Corporate Information
Colorchips New Media Limited (the ‘Company’) was incorporated in India, under the Companies
Act, 1956. The Company is a global player within the Indian media and entertainment industry
and is primarily engaged in the business of film production, exploitation and distribution. It
operates on a vertically integrated studio model controlling content as well as distribution and
exploitation across multiple formats globally, including cinema, digital, home entertainment and
television syndication. Its shares are listed on leading stock exchanges in India (BSE Scrip Code:
540023).
These separate financial statements were authorised for issue in accordance with a resolution
passed in the Board of Directors meeting held on 29th May 2025.
Statement of Compliance
These financial statements have been prepared in accordance with the Indian Accounting
Standards (referred to as Ind AS”) as prescribed under section 133 of the Companies Act, 2013
read with Companies (Indian Accounting Standards) Rules as amended from time to time.
Basis of preparation
The financial statements have been prepared on accrual basis of accounting using historical cost
basis, except certain investments.
All assets and liabilities have been classified as current or noncurrent as per the Company’s
normal operating cycle and other criteria set out in the Schedule III to the Act. The Company
considers 12 months to be its normal operating cycle.
All values are rounded to the nearest rupees in lakhs, except where otherwise indicated. Amount
in zero represent amount below one lakh rupees.
1. Material accounting policies
a. 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:
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.
Other income
Dividend income is recognised when the Company’s right to receive the payment is established,
which is generally when shareholders approve the dividend.
Interest income is recognized on a time proportion basis taking into account the amount
outstanding and the effective interest rate applicable.
b. Property, plant and equipment and depreciation
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Cost comprises of purchase price inclusive of taxes etc. up to the date
the asset is ready for its intended use. Depreciation is provided under written down value method
at the rates and in the manner prescribed under Schedule II to the Companies Act, 2013. 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. Gains or losses
arising from de-recognition of a 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 de-recognized.
c. Intangible assets
Intangible assets acquired by the Company are stated at cost less accumulated amortisation less
impairment loss, if any.
Other intangible assets, which comprise internally generated and acquired software used within
the Entity’s digital, home entertainment and internal accounting activities, are stated at cost less
amortisation less provision for impairment. The amortisation charge is recognized in the
Statement of profit and loss.
d. Impairment of non-financial assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash generating units). As a result, some assets are tested
individually for impairment and some are tested at the cash generating unit level. All individual
assets or cash generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is
any indication of impairment based on external or internal factors. An impairment loss is
recognised wherever the carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and their '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 assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value indicators.
Film and content rights are stated at the lower of unamortized cost and estimated recoverable
amounts. In accordance with Ind AS 36 Impairment of Assets, film content costs are assessed for
indication of impairment on a library basis as the nature of the Company’s business, the contracts
it has in place and the markets it operates in do not yet make an ongoing individual film evaluation
feasible with reasonable certainty. Impairment losses on content advances are recognized when
film production does not seem viable and refund of the advance is not probable.
All assets are subsequently reassessed for indications that an impairment loss previously
recognized may no longer exist.
e. 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.
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.
f. Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on risk exposure arising from financial assets
like debt instruments measured at amortised cost e.g., trade receivables and deposits.
The Company follows 'simplified approach’ for recognition of impairment loss allowance on Trade
receivables or contract revenue receivables. The application of simplified approach does not
require the Company to track changes in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss.
However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period,
credit quality of the instrument improves such that there is no longer a significant increase in
credit risk since initial recognition, then the entity reverts to recognising impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which
results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required
to consider all contractual terms of the financial instrument (including prepayment, extension,
call and similar options) over the expected life of the financial instrument. However, in rare cases
when the expected life of the financial instrument cannot be estimated reliably, then the entity is
required to use the remaining contractual term of the financial instrument.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as
income/ expense in the Statement of profit and loss. This amount is reflected under the head
'other expenses’ in the Statement of profit and loss.
For assessing increase in credit risk and impairment loss, the Company combines financial
instruments on the basis of shared credit risk characteristics with the objective of facilitating an
analysis that is designed to enable significant increases in credit risk to be identified on a timely
basis.
g. Inventories
Inventories primarily comprise of books, film rights and are valued at the lower of cost and net
realizable value. Cost in respect of goods for resale is defined as purchase price, including
appropriate labour costs and other overhead costs. Cost in respect of raw materials is purchase
price.
Purchase price is assigned using a weighted average basis. Net realizable value is defined as
anticipated selling price or anticipated revenue less cost to completion.
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