Accounting Policies of Picturepost Studios Ltd. Company

Mar 31, 2025

1 CORPORATE INFORMATION

Picturepost Studios Limited ("the Company") is a public limited company incorporated under the Companies Act, 2013 and specializes in movie editing, computergenerated imagery (CGI), visual effects (VFX), video conversion, grading, and mastering films and commercials for various channels and digital platforms. The Company was originally formed as a Limited Liability Partnership (LLP) under the name and style of "Prodace Solutions LLP". Thereafter, Picturepost Studios LLP was converted into a Private Limited Company vide a Certificate of Incorporation dated June 01, 2023 under the name and style of Picturepost Studios Private Limited. Further, the Private Limited has converted into Public Limited Company as "Picturepost Studios Limited" on 14^th May, 2024 as per the Companies Act, 2013. The Company is listed on the National Stock Exchange (NSE). The company''s registered office is at 701, 7^th Floor, Sapphire Building, Junction of S.V Rd & 1^st Rd, Khar (W), Khar Colony, Mumbai, Mumbai, Maharashtra, India, 400052.

2 Significant accounting policies

2.1 Basis of preparation and presentation

"These Financial Statements of the company have been prepared in accordance with Indian generally accepted accounting principles (""Indian GAAP"").The Company has prepared these financial statements to comply in all material respects with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Accounting Standards) Rules, 2021 and other relevant provisions of the Act. The Financial Statements are prepared under the historical cost convention on the accrual basis.

2.2 Use of estimates

"In preparation of the financial statements, the Company makes judgments, estimates and assumptions about the carrying amounts of assets and liabilities. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised. "

2.3 Property Plant and Equipment Measurement at recognition:

"An item of property, plant and equipment (PPE) that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of PPE are carried at their cost less accumulated depreciation and accumulated impairment losses, if any. Item of PPE which reflects significant cost and has different useful life from the remaining part of PPE is recognised as a separate component.

The cost of an item of PPE comprises of its purchase price net of discounts, if any including import duties and other non-refundable taxes or levies and directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced."

Depreciation:

i) Property, Plant and Equipment

Depreciation on each part/component of Property, Plant and Equipment is provided on a pro-rata basis using the Written Down Value method, based on the estimated useful life of the respective asset, in accordance with the requirements of Schedule II to the Companies Act, 2013. Items of Property, Plant and Equipment costing less than ''5,000 are charged off to the Statement of Profit and Loss in the year of acquisition.

ii) Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible Assets are amortized on straight line basis over a period of five years being the estimated useful life. Intangible asset are recognised as per Accounting Standard 26 Intangible Asset. An intangible asset is recognised if and only if

(a) i t is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and

(b) the cost of the asset can be measured reliably."

2.4 Impairment of Asset:

At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the Company''s assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. An assessment is also done at each Balance Sheet date whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased. If any such indication exists the asset''s recoverable amount is estimated. The carrying amount of the fixed asset is increased to the revised estimate of its recoverable amount but so that the increased

carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of impairment loss is recognized in the Statement of Profit and Loss for the year. After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge for the fixed asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any), on straight line basis over its remaining useful life.

2.5 System of accounting

The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis unless stated otherwise.

2.6 Revenue Recognition

a) Revenue from operations

Revenue from services is recognized when the services are rendered and it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of revenue can be measured reliably. Revenue is recognized net of applicable taxes and discounts. In cases where services are provided over a period of time, revenue is recognized proportionately over the term of the contract based on the stage of completion, provided that there is no significant uncertainty regarding the amount of consideration and the completion of the service. Unbilled revenue represents revenue recognized in relation to services rendered as at the reporting date but not yet billed in accordance with contractual terms. Such revenue is recognized when there is a reasonable certainty of ultimate collection. Income from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Other income is recognized when there is no uncertainty regarding its collectability and measurement."

b) Other Income

Income from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Other income is recognized when there is no uncertainty regarding its collectability and measurement. Rental income is recognized on accrual basis"

2.7 Employee Benefits

A. Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognised in the period the employee renders the related service. Post-Employment Benefits:

