i) The entire book value (carrying amount) of inventories is pledged as security for Cash Credit Facilities taken from banks.

ii) Quarterly statements of current assets are filed by the Company with State Bank of India, Bank of India and NKGSB Cooperative Bank Limited from whom the Company has borrowings on the basis of security of current assets. There are differences in value of current assets between the books of account and the statements submitted to banks. The reconciliation of the differences has been disclosed under Note. 16(a).

OTHER DISCLOSURES

The Company has only one class of shares referred to as equity shares having a par value of ' 10 per share. Each shareholder of equity shares is entitled to one vote per share. In the event of liquidation, the share holders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

i) Quarterly statements of current assets are filed by the Company with State Bank of India, Bank of India and NKGSB Cooperative Bank Limited from whom the Company has borrowings on the basis of security of current assets.

The changes in the estimates are accounted for at the end of the period which has resulted to differences in the value of current assets & current liabilites between the books of account and the statements submitted to banks.

26 Employee Benefits

The Disclosures as defined in the Indian Accounting Standard 19 “Employee benefits”, are given below :

a) Defined Contribution Plans

Contribution to provident and other funds is recognised as an expense in Note 22 “Employee benefit expense” of the Statement of Profit and Loss.

b) Defined Benefit Plan

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave benefits (non funded) is also recognised using the Projected Unit Credit Method.

VIII) The defined benefit plans expose the Company to actuarial risks such as interest rate risk, longevity risk and salary risk:

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of plan participants will increase the plan’s liability.

IX) Sensitivity Analysis

The key actuarial assumptions to which the benefit obligation results are particularly sensitive to discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 100 basis points:

The current service cost recognised as an expense is included in Note 22 ‘Employee benefits expense’ as gratuity. The remeasurement of the net defined benefit liability is included in other comprehensive income.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the Actuary.

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period,while holding all other assumptions constant.

c) Other long term benefits :

The obligation for leave benefits (non funded) is also recognised using the Projected Unit Credit Method and accordingly the long term paid absences have been valued. The leave encashment expense is included in Note 22 ‘Employee benefits expense’.

Other financial liabilities includes current maturities of long term borrowings carried at amortised cost.

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level 1 : Inputs are Quoted prices (unadjusted) in active markets for identical assets or liabilites.

Level 2 : Inputs are other than the quoted prices 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).

Level 3 : Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumption that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The values are carried at book value or cost.

28.2 Foreign exchange exposure

The Company does not use foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to firm commitments and forecasted transactions.

The Company’s foreign currency exposure not hedged by a derivative instrument or otherwise as at the end of reporting period is as follows :

29 Financial Instruments

(i) Financial risk management objective and policies

The Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, other financial instruments.

b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair value of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that future cash flows of floating interest bearing investments will vary because of fluctuations in interest rates. The Company’s exposure to the risk of changes in market interest rates primarily to the Company’s long-term debt obligations.

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

c) Foreign Currency risk

The Company enters into transactions in currency other than its functional currency and is therefore exposed to foreign currency risk. The Company analyses currency risk as to which balances outstanding in currency other than the functional currency of that company. The management has taken a position not to hedge this currency risk. The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are not hedged considering the insignificant impact and period involved on such exposure.

d) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company’s receivables from customers, deposits and loans given, investments and balances at bank.

The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Expected credit loss is based on actual credit loss experienced and past trends based on the historical data.

e) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company’s principal source of liquidity are cash and cash equivalents and the cash flow i.e. generated from operations. The Company consistently generated strong cash flows from operations which together with the available cash and cash equivalents and current investment provided adequate liquidity in short terms as well in the long term.

(ii) Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves. The Company manages its capital structure to ensure that it will be able to continue as a going concern while maximising the return to the stakeholders.

d) The Company does not face a significant liquidity risk with regard to its lease liability as the current assets are sufficient to meet the obligations related to lease liability as and when they fall due.

e) Rental expense charged to the Statement of profit and loss account applying paragraph 6 of Ind AS 116, on account of low-value asset is ' Nil and short-term leases is ' Nil.

31 Details of Corporate social responsibility expenses:

(i) The gross amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is ' 0.76 lakhs (previous year ' 23.05 lakhs).

(ii) Amount approved by the board to be spent towards CSR activities during the year ' 14.55 lakhs (previous year ' 27.91 lakhs).

