2 Summary of Significant Accounting Policies
(a) Basis of Preparation & Presentation
The financial statements are prepared on the accrual basis of accounting and in accordance
with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as prescribed
under Section 133 of the Companies Act, 2013 (the Act) (as amended) and other relevant
provisions of the Act.
The Financial statements have been prepared as a going concern under the historical cost
convention.
The Financial statements are presented in Indian Rupees (“I NR”) and all values are
rounded to the nearest thousand, except otherwise stated as per the requirement of
Schedule III.
(b) Classification of Current and Non-Current
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non¬
Current classification.
An asset is treated as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating
cycle,
ii) Held primarily for the purpose of trading,
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle,
ii) It is held primarily for the purpose of trading,
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to determine the settlement of the liability for at least
twelve months after the reporting period.
The Company classifies all other liabilities as non - current.”
(c) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and
short-term deposits with an original maturity of three months or less, which are subject to
an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash
and short-term deposits.”
(d) Taxes on Income
Current Tax
Income tax expense represents the sum of current tax and deferred tax and includes
any adjustments related to past periods in current and /or deferred tax adjustments that
may become necessary due to certain developments or reviews during the relevant year.
Current income tax is based on the taxable income and calculated using the applicable tax
rates.
Deferred Tax
Deferred tax is provided using the Balance sheet method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for the financial
reporting purposes at the reporting date. The carrying amount of deferred tax assets is
reviewed at the end of reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realized or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted at the reporting date. Deferred tax
relating to items recognised outside profit or loss is recognised outside profit or loss in
correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.”
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
(e) Revenue Recognition.
“In Case of Sale of rights, the company recongnizes the income when all the following
criteria are met:
1) A license agreement is signed by both the parties.
2) The Licensee is able to freely exploit the rights granted.
3) Effective date of grant of rights to the licensee has commenced as per the agreement or
complete payment with respect to the rights has been recieved,whichever is earlier.
4) The Enterprise has no remaining performance obligations.
5) The arrangement is fixed and determinable.
6) Collection of fee is reasonably assured.”
Other Stream of income
In all other cases, revenue is recognized when the company has the undisputable right to receive
the income.
(f) Purchase of Movie rights
“The Enterprise recognizes purchase of movie rights when all the below mentioned criteria
are met:
• A license agreement is signed by both the parties.
• The Enterprise is able to freely exploit the rights granted.
• Effective date of grant of rights to the Enterprise has commenced as per the agreement or
complete payment for the same has been made, whichever is earlier.
• The Seller has no remaining performance obligations.
• The arrangement is fixed and determinable.”
|