PART II - MAGAZINES

In respect of audit of circulation figures of magazines, most of the audit guidelines pertaining to Daily & Weekly Newspapers as mentioned in detail in Part I of the Guide would be applicable. However, specific differences pertaining to magazine publisher members are only listed below:

Concept of Net Paid Sales to continue for magazines.

Definition of Net Paid Sales:

NET PAID SALES: That portion of a publication’s circulation which meets the following requirements.

1. Has been sold by the publisher, and has been paid for by, genuine readers at not less than the normal declared newsstand and/or subscription price and / or combo price.
   
   
   and/or
   
   
2. Has been sold to the distributing trade by a Publisher or by his agent/agents within trade terms which may be specified by the Bureau from time to time and which may reasonably be supposed to have been sold by the distributing trade to and paid for by genuine readers at not less than the publisher's normal declared news-stand, subscription or combo price. (Unless Auditors/Bureau having any evidence to the contrary).
   
   Net Paid Sales shall not include:
   1. Sale of Back copies:
      
   2. Copies remaining as unsold/short receipt out of copies indented as notified by the distributing trade and accepted by publisher.
      
   3. All copies reported as unsold in cases where additional copies supplied without agents’ indents even though such claims are not accepted by the Publisher.
      
   4. Copies equivalent to outstanding dues beyond the credit period as prescribed by the Bureau provided such copies have not already been deducted on account of unsold etc.
      
   5. Free and complimentary copies
      
   6. Copies sold to the trade above the maximum trade terms
      
   7. Subscription copies not meeting the subscription criteria
      
   
   Net Paid Sales shall include add back of copies deducted on account of outstandings during the immediate previous period the amount of which is realised in the following period.

Atleast 50% of the total circulation of a magazine should qualify for certification as Net Paid Sales.

Commission and allowances etc. mutually agreed to between a publisher and the distributing trade and paid continuously and consistently. Copies sold upto maximum trade term of 65% of the cover price would be included as Net Paid Sales subject to compliance with all other audit guidelines.

Other provisions of earlier paras 6.1, 6.2 and 6.3 (Newspapers) would also apply to magazines.

All provisions under subscription sales, para 3.1 relating to Newspaper subscription offers (single and joint) would also apply to magazines.

Gift / incentive / discounts offered to subscribers in aggregate not to exceed 90% of the cover price of a magazine.

Distribution / delivery charges on subscription copies:

1. If copies are delivered through trade, then maximum delivery charges payable to the trade caped at 65% of the cover price.
   
   
2. Delivery charges paid to the trade not to be included in the overall 90% limit on the cover price
   
   
3. Actual delivery charges incurred through courier / postage not to be included in the overall limit of 90% of the cover price
   
   
4. Recognising the various means available to a magazine publisher due to technological innovations, request received for subscriptions either through SMS, internet, email, telephone or through any other electronic media will be accepted for the purpose of audit.
   

All provisions under para 5.1, 5.2, 5.3, 5.4 and 5.5 (Newspapers) would also apply to magazines.

1. Gift on newsstand sales / subscription copies:
   
   Adhoc gifts which are offered alongwith a magazine on newsstand mostly as inserts valued upto 50% of the cover price of a magazine will now also be permissible on subscriber copy. Value of such adhoc gifts to subscribers will not be included in the 90% limit on cover price.

Copies of magazines which are either sold directly by the publisher and/or his distributing trade to organisations not connected with newspaper distribution trade provided bonafides of the organisation(s) involved in Institutional Sales are established to the satisfaction of the auditors (Unless Auditors/Bureau having any evidence to the contrary).

Maximum limit for institutional sales would be 25% of the total net paid sales.

Copies could be sold directly to the institutions at cover price less discount upto maximum 65% of the cover price and delivered directly by the publisher to the institutions in bulk other than thru the trade.

If magazines are supplied to institutions in bulk through the trade then maximum trade commission paid to the distribution trade should not exceed 65% of the cover price.

A new category of institutional subscription sales introduced wherein institutions can subscribe in bulk for magazines. Such institutional subscription scheme will qualify for certification if the publisher retains atleast 10% of the cover price of the magazine after offering discounts / gifts / incurring service provider's charges, if any.

Institutions availing the institutional subscription scheme will be required to maintain a list of the recipients of the magazine including full particulars of the recipient namely, name, address, telephone number etc. These details to be made available to the publisher so that the same can be verified by the auditors.

The upper limit for overall institutional subscription sales is 10% of the total Net Paid Sales

Also, details of individual addressees in case of bulk supplies to institutions where individual readers cannot be identified e.g. hotels, airlines, libraries etc. may not be necessary.

Cash collected from all sources is required to be banked intact by a publisher on the next working day.

Magazine Publisher Members who do not generate any cash receipts for sale of copies through any means may be exempt from the above provision subject to a condition that such Publisher should also not have any cash payments / cash reimbursements to agents.

Third party printing presses where magazines are printed are required to maintain and produce for Bureau Auditors verification, production records pertaining to a Member Publisher. If no printing activity is in progress at the time of Bureau Auditor’s visit to a third party printing press then at least an “intent to publish” the magazine for the respective issue should be made available to the Bureau Auditor e.g. printing plates, part pages printed, print order, cover page, required newsprint, or any other verifiable evidence which the Bureau Auditors could rely on which shows the “intent of the publisher” to print the relevant issue of the magazine and the number of copies to be printed.

Whilst calculating the qualifying copies of the ABC certificate of circulation outstanding payment for copies supplied to agents at the end of the audit period as under have to be excluded.

1. Local agents - outstanding for more than one month's supply
2. Outstation agents – copies outstanding for more than two months supply
3. Railway book stalls – copies outstanding for more than four months supply

Onaccount payments received from agents / sub-agents without mentioning the name of the publication may be appropriated on pro-rata basis amongst ABC as well as non-ABC publications in cases where both ABC as well as non-ABC publications are billed together.