Accounting Policies of Kirloskar Multimedia Ltd. Company

Mar 31, 2014

1.1 Basis of Preparation: The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C)[Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

2.2 Use of Estimates: The preparation of the financial results in conformity with GAAP requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Where no reliable estimate can be made, a disclosure is made as contingent liability. Actual results would differ from those estimates. The differences if any will be dealt accordingly in the year in which the results are known.

2.3 Cash Flow Statement: Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

2.4 Fixed Assets: Fixed assets are stated at cost less accumulated depreciation.

2.5 Investments: Investment in wholly-owned subsidiary is shown at cost. Provision is made for any diminution, other than temporary in the accounts.

2.6 Depreciation on Fixed Assets:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 as amended vide Notification No. GSR 757 (E) dated 16.12.1993 issued by the Department of Company Affairs, Government of India, New Delhi.

2.7. Revenue Recognition: All Income and Expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2.8 Related Party Disclosure: The transactions between the Company and the related parties are desclosed separately in the notes.

2.9 Retirement Benefits: No provision for retirement benefits has been made as the Company does not have any employees.

2.10 Taxes on Income: Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

2.11 Earnings per Share (EPS): In determining Earnings Per Share, the Company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is a weighted average number of shares outstanding during the period. Number of shares used in computing diluted earnings per share comprises 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.

2.12 Prior Period, Extraordinary Items & Changes in Accounting Policies:

(1) The Prior period items and extraordinary items are shown separately in the financial statements.

(2) There are no changes in the accounting policies effecting the current year financial statements.

2.13 Provisions & Contingencies:

(1) A provision is recognised when the Company has present obligations as a result of a past event, it is probable that an outflow of resources will be required to settle the obligations, in respect of which reliable estimates can be made. Provisions are not discounted to its present value and are determined based on the best estimates required to settle the obligations at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect a current best estimate.

(2) All known liabilities wherever material are provided for. Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty and treated as contingent are disclosed by way of notes to the accounts.

5.1 Non-Convertible Debentures from KSFC referred above is secured by way of hypothecation of Stock of Current Assets, Semi-Finished, Finished Goods and Book Debts, Machinery & Equipment, both present and future and also guaranteed by the Directors personally.

5.2 Loan from Central Bank of India consists of the following long pending liabilities:

- Foreign Bills Purchased 43,34,400

- Packing Credit 16,00,000

(The above loans are secured by way of hypothecation of multimedia titles and movable property, stock-in-trade and foreign bill to the extent of Rs. 45 Lakhs and secured by the Directors personally).

5.3 The Long term borrowing balances are subject to confirmation.

5.4 No provision has been made till date in respect of interest on the loan balance claimed by Central Bank of India as the same has been contested by the Company, which is pending for settlement.

5.5 The Company has made provision for interest in respect of non-convertible debentures issued in favour of Karnataka State Financial Corporation as per the sanction terms. The Corporation has filed a suit against the Company for recovery of the debenture redemption amount along with interest, which the Company has contested.

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Mar 31, 2012

I. Accounting Conventions and Basis of Presentation for Accounting:

The Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies in India and comply with the mandatory accounting standards under Section 211 (3c) of the Companies Act, 1956.

All income and expenditure to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

ii. Cash Flow Statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

iii Fixed Assets:

Fixed assets are stated at cost less depreciation.

iv. Investments:

Investment in wholly-owned subsidiary is shown at cost. Provision is made for any diminution, other than temporary in the accounts.

v. Depreciation on Fixed Assets:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 as amended vide Notification No. GSR 757 (E) dated 16.12.1993 issued by the Department of Company Affairs, Government of India, New Delhi.

vi. Revenue Recognition:

Interest income is accounted on accrual basis.

vii. Preliminary Expenses:

Preliminary expenses are written off over a period of 10 years in equal installments.

viii. Retirement Benefits:

No provision for retirement benefits has been made as the Company does not have any employees.

ix. Taxes on Income:

Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

x. Earnings per Share (EPS):

In determining Earnings Per Share, the Company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is a weighted average number of shares outstanding during the period. Number of shares used in computing diluted earnings per share comprises 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.

xi. Prior Period, Extraordinary Items & Changes in Accounting Policies:

Prior period and extraordinary items are shown separately in the financial statements.

xii. Contingencies and Events Occuring after the Balance Sheet date:

There are no contingencies and events occurring after the balance sheet date affecting the financial position of the Company.

xiii. Provisions, Contingent Liabilities and Contingent Assets:

In preparation of accounts, the Company has made required provisions for all the liabilities, which can be measured by using a substantial degree of estimation. The amount of Contingent Liabilities not provided in the accounts is disclosed in the notes forming part of the accounts. Assets in the nature of contingent assets are not recognized in the accounts.

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Mar 31, 2010

I. Accounting Conventions and Basis of Presentation for Accounting:

The Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006.

All income and expenditure to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

ii. Cash Flow Statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

iii Fixed Assets:

Fixed assets are stated at cost less depreciation.

iv. Investments:

Investment in wholly-owned subsidiary is shown at cost. Provision is made for any diminution, other than temporary in the accounts.

v. Depreciation on Fixed Assets:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 as amended vide Notification No. GSR 757 (E) dated 16.12.1993 issued by the Department of Company Affairs, Government of India, New Delhi.

vi. Revenue Recognition:

Interest income is accounted on accrual basis.

vii. Preliminary Expenses:

Preliminary expenses are written off over a period of 10 years in equal installments.

viii. Retirement Benefits:

No provision for retirement benefits has been made as the Company does not have any employees.

ix. Taxes on Income:

Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

x. Earnings per Share (EPS):

In determining Earnings Per Share, the Company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is a weighted average number of shares outstanding during the period. Number or shares used in computing diluted earnings per share comprises 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.

xi. Prior Period, Extraordinary Items & Changes in Accounting Policies:

Prior period and extraordinary items are shown separately in the financial statements.

xii. Contingencies and Events Occuring after the Balance Sheet date:

There are no contingencies and events occurring after the balance sheet date affecting the financial position of the Company.

xiii. Provisions, Contingent Liabilities and Contingent Assets:

In preparation of accounts, the Company has made required provisions for all the liabilities, which can be measured by using a substantial degree of estimation. The amount of Contingent Liabilities not provided in the accounts is disclosed in the notes forming part of the accounts. Assets in the nature of contingent assets are not recognised in the accounts.