(u) Provisions and contingencies
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation that arises from past events where it is either not probable that
an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of the amount cannot
be made.
(v) Dividend Distribution
Dividends paid are recognised in the period in which the interim dividends are approved by the Board of Directors, or in
respect of the final dividend when approved by shareholders.
(w) Earnings per share
(i) Basic earnings per Share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year excluding treasury
shares
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account:
- the weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.
(x) Rounding of amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest Lakhs (with
two places of decimal) as per the requirement of Schedule III, unless otherwise stated.
(y) Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2025, MCA has notified
Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions,
applicable to the Company w.e.f. 1st April, 2024. The Company has reviewed the new pronouncements and based on its
evaluation has determined that it does not have any significant impact in its financial statements
2 CRITICAL ESTIMATES AND JUDGEMENTS
The preparation of standalone financial statements in conformity with Ind AS requires management to make judgments,
estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities,
income, expenses and disclosures of contingent assets and liabilities at the date of these standalone financial statements and the
reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed at each Balance Sheet date. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and future periods affected.
This Note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.
Detailed information about each of these estimates and judgements is included in relevant notes together with information
about the basis of calculation for each affected line item in the standalone financial statements.
The areas involving critical estimates or judgements are:
Employee benefits (estimation of defined benefit obligations) - Notes 1(r) and 29
Post-employment benefits represent obligations that will be settled in future and require assumptions to estimate benefit
obligations. Post-employment benefit accounting is intended to reflect the recognition of benefit costs over the employees'
approximate service period, based on the terms of the plans and the investment and funding decisions made. The accounting
requires the Company to make assumptions regarding variables such as discount rate and salary growth rate. Changes in these
key assumptions can have a significant impact on the defined benefit obligations.
Impairment of trade receivables - Notes 1 (j)(iii) and 32
For impairment of trade receivable, Company applies the simplified approach permitted by Ind AS 109,'Financial Instruments',
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Estimation of expected useful lives of property, plant and equipment - Notes 1(c) and 3
Management reviews its estimate of useful lives of property, plant and equipment at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility
of property, plant and equipment.
Contingencies - Notes 1(u) and 37
Legal proceedings covering a range of matters are pending against the Company. Due to the uncertainty inherent in such
matters, it is often difficult to predict the final outcome. The cases and claims against the Company often raise factual and legal
issues that are subject to uncertainties and complexities, including the facts and circumstances of each particular case/claim,
the jurisdiction and the differences in applicable law. The Company consults with legal counsel and other experts on matters
related to specific litigations where considered necessary. The Company accrues a liability when it is determined that an adverse
outcome is probable and the amount of the loss can be reasonably estimated. In the event an adverse outcome is possible or an
estimate is not determinable, the matter is disclosed.
Valuation of deferred tax assets - Notes 1(t) and 16
Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for
financial reporting purposes and their respective tax bases that are considered temporary in nature. Valuation of deferred tax
assets is dependent on management's assessment of future recoverability of the deferred tax benefit. Expected recoverability
may result from expected taxable income in the future, planned transactions or planned optimising measures. Economic
conditions may change and lead to a different conclusion regarding recoverability.
Fair value measurements - Notes 1(j)(viii) and 31
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on
quoted prices in active markets, their fair values are measured using valuation techniques, including the discounted cash flow
model, which involve various judgements and assumptions.
Impairment of Intangible assets
I mpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices
less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The
recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well as the expected future
cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to the goodwill and
brand.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to
meet the obligations related to lease liabilities as and when they fall due.
The Company has incurred expenses relating to short term leases and leases of low value assets for certain accommodation.
Terms of such lease include option for renewal on mutually agreed terms. There are no restrictions imposed by lease arrangements
and there are no purchase options or sub leases or contingent rents. Operating lease rentals for the year recognised in Statement
of Profit and Loss amounts to ' 416.02 Lakhs (2023-24 - ' 1,162.83 Lakhs).
The total cash outflow for leases is ' 430.35 Lakhs (2023-24 - ' 1,224.78 Lakhs) for the year, including cash outflow for short
term leases and leases of low value assets.
Company as a Lessor
Rent income includes payments of ' 26.94 Lakhs (2023-24 - ' 23.21 Lakhs) for the year relating to agreements entered into by
the Company. There are no restrictions imposed by lease arrangements and there are no contingent rents recognised as income
for the period. These lease arrangements inter alia include escalation clause/option for renewal.
