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:
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 acumulated 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 substancially 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 Liabilil
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 atfair value through profitor loss. These are initially at fair valuewith subsequentchanges recognized in
profit or loss.
ii) Other financial liabilities, are initially measured atfair value, net of directly attributable transaction costs. Subsequentto 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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