Net Pix Shorts Digital Media Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1 Company Information

Net Pix Shorts Digital Private Limited (‘The Company'') is a private limited company domiciled in India. The Company is engaged primarily in providing digital online content on various OTT platforms & social media channels and also engaged in content creation involving short films, documentaries, telefilms, etc.

2 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) in India, on an accrual basis and under the historical cost convention, to comply in all material aspects, with the applicable accounting principles in India, mandatory Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

Assets & Liabilities have been classified as current or non current as the per the Companies normal operating cycle and other criteria as set out in Schedule III to the Act

2.1 Summary of significant accounting policies

a) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting year. Differences between actual results and estimates are recognized in the year in which the results are known /materialize.

b) Property Plant & Equipment''s (PPE)

PPE are stated at cost of acquisition/construction less accumulated depreciation. All cost including financing cost attributable to the PPE to bring the assets to their intended use are capitalized.

c) Intangible fixed assets and amortization

Intangible fixed assets are to be stated at acquisition cost less accumulated amortization and impairment loss. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period

d) Depreciation

Depreciable amount for assets is the cost of an assets, or other amount substituted for cost, less its estimated residual value. Depreciation on fixed assets has been provided on the written down value method as per the useful life prescribed in Schedule II of the Companies Act, 2013.

Depreciation on additions/ deletion is provided on pro-rata basis from/ up to the date of such additions/ deletions. The management estimates of the useful life of the fixed assets are as follows:

Sr No	Type of Asset	Useful Life of Asset
1	Shoot related Equipment''s (cameras, projectors, etc)	10 years
2	Props & Production Material	5 Years
3	Computer & Other Equipment''s	3 years

e) Valuation of Inventories

The company adopts the following policy with regards to the Short Films & Songs produced by it.

The cost of Films & Songs comprise of all direct costs incurred in producing the films and indirect costs attributable to such Films. The Films produced is recognized as Closing Stock in the year of Release of Films on various online platforms.

Expenses of under production films incurred till the films are ready for release are shown as Work in Process under Inventories.

The life of each Short Films & Songs is assumed to be 15 years and the cost of Short Films & Songs is amortized based on the expected useful life. The amortization starts from the next financial year of release of Films and Songs on various online platforms.

The company additionally follows the following criteria for amortization of Cost for Films. If no Revenue is earned for 10 years then the Short Film is valued at Re 1/-.

f) Impairment

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of asset or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable is reassessed and the asset is reflected at the recoverable amount.

g) Revenue Recognition

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. The following specific recognition criteria must also be met before revenue is recognized:

Income from Sales

Revenue from Sale of Distribution rights are recognized upon handing over the delivery of the distribution rights / Films to the customer. Revenue from contracts priced on a time material basis are recognized when services are rendered and related costs are incurred. Revenue is reported net of discounts & GST & other applicable taxes. Revenue from Music licensing where the customer obtains a “right to use” is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other Income" in the statement of profit and loss.

h) Treatment of Retirement Benefits

Defined contribution plan and Defined benefit plan in the form of Provident Fund, Pension Fund, Employees State Insurance Fund and Gratuity are not applicable to the Company and hence the same have not been provided.

i) Foreign Currency transactions Initial recognition

Foreign currency transactions are recorded 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.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.Non-monetary items, which are measured in terms of historical cost denominated in foreign currency, are reported using the exchange rate at the date of the transaction.Non-monetary items which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses and charged to the Statement of Profit and Loss in the year in which they arise.

j) Current and deferred tax

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with Income Tax Act,1961. Deferred income tax reflects the impact of current year timing differences between taxable income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realised against future taxable profits. Unrecognised deferred tax assets of earlier years are re- assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised.

k) Earning per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders and share split. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

l) Provisions, contingent liabilities and contingent assets Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect best current estimates.

Contingent Liability

A contingent liability is disclosed where, as a result of past events, there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets

Contingent assets are neither recognized nor disclosed.

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Mar 31, 2024

2.1 Summary of significant accounting policies

a) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made, that affect
the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting
year. Differences between actual results and estimates are recognized in the year in which the results are known /materialize.

b) Property Plant & Equipment''s (PPE)

PPE are stated at cost of acquisition/construction less accumulated depreciation. All cost including financing cost attributable to the PPE to bring the assets to
their intended use are capitalized.

c) Intangible fixed assets and amortization

Intangible fixed assets are to be stated at acquisition cost less accumulated amortization and impairment loss. Amortization takes place on a straight line basis
over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not
exceed 5 years. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting
period

d) Depreciation

Depreciable amount for assets is the cost of an assets, or other amount substituted for cost, less its estimated residual value. Depreciation on fixed assets has
been provided on the written down value method as per the useful life prescribed in Schedule II of the Companies Act, 2013.

Depreciation on additions/ deletion is provided on pro-rata basis from/ up to the date of such additions/ deletions. The management estimates of the useful life
of the fixed assets are as follows:

e) Valuation of Inventories

The company adopts the following policy with regards to the Short Films & Songs produced by it.

The cost of Films & Songs comprise of all direct costs incurred in producing the films and indirect costs attributable to such Films. The Films produced is
recognized as Closing Stock in the year of Release of Films on various online platforms.

Expenses of under production films incurred till the films are ready for release are shown as Work in Process under Inventories.

The life of each Short Films & Songs is assumed to be 15 years and the cost of Short Films & Songs is amortized based on the expected useful life. The
amortization starts from the next financial year of release of Films and Songs on various online platforms.

The company additionally follows the following criteria for amortization of Cost for Films. If no Revenue is earned for 10 years then the Short Film is valued at Re
1/-.

f) Impairment

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company
estimates the recoverable amount of the asset. If such recoverable amount of asset or the recoverable amount of cash generating unit to which the asset
belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is
recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists,
the recoverable is reassessed and the asset is reflected at the recoverable amount.

g) Revenue Recognition

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. The
following specific recognition criteria must also be met before revenue is recognized:

Income from Sales

Revenue from Sale of Distribution rights are recognized upon handing over the delivery of the distribution rights / Films to the customer. Revenue from
contracts priced on a time material basis are recognized when services are rendered and related costs are incurred. Revenue is reported net of discounts & GST
& other applicable taxes. Revenue from Music licensing where the customer obtains a “right to use” is recognized at the time the license is made available to the
customer. Revenue from licenses where the customer obtains a “right to access” is recognized over the access period.

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included
under the head "other Income" in the statement of profit and loss.

h) Treatment of Retirement Benefits

Defined contribution plan and Defined benefit plan in the form of Provident Fund, Pension Fund, Employees State Insurance Fund and Gratuity are
not applicable to the Company and hence the same have not been provided.

i) Foreign Currency transactions
Initial recognition

Foreign currency transactions are recorded 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.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.Non-monetary items, which are measured in terms of
historical cost denominated in foreign currency, are reported using the exchange rate at the date of the transaction.Non-monetary items which are measured at
fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses and charged to the Statement of Profit
and Loss in the year in which they arise.

j) Current and deferred tax

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with
Income Tax Act,1961. Deferred income tax reflects the impact of current year timing differences between taxable income that originate in one period and are
capable of reversal in one or more subsequent periods.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are
recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can
be realised. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred
tax assets can be realised against future taxable profits. Unrecognised deferred tax assets of earlier years are re- assessed and recognised to the extent that it
has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised.

k) Earning per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity
shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue; bonus
element in a rights issue to existing shareholders and share split. For the purpose of calculating diluted earnings per share, the net profit or loss for the year
attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.