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received
after the reporting date
Estimation of fair value
The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair value
is current prices in an active market for similar properties. Where such information is not available, the Company consider
information from a variety of sources including current prices in an active market for properties of different nature or recent
prices of similar properties in less active markets, adjusted to reflect those differences.
The fair values of investment property have been determined by external, independent property valuers, having appropriate
recognised professional qualifications and recent experience in the location and category of the property being valued.
29 ASSETS AND LIABILITIES RELATING TO EMPLOYEE BENEFITS
(I) Post-employment defined benefit plans:
(A) Gratuity (funded)
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the plan, the Saregama
India Limited Employees Group Gratuity Fund (Gratuity Fund), administered and managed by the Trustees and funded primarily
with Life Insurance Corporation of India (LICI) and ICICI Prudential Life Insurance Company Limited, make payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's
salary and the tenure of employment. The Trustees are responsible for the overall governance of the plan and to act in
accordance with the provisions of the trust deed and rules in the best interests of the plan participants. Each year an Asset-
Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms
of risk and return profiles. Investment and contribution policies are integrated within this study. Liabilities with regard to the
Gratuity Plan are determined by actuarial valuation as set out in Note 1(r)(iii) in material accounting policies, based upon which,
the Company makes contributions to the Employees' Gratuity Funds.
The following table sets forth the particulars in respect of the Gratuity Plan (funded) of the Company:
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice,
this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation
calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the
defined benefit obligation recognised in the Balance Sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(k) The Company expects to contribute ' 119 Lakhs (previous year - ' 121 Lakhs) to the funded gratuity plans during the next
financial year.
(l) The weighted average duration of the defined benefit obligation as at 31st March, 2025 is 7 years (31st March, 2024 - 8
years).
(II) Post-employment defined contribution plans
(A) Superannuation fund
Certain categories of employees of the Company participate in superannuation, a defined contribution plan administered
by the Trust set up by the Company. The Company makes yearly contributions based on a specified percentage of each
covered employee's salary. The Company has no further obligations under the plan beyond its annual contributions.
During the year, an amount of ' Nil (previous year- ' NIL) has been recognised as expenditure towards above defined
contribution plan of the Company.
(B) Provident fund
All categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both
the employee and employer make monthly contributions to a government administered fund at specified percentage
of the covered employee's qualifying salary. The Company has no further obligations under the plan beyond its monthly
contributions.
During the year, an amount of ' 249.75 Lakhs (previous year- ' 237.08 Lakhs) has been recognised as expenditure towards
above defined contribution plan of the Company.
(III) Leave obligations
The Company provides for accumulation of leave by certain categories of its employees. These employees can carry
forward a portion of the unutilised leave balances and utilise it in future periods or receive cash (only in case of earned
leave) in lieu thereof as per the Company's policy. The Company records a provision for leave obligations in the period in
which the employee renders the services that increases this entitlement.
(IV) Risk exposure
Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are detailed below:
Discount rate risk
The Company is exposed to the risk of fall in discount rate. A fall in discount rate will eventually increase the ultimate cost
of providing the above benefit thereby increasing the value of the liability.
Salary growth risks
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.
An increase in the salary of the plan participants will increase the plan liability.
Demographic risk
I n the valuation of the liability, certain demographic (mortality and attrition rates) assumptions are made. The Company
is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby
causing an increase in the benefit cost.
30 SHARE BASED PAYMENTS
(a) Employee stock option scheme
The establishment of the Employee Stock Option Scheme 2013 (Scheme) was approved by the shareholders at the Annual
General Meeting held on 26th July, 2013. The Scheme is designed to provide incentives to eligible employees to deliver long term
returns. Under the Scheme each Option entitles the holder thereof to apply for and be allotted one equity shares of the Company
of Re. 1 each upon payment of the exercise price during the exercise period as defined in the Scheme.
The exercise period commences from the date of vesting of the Options and expires at the end of 10 years from the date of
vesting. The Options have been granted at the 'market price' as defined under the Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014, as amended.
31 FAIR VALUE MEASUREMENTS
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the
financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level
follows below.
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If
significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally
accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that
reflects the credit risk of counterparty.
The fair value of trade receivables, cash and cash equivalents, other bank balances, loans and deposits, trade payables,
borrowings, lease liabilities and other financial assets and liabilities is considered to be equal to the carrying amounts of these
items due to their short-term nature. There were no transfers between Level 1 and Level 2 during the year ended 31st March,
2025 and 31st March, 2024.
