2 Material Accounting Policies
a) Inventories
The inventories consists of the rights over the Song Albums which the Company intends to be sold outright without
retaining any further rights. The inventories have been valued at the lower of Cost and Net Realisable Value as
prescribed under the IND AS 2 - Inventories.
b) Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an
original maturity of three months or less from the date of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
c) Income Tax
a) Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as
reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.
b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such deferred tax assets and liabilities not recognised if the
temporary differences arises from the initial recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable profit not the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
d) Property, Plant and Equipment
Recognition and Measurement
Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment in
value, if any.
Cost for additions comprises the purchase price and any other attributable cost of bringing the asset to its working
condition for its intended use.
Subsequent expenditures are added to its gross book value only if it increases the future benefits from the existing
asset beyond its previously assessed standard of performance and cost of the item can be measured reliably.
The Company identifies and determines cost of each component/part of the Property, plant and equipment
separately, if the component/ part has a cost which is significant to the total cost of the plant and equipment and has
useful life that is materially different from that of the remaining plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Gains or losses arising from derecognition of tangible Property, plant and equipment are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit
and Loss.
Depreciation of these assets commences when the assets are ready for their intended use. Depreciation is recognised
on the cost of assets (other than Capital work-in-progress) less their residual values on written down value method
over their useful lives as indicated in Schedule II of the Companies Act, 2013 and based on technical parameters/
assessments.
The estimated useful life is as follows:
Type of Asset Useful Life (Years)
Computers 3
Office Equipment’s 5
The residual values, useful lives and methods of depreciation of Property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate. The cost of assets not put to use before such date are
disclosed under ‘Capital work-in-progress’.
Acquisition of Rights in Movies are treated as Intangibles Assets under "Development".
Property, plant and equipment which are added / disposed off during the year, depreciation is provided on pro-rata
basis.
e) Employee Benefits
Short Term Employee Benefits
The employee benefits payable only within 12 months of rendering the services are classified as short term
employee benefits. Benefits such as salaries, Leave Travel Allowance, etc., is recognized in the period in which the
employee renders the related services
A liability is recognized for benefits accruing to employees in respect of wages and salaries, in the period the
related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for the related
service.
f) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
a) Financial Assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Investment in Subsidiary
Investment in Subsidiary is carried at Cost less accumulated Impairment losses if any. Where an indication of
impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. On disposal of investment in Subsidiary, the difference between net disposal proceeds and the
carrying amounts are recognised in the Statement of Profit and Loss.
Classifications
The Company classifies its financial assets as subsequently measured at either amortised cost or fair value
depending on the company’s business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets.
Business model assessment
The company makes an assessment of the objective of a business model in which an asset is held at an instrument
level because this best reflects the way the business is managed and information is provided to management
A financial asset is measured at amortized cost net of impairment, if the objective of the Company’s business model
is to hold the financial asset to collect the contractual cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
All other financial assets are measured at fair value through the Statement of Profit and Loss
Derecognition
The company derecognize a financial asset only when contractual rights to the cash flow from the asset expires or it
transfer the financial asset and substantially all the risks and rewards of ownership of the asset.
b) Financial Liability
Financial Liabilities are classified, at initial recognition, as either ‘Financial Liability at fair value through profit or
loss’ or ‘Other Financial Liabilities’.
i) Financial Liabilities are classified as ‘Financial Liability at fair value through profit or loss’, if they are held
for trading or if they are designated as financial liabilities at fair value through profit or loss. These are initially at
fair value with subsequent changes recognized in profit or loss.
ii) Other financial liabilities, are initially measured at fair value, net of directly attributable transaction costs.
Subsequent to initial recognition, these are measured at amortised cost using the effective interest rate method.
g) Fair Value Measurement
The Company measures financial instruments at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
i) in the principal market for the asset or liability, or
ii) in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
At each reporting date, the Company analyses the movements in the values of assets and liabilities which are
required to be re-measured or re-assessed as per the Company’s accounting policies. For the purpose of fair value
disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the fair value hierarchy as explained above.
h) Earnings Per Share
Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of
extraordinary items, if any) by weighted average number of equity shares outstanding during the year.
i) Impairment of Non-Financial Asset
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories
and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists,
then the asset’s recoverable amount is estimated.
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