I Company Overview
Basilic Fly Studio Private limited (the "Company") is 3 Private limited company dom,tiled In India and was Incorporated on 28th January 201b vrde Reparation No.U92100TN2016PTC103861 under the provisions of the Companies Act. 2013. The registered office of the Company is situated at Tower A, KRC Commerzone, Mount Poonamallee Road Porur Chennai Tamil Nadu 600116 India with operating units across the Country Subsequently, company was converted into Public limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 29.12.2022 and the name of the company was changed to Basilic Fly Studio Limited ('the Company' or the “issuer") pursuant to issuance of Fresh Certificate of Incorporation dated 19.05.2023 Registrar of Companies. Chennai with Corporate Identification Number U92100TN2016PLC103861
The Company is engaged in the business of post production activities of providing high-end visual effects and 2D to 30 conversion to the Media and Entertainment industry.
II Significant Accounting Policies
1 Basis of preparation:
The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.
2 Revenue recognition:
The company derives its revenues primarily from Sale of Visual effects (VFX) Service contracts.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.
Revenue from services provided under fixed price contracts, where the outcome can be estimated reliably, is recognized following the proportionate completion method, where revenue is recognized in proportion to the progress of the contract activity. The progress of the contract activity is usually determined as a proportion of efforts incurred up to the balance sheet date, which bears to the total hours / days estimated for the contract.
Revenue on time-and-material contracts are recognized as the related services are performed and the revenues from the end of the last billing to the balance sheet date are recognized as unbilled revenues.
Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable Dividend Income: Dividend Income is recognised when the owners right to receive payment is established.
Other Income : Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.
3 Property Plant and Equipment including Intangible assets:
Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property Plant and Equipments purchased in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase.
Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.
4 Depreciation & Amortisation:
The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Writen Down Value (WDV> method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal
Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal
Useful life of Property, Plant and Equipments
Category Useful life
Computer & Accessories 3-6 years
Furniture & Fittings 10 years
Office Equipments 5 years
Plant & Machinery 15 years
Printers & Scanners 13 years
Vehicles 8 years
5 Impairment of assets:
The Management periodically assesses using, external and internal sou-ces, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is h'gher of the asset’s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal Reversal of impairment loss is recognised immediately as income in the profit and loss account.
6 Use of estimates:
The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions Wfcuhe reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amount of income and expenses during the year Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful hues of Property Plant and Equipments and intangible assets.
7 Foreign currency transactions:
Domestic Operation:
I. Initial recognition :
A foreign currency transactions are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
II. Measurement:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined
III. Treatment of Foreign exchange :
Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss
8 Employee Benefits:
A. Short - term employee benefits:
Leave encashment:
The leave encashment liability upon retirement would not arise as the accumulated leave is reimbursed every year and accounted at actual.
B. Post-Employment benefits:
Defined benefit plan:
Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the eno of each financial year
Defined contribution Plan:
Provident Fund: Eligible employees receive benefit from provident fund covered under thn Provident Fund Act Both the employee and the company make monthly contributions. The employer contribution is charged off to Profit & Loss Account as an expense.
9 Taxes on Income:
Income Tax expense is accounted for in accordance with AS-22 'Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below.
A. Current Tax:
Provision for current tax Is marie in accordance with the provisions of the income Tax Act, 1961.
B. Deferred Tax:
Deferred tax t: recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.
Deterred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised
10 Provisions and Contingent Liabilities:
A provision is recognised if. as a result of past event, the Company h3s a present legal obligation that can be estimated reliably and It is probable that an outflow of economic benefit will be required to settle the obligation Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a con'ingent liability is also made when there is a possible obligation or a present obligation that mav, but probably w'll not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision o’ disclosure is made
11 Earnings Per Share:
Basic Earnings per share is computed by dividing the net protit after lax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividfrg the net prof':: after tax by the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all d’lutive potential eouity shares. The diluted potential equity shares are adjusted for tue proceeds receivable had the shares been actually issued at fair value which is the average market value cf the outstanding shires Dilutive potential equity shares a»e deemed converted as at the beginning of the period, unless issued ai a later date. Dilutive potential equity shares are determined independently for each period presented.
12 Operating Lease
Lease where the Lessor effectively ieta*ns substantially all the risks a no benefits of ownership of the leased term, are classified as operating lease. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight line basis. ___ _ _
13 Cash and Cash Equivalents:
Cash and cash equivalents comprise cash and cash deposits with banks. The Company cons,decs all highly liquid investments with a original maturity at a date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents
14 Cash Flow Statement:
Cash Hows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of .ncome or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
15 Investments:
investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investment;. All other investments are classified as long-term investments.
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