32 Share Based Payments

Shemaroo Entertainment Limited Employees Stock Option Scheme - 2021

The Company implemented the Employee Stock Option Scheme to grant equity based incentives to eligible employees of Company and its subsidiaries. Shemaroo Entertainment Limited Employees Stock Option Scheme - 2021 (“Scheme”) has been approved by the Board of Directors of the Company at their meeting held on December 7, 2021 and by the shareholders of the Company by way of special resolution passed on January 16, 2022 for grant aggregating 15,00,000 options of the Company. The Scheme covers grant of options to the designated employees of the Company and its Group companies, any Director, whether a whole-time director or not, including a Non-Executive Director, but excluding the Independent Directors, Promoters or members of Promoter Group, and a director holding, directly or indirectly, more than ten percent of the outstanding equity shares of the Company.

The vesting period of the options granted under the Scheme shall commence from the grant date, subject to minimum of 1 (One) year from the grant date and a maximum of 5 (Five) years from the grant date. The settlement of options exercised under the Scheme is by way of alloting equity shares of the Company.

In accordance with the Scheme, during the year the company granted 371,350 options on May 09, 2023 and 78000 options on October 31, 2023.

The weighted average remaining contractual life for the share options outstanding as at March 31, 2024 is 1.39 years (March 31, 2023: 1.26 years)

The range of exercise prices for options outstanding at the end of the year was ' 110 to ' 167 (March 31, 2023: ' 130 to ' 167)

The weighted average fair value of options granted during the year was ' 49 (March 31, 2023: ' 69)

Expected volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The volatility is used in the Black Scholes option pricing model is the annualized standard deviation of the continuously compounded rate of the return of the stock over a period of time. The period considered for expected volatility is based on historical volatility for a period that approximates the expected life of the options being valued.

Total expense arising from equity-settled share based payment transaction for the year is ' 170.89 lakhs (March 31, 2023: ' 189.45 lakhs) has been charged to standalone statement of profit and loss.

33 Additional information to financial statements

33.1 Approval of financial statements

Financial statements were approved for issue by Board of Directors on 24th May, 2024.

33.2 Disclosure under IND-AS - 108

The Company has identified “Entertainment” as the only primary reportable business segment and hence business segment disclosure as per IND AS - 108 is not applicable. The Company has no reportable geographical segment other than India.

Three customers represents more than 10% of the Company’s total revenue during the year (Previous year: Three customers)

(a) Loan given by company to body corporate as at 31st March 2024. (Refer Note 8(d))

(b) Investment made by the Company as at 31st March 2024. (Refer Note 5(a))

(c) No Guarantee has been given by the Company as at 31st March 2024.

* Refer Note 33.6

The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company’s results of operations or financial condition.

Note: Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

33.6 Consequent to the search operation carried out by the CGST and Central Excise department at premises of the Company on September 05, 2023, the Company has paid '1,200 lakhs under protest to the GST Department during the quarter ended September 30, 2023, which is considered as fully recoverable. However, as prudent accounting practice, equivalent amount of provision has been made in the books of accounts. The said cost is considered under “Other Expenses” in the statement of Profit & Loss for the year ended 31st March 2024. Certain statements made by the Company officials during the search operations have been retracted by filing retraction application with Metropolitan Magistrate Court. Department has claimed that the Company had availed and utilised inadmissible input tax credit of ' 7,025.62 lakhs which is being contested by the Company.

The Government of India has reduced the corporate tax rates from 30% to 22% through the Taxation Laws (Amendment) Act, 2019 which is effective from 1st April 2019. As per the same if assessee opts new corporate tax rate, Minimum Alternative Tax provisions (MAT) provisions are not applicable. Shemaroo Entertainment Limited has opted for new corporate tax rate from the financial year 2019-20 and the tax liability above has been calculated accordingly.

33.10 Additional disclosures as to the amendment of Schedule III :

i) During the financial years ended 31 March 2024 and 31 March 2023, the Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person (a) repayable on demand or (b) without specifying any terms or period of repayment.

ii) There is no Benami Property held by the Company and there is no proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

iii) There are no charges or satisfaction in relation to any debt / borrowings yet to be registered with ROC beyond the statutory period.

iv) The Company has not recorded any transaction in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

v) Utilisation of Borrowed funds and share premium:

A) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall -

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;”

B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall -

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

vi) The Company has not traded or invested in crypto currency or virtual currency during the financial year or previous financial year.

vii) There are no subsidiaries in more than one layer.

33.11 Previous year’s figures are regrouped, rearranged, or recast wherever necessary to conform to this year’s classification.