7/27/2019 A360413J.docx

1/9

JBIMS

FINANCIAL ACCOUNTING ASSIGNMENT

ANIL GAWADE

MMS I

ROLL NO 74

[Type the abstract of the document here. The abstract is typically a short summary of the

contents of the document. Type the abstract of the document here. The abstract is typically a

short summary of the contents of the document.]

7/27/2019 A360413J.docx

2/9

INTRODUCTION

Prime Focus Group is one of the largest film, advertising and television post-production and

visual effects companies in the world. It is the result of a number of acquisitions and mergers

by Prime Focus Ltd. Prime Focus provides a complete spectrum of innovative creative and

technical services to the Film, Broadcast, Advertising and Media industries. Our end-to-end

offering ranges from pre-production to final delivery, including visual effects, creative 3D

conversion, animation, video and audio post-production, digital content management and

distribution, Digital Intermediate, versioning and adaptation, and equipment rental. Prime

Focus Limited has a highly skilled workforce of 4,200 personnel in India. Worldwide, the

group works across 3 continents at 19 facilities.

Prime Focus offers three specialised business divisions catering to its key markets:

Prime Focus World Prime Focus Group Prime Focus Technologies

Prime Focus has a presence across three continents: India, UK and North America.

Prime Focus Ltd isIndia's largest visual effects and post-production company, offering a full

range of services to the feature film, ad film and broadcast markets. Prime Focus Ltd is listed

on the Mumbai and National Stock Exchanges in India (Symbol PRIF IN). With its

proprietary View-D technology, global scale and presence, short time-to-market, global

delivery capabilities and artist-driven conversions, Prime Focus offers competitive

advantages and execution capabilities that no other company in the industry can match. The

company was born in India, and has grown by acquiring businesses in the major media

centres around the world. Its creative and technical services are rounded-out and bound

together by its unique and pioneering financial model. Mr. Naresh Malhotra is chairman and

whole-time director while Mr. Ramakrishnan Sankaranarayanan is the managing director.

Entertainment Network India Limited (ENIL), a subsidiary of Times Infotainment

Media Limited (TIML), the holding company promoted by Bennett, Coleman & Company

Limited (BCCL)- the flagship company of the Times of India Group, was incorporated in

1999. It is listed on the Bombay Stock Exchange of India Limited and the National Stock

Exchange of India Limited. Enil operates in the radio broadcasting segment and experimental

marketing segment. The company was formed in June 1999 post the first phase of

licensing. The Information Broadcasting Ministry offered 108 frequency across 40 cities and

ENIL got the maximum of them. It started its operations with the launch of its services in

Indore on 4 October 2001. The company simultaneously started operations in seven more

cities. In the second phase the company got 25 more frequencies. That took the count of totalnumber of stations to 32. Enil Operates in the radio broadcasting segment, out-of-home

http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/India

7/27/2019 A360413J.docx

3/9

media segment and experiential marketing segment. The tag line of the brand is "Its Hot !".

Mirchi is a Hindi word for chilly. While all other Radio brands were in English, ENIL came

up with a Hindi brand name. The brand name Mirchi was coined by Mr. Vineet

Jain(Chairman, Times Group). The brand name has been wonderful as it has a very high

recall and connects well with listeners. The tag line "its Hot !" convey that the brand isyoung, exciting and is enticing. ENIL cater to Radio Broadcasting Segment, Out of Home

and Experiential Marketing Segment. The radio broadcasting segment This segment operates

with the brand name of 'Radio Mirchi'. Before Radio Mirchi, the Times of India Group

provided private FM service along with Government of India(GOI) under the brand name of

Times FM.GOI did not renew the contract with private player post that. They operated in

Delhi, Calcutta, Chennai and Goa from 1993-1998.[9]It has been consistently rated as the No.

1 FM radio channel. It has a large pan India presence with 32 stations across 14 states. This

extensive coverage increases loyalty of listens and provides a national media platform for

advertisers. The channel reaches to more than 41 Million listeners(as per IRS Q4, 2010, last

week recall) across stations. Mr. Vineet Jain is the Chairman and non-executive Director

while Mr. Prashant Panday is the Executive Director & CEO.

The Network18 Group is a media and entertainment company with interests in television,

internet, films, e-commerce, magazines, mobile content and allied businesses. Through its

subsidiary TV18 Broadcast Ltd. [BSE: 532800, NSE: TV18BRDCST], the group operates

news channels - CNBC-TV18, CNBC Awaaz, CNBC-TV18 Prime HD, CNN-IBN, IBN7 and

IBN-Lokmat (a Marathi regional news channel in partnership with the Lokmat group). TV18

also operates a joint venture with Viacom, called Viacom18, which houses a portfolio of

popular entertainment channelsColors, Colors HD, MTV, SONIC, Comedy Central, VH1and Nick - and Viacom18 Motion Pictures, the groups filmed entertainment business. TV18

and Viacom18 have also recently launched a strategic joint venture called IndiaCast, a multi-

platform content asset monetization entity mandated to drive domestic and international

channel distribution, placement services and content syndication for the bouquet of channels

from TV18,Viacom18 and other broadcasters. TV18 has also forayed into the Indian factual

entertainment space through A+E Networks | TV18 (Joint venture between A+E Networks

and TV18 Broadcast), which has recently launched a new channelHistoryTV18. TV18 is a

listed company which runs business news channels CNBC-TV18 in English and CNBC

Awaaz in Hindi and owns most of Web 18. In 2006 it acquired CRISIL Market Wire which

was renamed Newswire. TV18 is a subsidiary ofNetwork18 Media & Investments

Limited which is an Indian mass media company with interests in television, print, internet,

film, mobile content and allied businesses. Network 18 FinCap is the holding company for

several media entities in India such as Television Eighteen India Ltd (TV18), IBN 18

