Plaza, Municipal # 6-2-953/A and 6-2-953/B admeasuring 952.85sq ft along with undivided land 30.68 sq Yds, Kharitabad and •No.309/1, 3rd Floor of Krishna Plaza, Municipal # 6-2-953, 6-2-953/A and 6-2-953/B admeasuring 923.65sq ft along with undivided land 28.83 sq Yds, Kharitabad. An amount of Rs.41.00 lacs were reportedly realized by the Bank from the auction sale of the above properties, which were purportedly adjusted towards their book outstanding. The Company had in addition to the above, from time to time, reportedly paid to the bank an amount of Rs.9 lacs, thereby resulting in a total repayment of Rs.50 lacs. Balance net demand, without considering future interests/costs/charges etc by the Bank from 12.03.2004 until 31.03.2015 would be Rs.1.30 crores. Company has submitted their written request to the Bank, seeking confirmation of balance amount outstanding, due and payable by them to the Bank as on 31.03.2015, incl unrealized interests/costs/ charges etc., for which response of the Bank is still awaited. In view of the above pending status, we are unable to determine the quantum of Contingent Liability upon the Company as on 31.03.2015, even though the Company continues to disclose their financial obligation and dues to the Bank at Rs.3614500 under Note No. 6: Long Term Borrowings, Item (b) : Secured Loans. b.The Company has defaulted in payment of loan to Indian Bank, long back Company has submitted their written request to the Bank, seeking confirmation of balance amount outstanding, due and payable by them to the Bank as on 31.03.2015, incl unrealized interests/costs/ charges etc., for which response of the Bank is still awaited. In view of the above pending status, we are unable to determine the quantum of Contingent Liability upon the Company as on 31.03.2015, even though the Company continues to disclose their financial obligation and dues to the Bank at Rs.426370 under Note No. 6: Long Term Borrowings, Item (b) : Secured Loans. 5.Sundry Creditors Disclosure has been made as per the definition given in the Micro, Small and Medium Enterprises Development Act, 2006. The Company is not having the information regarding supplier’s status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to the amounts as at year end together with interest payable as required under the Act has not been given. 6.Capital Work in Progress The Opening Balance as on 01.04.2014 lying in Capital Work In Progress being Rs.20397779/- pertain to purported advance payments reckoned prior to 01.04.2014 towards purchase of properties of Flat G1, G2 & G3 in ground floor of “Siri Balaji Residency” admeasuring 5100 sq ft by V R Mathur (personal) under multiple unregistered documents of sale. It is further noted that the right holder Mr.V.R Mathur (personal) has no certain intent to have the properties registered in the name of the Company in future. Accordingly, necessary adjustment entry has been effected during the year 2014-15, to establish factual position. 7.Segment Information In accordance with Accounting Standard - 17, "Segmental Reporting" issued by the Institute of Chartered Accountants of India, the Company's business segment is Print Media & Electronic Media and TV Serial Production business and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liability, total cost incurred to acquire segment assets and total amount of charge for debrciation during the year, is as reflected in the Financial Statements as of and for the year ended March 31, 2015. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments. 17.Retirement Benefits a.Gratuity: The Company is yet to contribute Rs. 16,02,403/- towards the gratuity fund on the basis of brexisting liability. b.Provident Fund: The Company has not made any contributions to provident fund for employees during the year Name of the |
