(u) Provisions, contingent liabilities & contigent
assets
Provisions are recognised when the Company has
a present obligation as a result of a past events; it is
probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation and a reliable estimate can be made of
the amount of the obligation.
If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a financial cost.
Contingent liabilities are disclosed unless the
possibility of outflow of resources is remote.
Provisions and contingent liabilities are reviewed
at the end of each reporting period and adjusted
to reflect the current best estimate. Contingent
assets are neither recognised nor disclosed in the
financial statements.
(v) Investment property
Investment in buildings that is not intended to
be occupied substantially for use by, or in the
operations of the Company, are classified as
investment property. Investment properties are
measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment
properties are stated at cost less accumulated
depreciation and accumulated impairment loss,
if any. All repairs and maintenance costs incurred
for the investment properties are charged to
statement of profit and loss account when incurred.
Investment properties are depreciated using the
straight-line basis over its estimated useful lives.
Useful life of the same is estimated as 58 years
after considering estimated residual value as 5%.
Though the Company measures investment
property using cost based measurement, the fair
value of investment property is disclosed in the
notes (Refer Note 3(b)). Fair values are determined
based on ready reckoner rate as specified by
State Government. If at the balance sheet date
there is an indication that a previously assessed
impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at
the recoverable amount subject to a maximum of
depreciated historical carrying value.
Investment properties are derecognised either
when they have been disposed of or when they are
permanently withdrawn from use and no future
economic benefit is expected from their disposal.
The difference between the net disposal proceeds
and the carrying amount of the asset is recognised
in profit or loss in the period of derecognition.
(w) 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 March 31, 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. April 1, 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.
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:
Notes:
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'.
(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.
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.
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 NIL (previous year ' 0.76 lakhs).
(ii) Amount approved by the board to be spent towards CSR activities during the year NIL (previous year ' 14.55 lakhs).
(iii) The details of amount recognized as expense in the Statement of Profit or Loss under Note 24 above on CSR related
activities is given below:
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 319,146 options on July 30, 2024 and 1500 options on October 17,
2024.
33.1 Approval of financial statements
Financial statements are approved for issue by Board of Directors on 13th May, 2025.
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)
33.3 Details of Loans given, investment made and Guarantee given covered under section 186(4) of the Companies Act, 2013.
(a) Loan given by company to body corporate as at 31st March 2025. (Refer Note 8(d))
(b) Investment made by the company as at 31st March 2025. (Refer Note 5(a))
(c) No Guarantee has been given by the company as at 31st March 2025.
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 The GST Department had demanded and order recovery of inadmissible Input Tax Credit (ITC) allegedly amounting to ' 7025.62 lakhs,
along with the alleged interest at the applicable rate and penalty equal to aforementioned tax amount under Section 74 (1) of CGST Act,
2017. Penalty allegedly amounting to ' 6334.99 lakhs under Section 122(1)(ii) & (x) & Section 122 (2) (b) of CGST Act, 2017 read with
Section 20 of the IGST Act, 2017 was also imposed. The company has disputed the order and filed appeal against the said order with
the Joint Commissioner and has also filed writ with the Bombay High Court, wherein the hearing is pending. The Company had paid
' 1,200.00 lakhs under protest to GST department in previous year and has made provision against the same in previous year.
Department had also imposed Penalty allegedly amounting to ' 133.61 crores each on Joint Managing Director, Chief Executive
Officer and Chief Financial Officer of the Company under Section 122(1A) of the CGST Act, 2017 and MGST Act, 2017. The above three
individuals has filed writ against the order, with the Bombay High Court and got interim order granting the stay on the proceedings.
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 2025 and 31 March 2024, 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.
vi) 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 presentation.
Signatures to notes “1” to “33” forming part of the standalone financial statements
For and on behalf of the Board of Shemaroo Entertainment Limited
For Mukund M. Chitale & Co. Raman Maroo Hiren Gada
Chartered Accountants Chairman and Managing Director WTD and CEO
Firm Registration No. 106655W DIN 00169152 DIN 01108194
M. M. Chitale Amit Haria Pooja Sutradhar
Partner CFO Company Secretary
Membership No. 14054 Membership No.: A40807
Place: Mumbai Place: Mumbai
Date: 13th May, 2025 Date: 13th May, 2025
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