Broadcast Ltd, Web 18, Studio 18, Shop 18, Infomedia 18, and Viacom 18. TV18, a joint

venture of Network18 and NBCUniversal. Mr. Hari S Bhatia and Mr.Raghav Bahl are the

director while Mr.Manoj Mohanka is the CEO.

http://en.wikipedia.org/wiki/ENIL#cite_note-9http://en.wikipedia.org/wiki/ENIL#cite_note-9http://en.wikipedia.org/wiki/ENIL#cite_note-9http://en.wikipedia.org/wiki/NBCUniversalhttp://en.wikipedia.org/wiki/NBCUniversalhttp://en.wikipedia.org/wiki/ENIL#cite_note-9

7/27/2019 A360413J.docx

4/9

ACCOUNTING POLICIES

Accounting

Policy

Company #1 Company #2 Company #3

I ndiabulls Power L td. NTPC Ltd. CESC Ltd.

1) Revenue

Recognition

Revenue from PowerConsultancy / AdvisoryServices is recognizedon an accrual basis.Interest income fromdeposits and others isrecognized on an accrualbasis. Dividend incomeis recognized when theright to receive the

dividend isunconditionallyestablished. Profit/losson sale of investmentsis recognized on the date

of the transaction ofsale and is computed

with reference to theoriginal cost of theInvestment sold.

Sale of energy isaccounted for based ontariff rates approved bythe Central ElectricityRegulatory Commission(CERC) as modified bythe orders of AppellateTribunal for Electricity tothe extent applicable. Incase of power stations

where the tariff rates areyet to be approved,provisional rates areadopted. Advance againstdepreciation considered

as deferred revenue inearlier years is included

in sales, to the extentdepreciation recovered intariff during the year islower than thecorresponding

depreciation charged.Exchange differences onaccount of translation of

foreign currencyborrowings recoverable

from or payable to thebeneficiaries insubsequent periods as per

CERC Tariff Regulationsare accounted as Deferred

foreign currencyfluctuations asset/liability. The increaseor decrease indepreciation or interestand finance charges forthe year due to the

accounting of suchexchange differences as

Revenue from sale ofelectricity are net ofdiscount for promptpayment of bills and donot include electricityduty payable to theState Government.They also include, asper established practice,consistently followed

by the Company in thepast, estimated sumsrecoverable from /adjustable onconsumers'' account,

calculated on thebasis of rates approved

/ specified by theappropriate authoritieswhich are reflected inthe subsequent bills. Interms of the applicable

regulations and tariffdetermination process

followed by theCommission, advanceagainst depreciation

forms part of tariff.Such

advance againstdepreciation of a year isadjusted againstearnings from sale ofelectricity for inclusionof the same insubsequent years,

based on dueconsideration by theauthorities in the tariff

determination process.

7/27/2019 A360413J.docx

5/9

per accounting policy no.H is adjusted indepreciation or sales, asthe case may be.

Income from hire ofmeters is accounted foras per the approvedrates. Delayed payment

surcharge, as a generalpractice, is determined

and recognized onreceipt of overduepayment from

consumers.

2) Inventory

Valuation

Inventories are valued atthe lower of, costdetermined on weightedAverage basis and netrealizable value.

Inventories are valued atthe lower of, costdetermined on weightedAverage basis and netrealizable value.

The diminution in the

value of obsolete,unserviceable and surplusStores and spares isascertained on review and

provided for.

Inventories of stores andspare parts and fuel arevalued at lower ofCost and net realizablevalue. Cost is calculated

on weighted average

basis and comprises ofexpenditure incurred inthe normal course ofBusiness in bringing

such inventories to theirlocation and condition.Obsolete, slow movingand defectiveinventories areidentified at theTime of physical

verification of

inventories and wherenecessary, adjustment ismade for such items.

3) Depreciation Depreciation on fixedassets is provided on theStraight-Line Method atthe rates and in themanner prescribed underSchedule XIV of theCompanies Act, 1956.

Depreciation onadditions / deletions tofixed assets is providedon a

pro-rata basis from /upto the date the asset is

put to use/discarded.Individual assetscosting less than Rs.

5,000 are fullydepreciated in

the year of purchase.The acquisition value ofLeasehold Land is

Depreciation on theassets of the generationof electricity business ischarged on straight linemethod following therates and methodologynotified by the CERCTariff Regulations, 2009

in accordance withSection 616 (c) of theCompanies Act, 1956.

