2 Significant Accounting Policies
2.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in accordance with the Indian
Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules,
2015, read with Companies (Indian Accounting Standards) Amendment Rules, 2016, as
amended and notified under Section 133 of the Companies Act, 2013 (the Act) and other
relevant provisions of the Act.
The accounting policies adopted in the preparation of the financial statements are consistent
with those followed in the previous year.
Current Vs Non-Current Clarification
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:
? Expected to be realized or intended to sold or consumed in normal operating cycle Held
primarily for the purpose of trading
? Expected to be realized within twelve months after the reporting period, or
? Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least twelvemonths after the reporting period.
All other assets are classified as non-current.
? A liability is current when:
? It is expected to be settled in normal operating cycle It is held primarily for the purpose of
trading
? It is due to be settled within twelve months after the reporting period, or
? There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period. The Company classifies all other liabilities as non-current.
? Deferred tax assets and liabilities are classified as non-current assets and liabilities.
? The operating cycle is the time between the acquisition of assets for processing and their
realization in cash and cash equivalents. The Company has identified twelve months as its
operating cycle.
The preparation of the financial statements in conformity with Ind AS requires the
Management to make estimates, judgments and assumptions. These estimates, judgments
and assumptions affect the application of accounting policies and the reported amounts of
assets and liabilities, the disclosures of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the period. The
application of accounting policies that require critical accounting estimates involving complex
and subjective judgments and the use of assumptions in these financial statements have been
disclosed.
Accounting estimates could change from period to period. Actual results could differ from
those estimates. Appropriate changes in estimates are made as the Management becomes
aware of changes in circumstances surrounding the estimates. Changes in estimates are
reflected in the financial statements in the period in which changes are made and, if material,
their effects are disclosed in the notes to the financial statements.
23 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price (including all duties and taxes
after deducting trade discounts and rebates if any) and any attributable cost of bringing the
asset to its working condition for its intended use. Such cost includes the cost of replacing part
of the plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. Likewise, when a major expenditure is incurred, its cost is
recognized in the carrying amount of the plant and equipment, if it increases the future
benefits from the existing asset. All other expenses on existing fixed assets, including day-to¬
day repair and maintenance expenditure, are charged to the statement of profit and loss for
the period during which such expenses are incurred.
For depreciation, the Company identifies and determines cost of assets significant to the total
cost of the assets having useful life that is materially different from that of the life of the
principal asset.
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Cains or losses arising from de-recognition of Property, plant and equipment are
measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognized in the statement of profit and loss when the asset is derecognized.
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.
For depreciation, the Company identifies and determines cost of assets significant to the total
cost of the assets having useful life that is materially different from that of the life of the
principal asset.
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Cains or losses arising from de-recognition of Property, plant and equipment are
measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognized in the statement of profit and loss when the asset is derecognized.
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.
Based on a technical assessment and a review of past history of asset usage, management of
the Company has not revised its useful lives to those referred to under Schedule II to the
Companies Act, 2013 (as amended).
Depreciation is provided on the straight-line method (SLM) using useful life prescribed in Part
C of Schedule II of the Companies Act, 2013.The useful life of the following class of assets
specified in the Part “C” of Schedule II of the Companies Act, 2013 are as follows:
2.5 Intangible assets and amortization
Cost of acquisition of intangible assets & any other direct costs incurred in relation to such
acquisition are recognized as Intangible assets. Following initial recognition, Intangible assets
are carried at cost less accumulated amortization and accumulated impairment losses, if any.
Intangible assets with finite lives are amortized over the available useful life of film rights
acquired while purchase and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting
period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortization period or
method, as appropriate, and are treated as changes in accounting estimates. The amortization
expense on intangible assets with finite lives is recognized in the statement of profit and loss,
unless such expenditure forms part of carrying value of asset.
2.6 Impairment of Assets
The carrying amounts of the Company’s property, plant and equipment and intangible assets
are reviewed at each reporting date to determine whether there is any indication of
impairment. If there are indicators of impairment, an assessment is made to determine
whether the asset’s carrying value exceeds its recoverable amount. Where it is not possible to
estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to which the asset belongs.
Impairment is recognized in statement of profit and loss whenever the carrying amount of an
asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is
the higher of net selling price, defined as the fair value less costs to sell, and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market rates and risks specific to the asset.
An impairment loss for an individual asset or cash generating unit are reversed if there has
been a change in estimates used to determine the recoverable amount since the last
impairment loss was recognized and is only reversed to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss had been recognized. Impairment losses
were recognized in the statement of profit and loss.
Usually, the company is having inventory in serial content procured from the other parties. The
value of inventory includes cost of content bought from the content provider & cost of dubbing
charges for conversion of content into local regional language. Company has calculated the
value of inventory based on the available period of usage of serial content as per the
agreement entered by the service provider.
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