B. Post-employment benefits:

a) Defined contribution plans:

Defined contribution plans are employee state insurance scheme and Government administered pension fund scheme for all applicable employees and superannuation scheme for eligible employees. The Company''s contribution to defined

contribution plans are recognized in the Statement of Profit and Loss in the financial year to which they relate.

b) Defined benefit plans:

i. Provident fund scheme:

The Company makes specified monthly

contributions towards Employee Provident Fund scheme to a separate trust administered by the Company. The minimum interest payable by the trust to the beneficiaries is being notified by the Government every year.

ii. Gratuity scheme

Gratuity is payable to all eligible employees of the company on retirement, death, permanent disablement and resignation in terms of the provisions of the Payment of Gratuity Act 1972, or company''s scheme whichever is more beneficial.

Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the Statement of Profit and Loss.

2.8 Earning Per Share

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.

2.9 Taxation

A. Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

B. Deferred Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing

differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.10 Provisions and Contingent Liabilities

A provision is recognised when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. 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 outflow 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.

2.11 Cash Flow Statement

Cash flows 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 income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2.12 Investments

a) Investment in equity instruments:

Investments are classified into long-term and current investments. Long-term investments are carried at cost. Current investments are valued at the lower of cost and fair value, determined on an individual investment basis.

b) Investment Property:

Investment property comprises land or buildings that are held to earn rental income or for capital appreciation

and not for use in the operations of the Company or for sale in the ordinary course of business. Investment properties are initially recognized at cost, including transaction costs. Subsequent to initial recognition, they are carried at cost less accumulated depreciation and impairment losses, if any.

Income from investments is recognized when the right to receive the income is established.

2.13 Cash & Cash Equivalent

Cash and cash equivalents include cash and cheques in hand, bank balances, demand deposits with banks and other short-term highly liquid investments where the original maturity is three months or less.

2.14 Cash Flow Statement

Cash flows are reported using the Indirect method, where profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals of past or future cash receipts or payments. The cash flow from operating, financing and investing activities of the company are segregated

2.15 Foreign currency transactions Initial recognition:

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement at the balance sheet date:

Foreign currency monetary items (other than derivative contracts) of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-monetary items of the Company are carried at historical cost.

Treatment of exchange differences:

Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

2.16 Borrowing Cost

Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.

2.17 Current / Non-Current Classification and Operating Cycle:

A. The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification in accordance with the Schedule III of the Companies Act, 2013. An asset is classified as current when:

i) It is expected to be realized or intended to be sold or consumed in the normal operating cycle;

ii) It is held primarily for the purpose of trading;

iii) I t is expected to be realized within twelve months after the reporting date; or

iv) It is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date."

B. All other assets are classified as non-current.

C. A liability is classified as current when:

i) It is expected to be settled in the normal operating cycle;

ii) It is held primarily for the purpose of trading;

iii) I t is due to be settled within twelve months after the reporting date; orThe Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date."

D. All other liabilities are classified as non-current.

E. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

F. Operating Cycle: The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. For companies in the service industry, including this Company, the operating cycle is generally short and does not extend beyond twelve months. Accordingly, the Company has considered its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.

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Mar 31, 2024

1. NATURE OF BUSINESS

rn^C|I.^U?^EP(iSI/.^STVu^C)l?^S ^^RIVATE LIMITED was incorporated by converting Picturepost Studios LLP on 1 June 2024 with the object of Video Editing, Post Production and VFX.

SIGNIFICANT ACCOUNTING POLICIES

²¹ BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with the Generally Accepted ccount''ng Principles m india (“Indian GAAP") to comply with the Accounting Standards specified under Section 133 of the Companies Act.2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act,2013. The financial statements have been prepared under the historical cost convention on accrual basis.

2.2 USE OF ESTIMATFR

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management''s evolution of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the ''™^a*^{es 3f}]^d f^ss1^umP^tl1^{ons used in} Preparing the accompanying financial statements. Any known/materialized ^{S t0 SUCh estimates are reco}9ⁿ''zed in the period in which the results are

2-3 FIXED ASSETS AND DEPRECIATION

Tangible assets

Fixed Assets are stated at low cost less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and incidental expenses.