Depreciation on theassets of the coal mining,

oil & gasexploration andconsultancy business, is

charged on straight linemethod following the

rates specified inSchedule XIV of theCompanies

In terms of applicableRegulations under theElectricity Act, 2003,depreciation ontangible assets otherthan freehold land isprovided on straight linemethod on a prorate

basis at the ratesspecified therein,the basis of which isconsidered by the West

Bengal ElectricityRegulatory

Commission(Commission) indetermining the tariff

for the year of theCompany. Additional

charge of depreciationfor the year onincrease in value

7/27/2019 A360413J.docx

6/9

amortized over theperiod of the Lease.The right-to-use leasedasset (land) is amortized

on a Straight-Linebasis over the lease

term.Intangible assetsconsisting of Software

are amortized on aStraight

Line basis over a periodof four years from thedate when the assetsare available for use.

Act, 1956.

Depreciation on thefollowing assets is

provided based on theirestimated useful life:

Depreciation onadditions to/deductionsfrom fixed assets during

the year is charged onpro-rata basis from/up to

the month in which theasset is available foruse/disposal.Assets costing up to Rs.5000/- are fully

depreciated in the year of

acquisition.

arising from revaluationis recouped fromRevaluationReserve. Leasehold

land is amortized overthe unexpired period of

the lease.Cost of intangible

assets, comprising

software relatedexpenditure, are

amortized in threeyears and those relatingto brands/trademarks intwenty years, based onuseful life assessed by

an independent value.

COMMON FACTORS IN ACCOUNTING POLICIES

7/27/2019 A360413J.docx

7/9

Accounting Policy Common Factors

Revenue

Recognition

Revenue from Power Consultancy / Advisory Services is recognized on

an accrual basis.

Interest income is recognized on time proportionate basis, taking intoaccount the amount outstanding and the rate applicable.

Inventory

EvaluationInventories are valued at the lower of, cost determined on weighted

Average basis and net realizable value.

Depreciation Depreciation on tangible fixed assets is provided on the Straight-LineMethod The cost of leasehold improvements are amortised over the

primary period of lease of the property.

Assets costing up to Rs. 5000/- are fully depreciated in the year ofacquisition.

DIFFERENCES (PECULIARITIES) IN

ACCOUNTING POLICIES

7/27/2019 A360413J.docx

8/9

Accounting

Policy

Company #1 Company #2 Company #3

I ndiabulls Power L td. NTPC Ltd. CESC Ltd.

1) Revenue

Recognition

Dividend income is

recognized when theright to receive the

dividend isunconditionallyestablished.

Profit/loss on

sale of investments isrecognized on the date

of the transaction of

sale and is computedwith reference to theoriginal cost of theinvestment sold.

Exchange differences

arising fromsettlement/translation of

monetary itemsdenominated in foreigncurrency (other than longterm)to the extent recoverable

from or payable to thebeneficiaries in

subsequent periods as

per CERC TariffRegulations areaccounted asDeferred foreign

currency fluctuationasset/liability duringconstruction period andadjusted from the year inwhich the same

becomes recoverable/payable.

Advance againstdepreciation consideredas deferred revenue inearlier years is includedin sales, to the extentdepreciationrecovered in tariff duringthe year is lower than thecorrespondingdepreciation charged.

The surcharge on latepayment/overdue sundrydebtors for sale ofenergy is recognizedwhen no significantuncertainty as to

measurability orcollectability exists.

Earnings from sale of

electricity are net ofdiscount for prompt

payment of bills and donot include electricityduty payable to theState Government.They also include, as

per established practice,consistently followed

by the Company in the

past, estimated sumsrecoverable from /adjustable onconsumers'' account,

calculated on thebasis of rates approved/ specified by theappropriate authoritieswhich are reflected in

the subsequent bills.

7/27/2019 A360413J.docx

9/9

2) Inventory

Valuation

Inventories of stores andspare parts and fuel arevalued at lower ofcost and net realizable

value

The diminution in thevalue of obsolete,unserviceable and surplusstores and spares is

ascertained on review andprovided for.

Obsolete, slow movingand defectiveinventories areidentified at the

time of physicalverification of

inventories and wherenecessary , adjustmentis made for such items.

3) Depreciation Intangible assetsconsisting of Softwareare amortized on aStraight Line basis overa period of four yearsfrom the date when the

assets

are available for use

Where the cost ofdepreciable assets hasundergone a changeduringthe year due toincrease/decrease in long

term liabilities on account

of exchange fluctuation,price adjustment, changein duties or similarfactors, the unamortized

balance of such asset ischarged offprospectively at the ratesand methodology notifiedby CERC TariffRegulations, 2009/revised useful life

determined based on rates

specified in ScheduleXIV of the CompaniesAct, 1956.

In terms of applicableRegulations under theElectricity Act, 2003,depreciation ontangible assets otherthan freehold land is

provided on

straight line method ona proata basis at therates specified therein,the basis of which is

considered by the WestBengal ElectricityRegulatoryCommission(Commission) indetermining the tarifffor the

year of the Company.