32 FINANCIAL RISK MANAGEMENT
The Company has a system-based approach to risk management, anchored to policies and procedures aimed at ensuring early
identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise
as a consequence of its business operations as well as its investing and financing activities.
Accordingly, the Company's risk management framework has the objective of ensuring that such risks are managed within
acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation.
It also seeks to drive accountability in this regard.
This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of Directors
reviews and agrees policies for managing each of these risks, which are summarised below:
(A) Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to
credit risk from its operating activities (primarily Trade Receivables) and from its investing activities (primarily Deposits with Banks).
Trade receivables
Trade receivables are typically unsecured and are derived from revenue earned from customers. Customer credit risk is managed
by respective segment subject to the Company's policy and procedures which involve credit approvals, establishing credit limits
and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course
of business. The Company's customer base is large and diverse limiting the risk arising out of credit concentration. Further,
credit is extended in business interest in accordance with business-specific credit policies. The Company's exposure to trade
receivables on the reporting date, net of expected loss provisions, stood at ' 12,557.30 Lakhs as on 31st March, 2025 (31st March,
2024 - ' 14,356.32 Lakhs).
Other financial assets
Credit risk from balances with banks, term deposits and investments is managed by Company's finance department. Investments
in fixed deposits are held with highly rated banks. Investments of surplus are made within assigned credit limits with approved
counterparties who meet the threshold requirements with respect to ratings, financial strength, credit spreads etc. Counterparty
credit limits are set to minimize concentration risk and are reviewed periodically by the Board of Directors.
The Company's maximum exposure to credit risk for the components of the Balance Sheet as of 31st March, 2025 and 31st March,
2024 is the carrying amounts as disclosed in Note 8.1, 8.2, 11.1, 11.3, 11.4, 11.5 and 11.6.
(B) Liquidity risk
Liquidity risk refers to the risk that the Company fails to honour its financial obligations in accordance with terms of contract.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.
Management monitors rolling forecasts of the company's liquidity position (including the undrawn credit facilities extended by
banks and financial institutions) and cash and cash equivalents on the basis of expected cash flows. In addition, the Company's
liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these,
monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing
plans.
The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company's
non-derivative financial liabilities on an undiscounted basis, which therefore does not differ significantly from their carrying
value as the impact of discounting is not significant.
The Company does not have derivative financial liabilities as at the end of above mentioned reporting periods.
The Company is having cash credit facility and the same carries interest of 9.05% to 9.60% p.a. (2023-24: 8.65% to 9.75% p.a.).
The facility is unutilised as on 31st March, 2025 and 31st March, 2024. Cash Credit facility was secured by first pari passu charge
(ranking pari passu with all consortium bankers) over the whole of the current assets of the Company including its inventories,
bills receivable and book debts and all other movables, both present and future whether now lying loose or in cases wherever
they may be situated and also by the second charge on the Company's movable fixed assets, both present and future ranking
pari passu without any preference or priority of one over the others.
(C) Market risk
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. The Company transacts business in local currency and in foreign currencies (primarily US
Dollars and GBP). The Company has foreign currency trade receivables, trade payables and advances and is therefore exposed
to foreign currency risk. The risk is measured through a forecast of highly probable foreign currency cash flows.
The Company's risk management policy is hedging of net foreign currency exposure at all points in time through foreign
exchange forward contracts. The objective of the hedging is to eliminate the currency risk due to volatility in exchange rates.
(a) Foreign currency risk exposure:
The Company's exposure to foreign currency risk at the end of the reporting period expressed in '(in Lakhs), are as follows:
(b) Sensitivity
The sensitivity of profit or loss due to changes in the foreign exchange rates arises mainly from foreign currency denominated
financial instruments. 10 % appreciation/depreciation of the respective foreign currencies with respect to functional currency
(holding all other variables constant) of the Company would result in increase/decrease in the Company's profit before tax as
computed below:
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company's exposure to risk of changes in market interest rates relates primarily to the Company's
debt interest obligation. Further the Company engages in financing activities at market linked rates, any changes in the interest
rate environment may impact future rates of borrowings.
I ncrease/ decrease of 50 basis points (holding all other variables constant) in interest rates at the balance sheet date would
result in increase/decrease of ' Nil (31st March, 2024 - ' Nil) in interest expense on financial liabilities with floating interest rate
and corresponding impact on profit before tax for the year ended 31st March, 2025.