The depreciation on tangible assets is charged on written down value method so as to write off the cost over the useful life of assets as per schedule II of the Companies Act, 2013. For assets acquired or sold during the year, the depreciation is calculated on pro-rata basis from the date of addition or up to the date of sale or discarded.

Intangible assets

^St?^{ed at C0St} °^{f acquisition net} °^f recoverable taxes less accumulated amortization/depletion and impairment loss, if any.

''ⁿ/S^{le ass}ets comprised of Patents and Trademark, are amortized over a period of agreement of right to use which is estimated to be 5 years as per AS-26 issued by ICAI.

2.4 SYSTEM OF ACCOUNTING

The Company follows mercantile system of accounting and recognizes income expenditure on accrual basis unless stated otherwise.

2.5 REVENUE RECOGNITION Income from sales operation

Revenue in respect of sales of goods is recognized as and when the property in the goods sold is discount^ ° ^{the bUyer} °^{r 3 def}''^{ned consideration}- Sales are stated GST and are⁹net of trade

Other incomes

Other income is recognized on accrual basis.

2.6 RETIREMENT BENEFITS

1. Contributions to defined contribution schemes such as Provident Fund are charged to the Statement of Profit and Loss as incurred.

2. The company has a policy of discharging its liability towards leave encashment on yearly basis

^l0n ? ^serv''f® °^feach employee. Accordingly, the provision for leave encashment is Sheet °^{n he baS}''^S ° ^{aCtUa iablhty 10 res}P^{ect of leave} outstanding, if any as on the date of Balance

3. Payment of Gratuity Act is not applicable to the company as the company does not have requisite number of employees as required under the Act for applicability.

2 7 EARNINGS PER SHARE

chfL^6iShare‘^S ^^alculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit for the year attributable to equity

⁶fT?^{hted average number of e}P^ui,V ^shares outstanding during the year (adjusted for effects of dilutive options). ^a 1

^{2 8} PROVISION FOR CURRENT AND DEFERRED TAX

Income Tax Expense comprises current tax and deferred tax charge or credit. Current tax provision tL^m|ncomfTa^dx°Aⁿct^h1961 ^C°^{mpUted after} consiclering tax allowances and exemptions under

nrnhlhS It* !^S r^^C?^{gnized using the} liability method, on all timing difference to the extent that it is probable that a liability or asset will crystallize. As at the balance sheet date, unless there is

evictence to the contrary, deferred tax assets pertaining to business loss are only recognized to the extent that there are deferred tax liabilities offsetting them.

h«n2m^rI T^r7''^e Tf j^MAT> P^{aid in} accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax. Accordingly, MAT is recoqnized

as an asset in the balance sheet when it is probable that future economic benefit associated with it will flow to the company.

^{2 9} PROVISION AND CONTINGENCIES

The Company creates a provision when there is present obligation as a result of a past event that probabiy requires an outflow of resources and a reliable estimate can made of the amount of obhgation. A disclosure of the contingent liabilities is made when there is a possible obligation that

cannot L''rrlade ^{require an outflow of} resources or where a reliable estimate of the obligation

2.10 CASH AND CASH EQUIVALENTS

Cash and Cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

2.11 CASH FLOW STATEMENT

Cash flows are reported using the indirect method, where profit before tax is adjusted for the effects of transactions °f a non-cash nature and any deferrals of past or future cash receipts or payments The cash flow from operating, financing and investing activities of the company are segregated.

2.12 Comparisons

Picturepost Studios LLP was converted into Picturepost Sutdios Private Limited on 1^st Jun 2023 therefore comparison figures for F.Y 2022-23 are not available

2. Estimated amount of contracts remaining to be executed on account of capital: Nil

3. Contingent Liabilities not provided for: NIL

⁴’ reconciliation⁶¹⁵¹⁰^’ ^{Credit0rs and Loans & Advances} are subject to balance confirmation and

5. Accounts are subject to reconciliation with prescribed GST returns under GST Law and consequential effect thereof, if any.

6. Value of Imports Calculated on CIF Basis: NA