B. Significant Accounting Policies
(a) Basis of preparation:
(i) The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the Act) Companies (Indian Accounting Standards) Rules, 2015]
and other relevant provisions of the Act.
All assets and liabilities have been classified as current and non-current as per the Company's normal operating
cycle and other criteria's set out in the Schedule III to the Companies Act, 2013. Based on the nature of
products/services and the time between the acquisition of assets for processing and their realization in cash and
cash equivalents, the Company has ascertained it's operating cycle as twelve months for the purpose of current/
non-current classification of assets and liabilities.
Based on the nature of products/services and the time between the acquisition of assets for processing and their
realization in cash and cash equivalents, the Company has ascertained it's operating cycle as twelve months for
the purpose of current/non-current.
(ii) Historical cost convention
The financial statements of the Company have been prepared on the historical cost basis except for certain
Financial assets and liabilities which are measured at fair value.
(b) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). These financial statements are
presented in Indian rupee (^), which is Company's functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates at the date of the
transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
recognized in Statement of Profit and Loss. Non-monetary items carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non¬
monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
(c) Revenue Recognition
Revenue is recognized, net of sales related taxes, when persuasive evidence of an arrangement exists, the fees are
fixed or determinable, the product is delivered or services have been rendered and collectability is reasonably
assured. The Company considers the terms of each arrangement to determine the appropriate accounting
treatment. The following additional criteria apply in respect of various revenue streams within filmed
entertainment: Theatrical - Contracted minimum guarantees are recognized on the theatrical release date. The
Company's share of box office receipts in excess of the minimum guarantee is recognized at the point they are
notified to the Company. Television - License fees received in advance which do not meet the revenue recognition
criteria are included in deferred income until the above criteria is met. Other - DVD, CD and video distribution
revenue is recognized on the date the product is delivered or if licensed in line with the revenue recognition criteria.
Provision is made for physical returns where applicable. Digital and ancillary media revenues are recognized at the
earlier of when the content is accessed or declared. Visual effects, production and other fees for services rendered
by the Company and overhead recharges are recognized in the period in which they are earned and in certain cases,
the stage of production is used to determine the proportion recognized in the period.
(d) Interest and Dividend Income Recognition
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the
Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset's carrying
amount on initial recognition.
Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is established,
it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of
the dividend can be measured reliably.
(e) Income Taxes
The income tax expense for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the country where the Company generates taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
Deferred Tax assets are recognized for all deductible temporary differences, unused tax losses and carry forward tax
credits only if it is probable that future taxable amounts will be available to utilize those temporary differences, tax
losses and tax credits.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to
items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in
other comprehensive income or directly in equity, respectively.
(f) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial Institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of Cash Flow
Statement, Cash and cash equivalents are considered net of outstanding overdrafts, if any, as they are considered
an integral part of Company cash management.
Inventories
Inventories as disclosed in financial statements comprise are stated at the lower of cost and net realizable value.
Cost is determined on the basis of actual / amortized cost. Net realizable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion and costs necessary to make the sale.
(h) Trade receivables
Trade receivable are recognized initially at fair value and subsequently measured at amortized cost using the
effective interest method, less provision for impairment.
(i) Financial Instruments
(i) Financial Assets
Classification
The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit
or loss), and
• those measured at amortized cost.
The classification depends on the entity's business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in Statement of Profit and Loss or Other
Comprehensive Income.
Measu rement
At initial recognition, the Company measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss
are expensed in Statement of Profit and Loss.
Impairment of Financial Assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at
amortized cost. The impairment methodology applied depends on whether there has been a significant increase in
credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
De-recognition of Financial Assets
A financial asset is de-recognized only when
- The Company has transferred the rights to receive cash flows from the financial asset or
- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation
to pay the cash flows to one or more recipients
Where the Company has transferred an asset, it evaluates whether it has transferred substantially all risks and
rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the Company
has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not
de-recognized.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the
financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to
the extent of continuing involvement in the financial asset.
(ii) Financial Liabilities
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial liabilities are initially measured at the fair value.
Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Financial
liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value
recognized in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
(j) Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the
asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of
the Company or the counterparty.
(k) Property, Plant and Equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated
impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the
asset. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for
as a separate asset is derecognized when replaced. All other repairs and maintenance expenses are charged to
Statement of Profit and Loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight-line method to allocate the cost of the asset, net of their residual
values, if any, over their estimated useful lives which are in accordance with the useful lives prescribed under
Schedule II to the Companies Act, 2013.
The residual values are not more than 5% of the original cost of the asset. The assets' residual values and useful
lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is
written down immediately to its recoverable amount if the asset's carrying amount is higher than its estimated
recoverable amount.
Gains or losses arising from the retirement or disposal of a tangible asset are determined as the difference between
the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the
Statement of Profit and Loss.
(l) Borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortized cost with any difference between the Proceeds (net of transaction costs) and the redemption
value recognised in the Statement of profit and loss within finance costs over the period of the borrowings using the
effective interest method. Finance costs in respect of film productions and other assets which take a substantial
period of time to get ready for use or for exploitation are capitalized as part of the assets. Borrowings are classified
as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12
months after the statement of financial position date.
(m) Impairment of assets
Non-Financial assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets (Cash-generating units). Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) 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 recognized for the
asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the
Statement of profit or loss.
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