The Company invests its surplus funds in fixed deposits and mutual funds. Fixed deposits are held with highly rated banks and
have a short tenure and are not subject to interest rate volatility, considered as fixed rate.
(iii) Securities price risk
The Company invests in mutual fund schemes of leading fund houses. Such investments are susceptible to market price risk
that will fluctuate due to changes in market traded prices, which may impact the return and value of such investments. The
value of investments in such mutual fund schemes as at 31st March, 2025 is ' 7,855.17 Lakhs (31st March, 2024 - ' 10,994.52
Lakhs). Accordingly, fair value fluctuations arising from market volatility is recognised in Statement of profit and loss.
33 CAPITAL MANAGEMENT
(a) Risk management
The Company's objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of net debt to equity ratio and maturity profile
of overall debt portfolio of the Company.
Net debt implies total borrowings of the Company as reduced by Cash and Cash Equivalent and Equity comprises all components
attributable to the owners of the Company.
The following table summarises the capital of the Company:
36 CONTINGENT LIABILITIES IN RESPECT OF -
(i) Income Tax Matter
The Company has ongoing disputes with income tax authorities in India. The disputes relate to tax treatment of certain expenses
claimed as deductions, computation or eligibility of allowances. The Company has contingent liability of ' 2,845.08 Lakhs as
at 31st March, 2025 (31st March, 2024 - ' 2,965.96 Lakhs) in respect of tax demands which are being contested by the Company
based on the management evaluation and advice of tax consultants.
(ii) Indirect Tax Matter
The Company has ongoing disputes with Indian tax authorities mainly relating to treatment of characterisation and classification
of certain items. The Company have demands amounting to ' 10,025.28 Lakhs as at 31st March, 2025 (31st March, 2024 -
' 10,016.45 Lakhs ) relating to Goods and Service Tax, Excise duty, Custom duty, Service tax, Sales tax/VAT and Other indirect
taxes from respective indirect tax authorities which are being contested by the Company based on the management evaluation
and advice of tax consultants.
(iii) Copyright Matter
The Company has received legal notices of claims/lawsuits filed against it relating to infringement of copyrights in relation to
the music used/other matters. Based on management evaluation and advice from legal solicitors, ' NIL as at 31st March, 2025
(31st March, 2024 - ' 20.00 Lakhs) is considered as contingent on account of such claims/law suits.
In respect of above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of
the respective proceedings. The Company does not expect any reimbursements in respect of the above.
(1) Debt represents only lease liabilities
(2) Profit for the year Depreciation and amortisation expense Finance costs
(3) Lease payments during the year
(4) Current assets - Current liabilities
(5) Profit for the year Tax Expense Finance costs
(6) Net worth deferred tax liabilities Lease liabilities
Explanation for change in the ratios by more than 25% as comapred to the preceeding year:
1. The decrease is on account of incraese in income received in advance and trade payables; which is in line with increase in
operations of the Company during the current year.
2. On account of repayment of debt.
3. I ncrease in inventory turnover ratio on account of increase in Music content inventory, which is in line with increase is
operations of the Company during the current year.
4. Revenue growth coupled with better collection of receivables has resulted in an improvement in the ratio.
43 In terms of Indian Accounting Standard (Ind AS) 108 on 'Operating Segment' notified in the Act, segment information has
been presented in the Consolidated Financial Statements, prepared pursuant to Indian Accounting Standard (Ind AS) 110
on 'Consolidated Financial Statements' and Indian Accounting Standard (Ind AS) 28 on 'Investments in Associates and Joint
Ventures' notified in the Act, included in the Annual Report for the year.
As per our report of even date attached
For B S R & Co. LLP For and on behalf of the Board of Directors of
Chartered Accountants Saregama India Limited
Firm's Registration No.: 101248W/W-100022 CIN : L22213WB1946PLC014346
Seema Mohnot Noshir Naval Framjee Vikram Mehra
Partner Noshir Naval Framjee Managing Director
Membership Number: 060715 DIN: 01646640 DIN: 03556680
Place : Kolkata Place : Kolkata
Pankaj Mahesh Chaturvedi Priyanka Motwani
Chief Financial Officer Company Secretary
ACS: 58041
Place : Kolkata Place : Kolkata Place : Kolkata
Date : 15th May, 2025 Date : 15th May, 2025 Date : 15th May, 2025
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