SIGNIFICANT ACCOUNTING POLICIES

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^'1. General Information:

Creative Eye Limited is a public company domiciled in India and incorporated under the provisions of the Companies
Act, 2013. Its shares are listed on BSE and NSE in India. The company is engaged in the ‘Production of Audio-Visual
T. V. Content'.

2. Statement of Compliance and basis of preparation

a) These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies
(Indian Accounting Standards) Rules, 2016.

The financial statements are presented in Indian Rupees (INR) which is also the Company's functional currency.

The financial statements have been prepared on a historical cost convention and accrual basis except for
certain financial assets measured at fair value.

b) Use of estimates and judgment

The preparation of financial statements in conformity with Ind AS requires management to make judgments,
estimates, and assumptions, that affect the application of accounting policies and the reported amounts of
assets, liabilities, income, expenses, etc. at the date of these financial statements and the reported amounts of
revenues and expenses for the years presented. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and future periods are affected.

c) Property, Plant, and Equipment:

Property, plant, and equipment are stated at cost of acquisition or construction less accumulated depreciation
less accumulated impairment, if any. The estimated useful lives, and residual values, are reviewed at the end
of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Borrowing costs directly attributable to the acquisition of property, plant, and equipment which take a substantial
period of time to get ready for its intended use are also included to the extent they relate to the period till such
assets get ready for its intended use.

d) Depreciation and amortization

Depreciation on Property, Plant and Equipment has been provided on the written-down method as per the
useful life prescribed in Schedule II to the Companies Act, 2013.

Further,

- Depreciation in respect of addition to fixed assets is provided on pro-rata basis from the date on which
such assets are capitalized.

- Depreciation on fixed assets sold, discarded or demolished during the year is being provided at their
respective rates up to the date on which such assets are disposed off.

- Fixed Assets costing less than Rs. 5,000/- are fully depreciated in the year of purchase.

e) Impairment of tangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

If the recoverable amount of an asset is estimated to be less than it carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of
profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset in prior years.
A reversal of an impairment loss is recognised immediately in the Statement of profit or loss.

f) Inventories

Stock in trade includes work in progress, completed T.V. content valued at cost and usage value of rights of
Hindi feature films, and residual right of films, as certified by the management. However, the Net Realisable
value cannot be estimated.

g) Financial Instruments

Financial assets and financial liabilities are recognised when the Company entity becomes a party to the
contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs are directly attributable to
the acquisition of financial assets or financial liabilities at fair value through profit or loss and are recognised
immediately in profit or loss.

Financial Assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair
value, depending on the classification of the financial assets. All recognised financial assets are subsequently
measured at either amortised cost or fair value depending on their respective classification.

Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for
debt instruments that are designated as at fair value through profit or loss on initial recognition):

> the asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows; and

> the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.

For the impairment policy on financial assets measured at amortised cost.

Debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income (except for debt instruments that are designated as at fair value through profit or loss
on initial recognition):

> the asset is held within a business model whose objective is achieved both by collecting contractual cash
flows and selling financial assets; and

> the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.

Investments in equity instruments at FVTOCI:

On initial recognition, the Company has made an irrevocable election (on an instrument-by-instrument basis)
to present the subsequent changes in fair value in other comprehensive income pertaining to investments

in equity instruments. These elected investments are measured at fair value with gains and losses arising
from changes in fair value recognised in other comprehensive income and accumulated in the Reserves. The
cumulative gain or loss is not reclassified to the statement of profit and loss on disposal of the investments.

Financial assets at fair value through profit or loss (FVTPL): Investments in equity instruments are classified as
at FVTPL, unless the Company has irrevocably elected on initial recognition to present subsequent changes in
fair value in other comprehensive income for investments in equity instruments.

Derecognition of financial assets:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the
asset to another party. On derecognition of a financial asset in its entirety, the difference between the asset's
carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that
had been recognised in other comprehensive income and accumulated in equity is recognised in the statement
of profit and loss if such gain or loss would have otherwise been recognised in the statement of profit and loss
on disposal of that financial asset.

Financial liabilities and equity instruments:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an
equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company is recognised at the proceeds received, net of
direct issue costs.

Financial Liabilities:

All financial liabilities are measured at amortised cost using the effective interest method or at FVTPL.

h) Revenue Recognition:

Revenue recognition prescribed in five-step model

Step 1: Identify the contract(s) with a customer - Contracts may be written, oral or implied by customary
business practices, but revenue can be recognised only on those contracts that are enforceable and have
commercial substance.

Step 2: Identify the separate performance obligations in the contract - Performance obligations are explicitly or
implicitly promised goods or services in a contract as well as those arising from customary business practices.
An entity needs to identify performance obligations that are distinct.

Step 3: Determine the transaction price - The transaction price is the amount of consideration to which an entity
expects to be entitled. It includes variable consideration, impact of significant financing components, fair value
of non-cash consideration and impact of consideration payable to the customer.

Step 4: Allocate the transaction price to the separate performance obligations- The standard requires allocation
of the total contract price to the various performance obligations based on their relative stand-alone selling
prices, with limited exceptions.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation - Revenue recognition
can occur either over time or at a point in time. Revenue recognition for a performance obligation occurs over
time only if it meets one of the three prescribed criteria.

Interest Income:

Interest income is accounted on an accrual basis.

Dividend Income

Dividend income is recognised when the company's right to receive the payment is established, which is
generally when the shareholders approve the dividend.

i) Trade Receivable:

The company has used a practical expedient by computing the expected credit loss allowance for trade
receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience
and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of
the days, the receivables are due and the rated as given in the provision matrix.

j) Foreign currency

a. Functional Currency

Financial statements of the Company are presented in Indian Rupees (Rs.?), which is also the functional currency.

b. Transactions and Translations

Foreign currency transactions are recorded on initial recognition in the reporting currency, using the
exchange rate at the date of transaction. Exchange differences that arise on settlement of monetary items
are:

i. Adjusted in the cost of fixed assets specifically financed by the borrowings to which the exchange
differences relate.

ii. Recognized as income or expense in the period in which they arise in other cases.

k) Borrowing costs

Interest and other cost in connection with borrowing of funds to the extent related/attributed to the acquisition/
construction of qualifying fixed asset are capitalized up to the date when such assets are ready for its intended
use and other borrowing cost are charged to profit and loss account.

l) Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of
Profit and Loss for the period in which the related service is rendered.

Post-employment and other long-term employee benefits are recognised as an expense in the Statement of
Profit and Loss for the period in which the employee has rendered services. The expense is recognised at
the present value of the amounts payable determined using actuarial valuation techniques. Gains and losses
through remeasurements of the net defined benefit liability/(asset) are recognized in other comprehensive
income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the
discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The
effect of any plan amendments is recognized in the statement of profit and loss.

Company does not have policy for carry forward of unutilised leaves.

m) Taxes on Income

• Tax on income for the current period is determined on the basis of estimated taxable income and tax
credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the
expected outcome of assessments/ appeals.

• Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on
timing differences, being the difference between taxable income & accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.

• Deferred tax assets are recognized & carried forward only to the extent that there is reasonable certainty
supported by convincing evidence that sufficient future taxable income will be available against which
such deferred tax assets can be realized.

• Deferred tax is qualified using the tax rates and laws enacted or substantively enacted as on balance
sheet date.

• MAT payable for the year is changed to the statement of profit and loss as current tax. The company
recognises MAT credit available in the statement of profit and loss only to the extent that there is probable
certainty that the company will pay normal income tax during the specified period i.e. the period for which
MAT credit is allowed to be carried forward. The said asset is shown as ‘MAT Credit Entitlement'. The
company reviews the same at each reporting date and writes down the asset to the extent company does
not have the probable certainty that it will pay normal tax during the specified period.

n) Leases

The Company recognizes a right-of-use asset (ROU) and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases)
and low value leases.

For these short-term and low value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease. Certain lease arrangements include the options to
extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these
options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of
the useful life of the asset or the balance lease term of the underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be
recoverable.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right of use asset if the company changes its assessment if whether
it will exercise an extension or a termination option.

Lease liability and ROU asset are separately presented in the Balance Sheet and lease payments are classified
as financing cash flows.

o) Earnings Per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
Shareholders of the Company by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
Shareholders of the Company and the weighted average number of shares outstanding during the period, are
adjusted for the effects of all dilutive potential equity shares.